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Info Service on Finance and Development (May15/01) Dear friends and colleagues, The second drafting session of the lead-up to the Third International Conference on Financing for Development was held on 13 – 17 April at the UN headquarters in New York. The conference will take place 13 – 16 July 2015 in Addis Ababa, Ethiopia. We are pleased to share with you a report by Bhumika Muchhala on the recently drafting session With
best wishes, [Financing] for Development: Will it further the right to development or will it be a vehicle for the privatization of development financing? By Bhumika Muchhala (New York, 30 April 2015)
A. Overview of FfD issues B. The great clash in priorities for FfD C. International
public finance D. Domestic
public finance (formerly known as mobilizing domestic resources) A. Overview of FfD issues The second drafting session in the lead-up to the Third International Conference on Financing for Development (Ffd), to take place in July 2015 in Addis Ababa, Ethiopia, was held from 13-17 April at the United Nations headquarters in New York. The intergovernmental discussions displayed the deep fractures on the critical FfD themes among UN Member States. From functional issues such as defining the role and purpose of the FfD conference in its own right and as it contributes to the post-2015 development agenda and the mechanism through with the FfD should be followed-up, reviewed and implemented, to conceptual issues such as domestic and international public finance and private finance as well as systemic, debt, trade and governance issues, the divides are increasingly pronounced. (This third FfD conference follows a trajectory that began in the late 1990s in recognition of the need for global attention and action to address and overcome systemic inequalities and the achievement of development.) The FfD Co-Facilitators (from Norway and Guyana) have set the dates for "additional sessions for consultations" on 11-15 May and 26-29 May, with provision also for 1-5 June. Prior to the session on 11-15 May, the Co-Facilitators will circulate a revised Draft Outcome Document as the basis for Member State discussions. The revised draft will be based on views and comments from the second drafting session in April, the joint session with the post-2015 process on means of implementation and the written inputs that have been received. The meaningful function of the third FfD outcome document is to serve as a normative agreement among governments that addresses the financing of sustainable development goals and targets in the context of the Sustainable Development Goals (SDGs) as well as to build the momentum for reform and change in systemic areas such as debt, trade, global economic governance as well as the areas of international private and public finance. This very ability of the FfD to produce a text that embodies a political agreement among governments is in jeopardy on the levels of both the means of implementation (the means by which the SDGs is to be achieved) as well as systemic reforms. The central, although not sole, reason for this is the unwillingness of the developed countries, such as the European Union (EU), the United States (US), Canada, Japan, Australia and New Zealand, to agree to the rather small handful of substantive measures in the FfD zero draft that was published on 16 March. This includes, for example, a decision to upgrade the UN tax committee into an intergovernmental body, ensuring that ODA commitments will be scaled up and that new and additional international public financial resources will be made available for sustainable development financing, developing the ongoing discussions in the UN regarding a multilateral and legal debt restructuring mechanism and agreeing to regular allocations of Special Drawing Rights (SDRs) by the International Monetary Fund (IMF). These are just some of the key elements in the current zero draft. Also critical is the recognition, and integration, of the Rio Principle of common but differentiated responsibilities (CBDR) which stipulates that the universality of the post-2015 development agenda and its concomitant means of implementation (MOI) be defined by the imperative of developed countries’ responsibilities to provide both financial resources and technology transfer and development to developing countries. This understanding is being rejected by developed countries, and in particular the European Union, who has clearly stated that “resource mobilization” are needed from all due to the “evolving national capabilities and changes in the global economy.” This quickly growing argument has been duly countered by developing countries, some of whom have gathered figures and data to show how the inequality gap between developed and developing countries not only remains but has even been growing in some cases. Establishing an independent follow-up process, and governing body, for the FfD is also vital, but developed countries are asking instead that the follow-up of both the post-2015 development agenda and the FfD be combined into the High-Level Political Forum (HLPF). This is problematic in light of FfD being an independent process from the post-2015 development agenda in its substantive inclusion of systemic issues in the international financial and trade architectures. The HLPF is also currently structured in an inadequate manner that lacks a substantive and regular modality and is not equipped with financial and staff resources within the UN. Both the FfD and post-2015 development agenda need to be built on the foundation of the global partnership for development, which is a recognition of the principal partnership between governments of developed and developing