The Global Subsidies Initiative (GSI) is the next stage of the Van Lennep Program, named after Emile van Lennep, the distinguished Dutch economist and Minister, and former Secretary-General of the Organization for Economic Cooperation and Development. A collaborative effort of International Institute for Sustainable Development and the Earth Council, the Van Lennep Program focused on four sectors in its initial phase: energy, road transport, water and agriculture. Following a detailed review of subsidies applied in these sectors, its report, Subsidizing Unsustainable Development: Undermining the Earth with Public Funds, offered a dramatic demonstration of how subsidies serve as disincentives to sustainable development.
In December 2005 the GSI was launched to put a spotlight on subsidies - transfers of public money to private interests - and how they undermine efforts to put the world economy on a path toward sustainable development. Subsidies are powerful instruments. They can play a legitimate role in securing public goods that would otherwise remain beyond reach. But they can also be easily subverted. The interests of lobbyists and the electoral ambitions of office-holders can hijack public policy. Therefore, the GSI starts from the premise that full transparency and public accountability for the stated aims of public expenditure must be the cornerstones of any subsidy program.
But the case for scrutiny goes further. Even when subsidies are legitimate instruments of public policy, their efficacy - their fitness for purpose - must still be demonstrated. All too often, the unintended and unforeseen consequences of poorly designed subsidies overwhelm the benefits claimed for these programs. Meanwhile, the citizens who foot the bills remain in the dark.
When subsidies are the principal cause of the perpetuation of a fundamentally unfair trading system, and lie at the root of serious environmental degradation, the questions have to be asked: Is this how taxpayers want their money spent? And should they, through their taxes, support such counterproductive outcomes?
Eliminating harmful subsidies would free up scarce funds to support more worthy causes. The GSI's challenge to those who advocate creating or maintaining particular subsidies is that they should be able to demonstrate that the subsidies are environmentally, socially and economically sustainable - and that they do not undermine the development chances of some of the poorest producers in the world.
To encourage this, the GSI, in cooperation with a growing international network of research and media partners, seeks to lay bare just what good or harm public subsidies are doing; to encourage public debate and awareness of the options that are available; and to help provide policy-makers with the tools they need to secure sustainable outcomes for our societies and our planet.
Funding
The GSI receives core funding from four governments: the Government of Denmark, the Government of The Netherlands, the Government of New Zealand, and the Government of Sweden. The William and Flora Hewlett Foundation also provides funding that supports the GSI’s research and communications activities.