countries, with the developed countries taking the lead in providing resources and the means of implementation. The global partnership for development encapsulates the framework for international development cooperation that recognizes the critical importance of North-South cooperation and the global drivers and determinants that shape national policy space for development. This foundation of a meaningful global partnership for development is being destabilized by the overwhelming emphasis in the zero draft on private finance, public-private partnerships (PPPs) and multi-stakeholder partnerships with the private sector. Indeed, the interventions of developed countries focused so heavily on the role of the private sector to provide the necessary financing that many Member States and civil society organizations have characterized the FfD process as one that is outsourcing financing to the private sector. The zero draft in particular endorses private financing mechanisms such as blended finance, pooled financing platforms and the ‘catalytic’ use of ODA vis-à-vis financial leveraging. This is problematic on several counts. The socialization of risks and costs and privatization of resources and wealth is demonstrated by the track record of most private sector partnerships. Ample evidence demonstrates the lack of development impact through blended finance and the absence of accountability, transparency as well as the risk of dangerous speculation through pooled financing platforms. More fundamentally, partnerships in the UN would embrace a voluntary (rather than legally binding) and seld defined responsibility-based (rather than commitment-based) “partnership” approach with the private sector. The larger implication is that developed countries seek to avert, or ‘cop out,’ of their government responsibilities for financing the SDGs and for financing development overall. The budget crunch resulting from the recent global financial crisis is invoked, as is the public debt problems many developed countries face. However, even if the private sector is to be considered for part of the financial resources, in the absence of criteria, ex-ante assessment, monitoring mechanisms and transparency to ensure private sector accountability and genuine development impact, there is a grave risk that the private sector will undermine rather than contribute to sustainable development. This concern has been growing amidst proliferation of corporate influence and agenda setting in the UN over the last many years. In fact, this trend has come to a point where some developed country governments are openly advocating for the rights of the business sector and creating an enabling domestic environment to facilitate the ease of doing business, particularly in the area of investments, that trumps national public policy space. Developed countries, particularly the EU, want even more favorable language towards the private sector in the zero draft. Meanwhile, many developing countries, as well as progressive civil society organizations stress the urgent need for governments to be able to regulate large corporations to both achieve the SDGs and to fulfill the human, economic and social rights of people. This disjuncture is most conspicuous in the sharp asymmetry between the set of enforceable legal instruments that governments have been establishing over the past several decades to protect and promote the interests of transnational corporations, especially through Free Trade Agreements, Bilateral Investment Treaties and Investor to State Dispute Settlement Mechanisms, and the lack of binding instruments to hold corporations accountable for their violations and transgressions against people and the planet. The private sector cannot be upheld as the singular engine of growth and innovation, and private finance is not the primary fuel for development. The history of development, where developed country economies were able to grow and diversify as a direct result of strategic choices and tools provided by the state, clearly shows otherwise. B. The great clash in priorities for FfD The Group of 77 group of developing countries, comprising 134 countries, emphasized that the integrity of the FfD as a separate process from the post-2015 development agenda and the SDGs must be maintained in order for it to continue to be an over-arching process to address financing issues, especially for developing countries. The G77 called for the chapeau of the FfD zero draft to focus on the economic pillar, the economic system and systemic issues. The issue of policy space for national governments must also be respected in synergy with an enabling global environment that makes it possible for developing countries to meet SDG goals and targets. The G77 proposed that the vision encapsulated in the Chapeau of the Monterrey Consensus should be upheld by the current FfD zero draft. The Monterrey Consensus stated, “Our goal is to eradicate poverty, achieve sustained economic growth and promote sustainable development as we advance to a fully inclusive and equitable global economic system.” This language, conspicuously absent from the current text, needs to be reaffirmed and included up front. The G77 asserted that the current chapters of the FfD zero draft of 16 March lacks precise, actionable goals, meaning that it is unclear how developing countries would benefit from the current zero draft. It would therefore be critical to raise the level of ambition in terms of the goals member states want to set for their ability to attain financing for development. The African Group stressed the integration of the CBDR principle and the need to highlight poverty eradication throughout the document. Africa’s efforts to build a regional development agenda through regional integration for inclusive growth and development in Africa, as well as the critical role of national development strategies, industrialization and diversification of Africa’s economies also needs to be highlighted in the zero draft, the African Group said. The Least Developed Countries (LDC) group said that the zero draft does not adequately address LDC needs and situation. The framework for financing sustainable development and mobilizing the means to implement the post-2015 development agenda needs to be strengthened. The LDC group suggested five additional proposals. First, the need to address increased inequalities. Second, the global partnership for development between developed and developing countries, which needs global support and appropriate mechanisms. Third, necessary emphasis on productive capacity building as a development multiplier in LDCs, for which multiple and reliable energy sources are needed. Fourth, LDCs are deeply concerned about the recent decline of ODA which requires a strong commitment by OECD ministers. The LDC group stated that they could not emphasize enough the urgency for a complete commitment by development partners. And fifth, that LDCs require additional preferential, differential, access to markets, and differential and preferential treatment in trade. The group of Latin American and Caribbean countries, CELAC, stated that achieving the internationally agreed SDGs require a strengthened and invigorated partnership for development. This in turn requires a commitment to maintain the policy actions in the Monterrey Consensus, including systemic issues such as sustainable debt and debt restructuring. Adequate financing for development strategies need to involve elements such as the improvement of market regulation, combating illicit financial flows and tax evasion; ensuring corporate responsibilities as well as the right of the state to regulate, and strengthening international development cooperation. In order to address growing inequalities and poverty, further investments are needed with the scope of a new financial strategy. The measurement of multidimensional poverty also needs to be included. Small Island Development States (SIDS) stated that the FfD zero draft has much improvement to do to highlight the special challenges faced by SIDS, including small domestic markets and resulting difficulties in mobilizing domestic resources, vulnerabilities to climate change and lack of productive capacity. SIDS stated that prioritizing the commitment of ODA and maintaining climate finance as new and additional ODA is imperative, and as such climate finance under the UNFCCC must not be double-counted as ODA. India said that the universality of the post-2015 development agenda and the need for developed countries to also commit to action is a missing link in the current zero draft. Poverty eradication and sustainable development are not different silos but rather interconnected and a realizing the need to pursue development as a holistic integration should be reflected in the text. The zero draft fails to name the principle of CBDR in paragraph 8 and seems to invent new ones that are not acceptable and barely understandable. Sustainable patterns of consumption in developed countries, and the urgent need to address this is missing in the current zero draft. The follow-up of the FfD process also needs to be substantially strengthened. China said that the principles of the Monterrey Consensus and Doha Declaration for Development need to be upheld by the zero draft, including CBDR and the three pillars of sustainable development (economic, social and environmental). A far more equal and balanced global partnership for development is the core to maintaining North-South development cooperation. South-South cooperation is complementary and supplementary, but not a substitute. National strategies for development priorities should be prioritized, and FfD should focus on highlighting systemic issues, such as increasing the representation and voice of developing countries in international financial institutions (IFIs), strengthening multilateral trade and building regional development and cooperation. Nicaragua said that the eradication of poverty with an integration of gender equality and the rise in inequalities needs to be reflected in the zero draft text. The Addis Ababa conference must not regress from the Monterrey Consensus and the Doha Declaration for Development and should in fact go beyond. A universal agenda should clearly integrate CBDR, and the third FfD conference should be a separate process of FfD in its own right, with a document that carries its own legitimacy coming out of the July summit, while at the same time contributing to sustainable development financing in the post-2015 development agenda. Ghana reminded other Member States and the Co-Facilitators that the Millennium Development Goals (MDGs) did not have their own financing framework, which led to serious gaps and unmet goals. There is now an opportunity to develop a concrete financing framework that can make the SDGs a reality for all countries. The European Union proposed adding a new chapter on domestic enabling environment, as well as strengthening the policy text under each section on this issue. Domestic enabling environment, according to the EU, can highlight the full range of non-financial MOIs and ensure that they are framed as both the means for the mobilization of resources and as an end in themselves. The EU continued to emphasize the domestic enabling environment and non-financial MOI in its interventions, including proposing to accept the chapter on international systemic issues provided that this additional chapter is introduced, suggesting language for enabling private sector investments in the private finance chapter and in the trade chapter proposing language that makes the link between a conducive domestic enabling environment as the single biggest factor in realising the potential of trade. The EU stated that this new chapter would include language on good governance and effective and inclusive institutions, sound policy and regulatory environments, including effective legislative and regulatory frameworks, policy levers such as sustainable public procurement, gradual elimination of environmentally harmful subsidies and promoting solutions that are climate-smart and contribute to poverty eradication. This proposed chapter on domestic enabling environment would also include the importance of decent work, including implementation of labour standards, adequate social protection floors and investment in human capital. [Such a chapter not only corresponds to the World Bank’s Doing Business Indicators on deregulation, tax incentives for the private sector and labor market flexibility, which counters the necessary regulations and domestic resource mobilization required for sustainable development, but it also imposes policy conditions on developing countries (which the FfD agenda, unlike the international financial institutions, has the responsibility to avoid) and goes against the very ethos of an enabling international environment for development as a prerequisite for domestic efforts to mediate necessary policy changes. Language on sustainable policy procurement may sound benign; however, it runs the risk of discriminating against domestic firms, especially small and medium enterprises (SMEs) that do not have the capability or the technology to be as sustainable as firms in developed countries. The gradual elimination of environmentally harmful subsidies, while being appropriate for the environmental pillar of sustainable development, poses challenges to low-income populations in developing countries that rely on subsidies. Such language should always include concomitant language on protecting the poor and disadvantaged communities through compensations and financial assistance, particularly through means of implementation. The EU continued to ignore the imperative of the CBDR principle, proposing instead that the principle of shared responsibilities be highlighted. Not only is “shared responsibilities” not an actual principle, but if all actors are to take action and contribute their share to reaching global goals in line with respective capabilities, this will result in far lower contributions by developing countries, who have far less financial resources and technological capabilities than developed countries. The EU’s language threatens the explicit and urgent asymmetry between developed and developing countries that must be addressed by CBDR.] The United States offered sparse comments, saying only that climate change should be a crosscutting issue in the FfD zero draft and that sustainable development must be climate resilient. The US stressed development cooperation and development effectiveness, and emphasized that the FfD zero draft should not prejudice or influence other negotiations forums such as the World Trade Organization (WTO). The absence of substantive comments by the US at the outset of discussions signals the countries lack of interest and lack of priority to the FfD process. As in the SDG negotiations, the US consistently raises qualms with the role of the UN in addressing policy issues in financial, trade and systemic governance, saying that these issues belong in the Bretton Woods Institutions, the WTO and so on. C. International public finance ‘The world has changed’ narrative The EU expounded its ‘the world has changed’ narrative, saying that the zero draft’s section on international public finance fails to properly reflect the fact that the world has changed since Monterrey. Much of the zero draft text is still premised on an outdated North-South construct, which does not reflect the complexity of today’s world. Germany supported the EU’s position, adding that the G77 statement does not reflect the fact that emerging economies are now capable of taking on some of the financing burdens and mobilizing funds. Germany clarified that the SDGs cannot just be funded by developed countries. In response to the use of this narrative of ‘the world has changed’ to pressure middle-income countries, particularly China, Brazil and India, to provide financial resources alongside developed countries, India provided a response supported with powerful statistics. India pointed out that the 30 richest countries of the world account for only 17% of the global population, but over 60% of global GDP, more than 50% of global electricity consumption and nearly 40% of global CO2 emissions. The UN report on “Inequality Matters - World Social Situation 2013,” said that in 2010, high-income countries generated 55% of global income, while low-income countries created just above 1% of global income even though they contained 72% of the global population. India clarified that the rapid growth in developing countries should be a cause for celebration not trepidation. However, despite the relatively faster rates of growth in developing countries, international inequality has not fallen. The above UN report on inequality shows that that excluding one large developing country (e.g. China), the Gini coefficient of international inequality was higher in 2010 than as compared to 1980. India concluded that these figures attest to the fact of the North-South gap, saying that member states will be doing themselves a disservice if reality is misrepresented. The long-existing UN discourse on “South-South cooperation” has been distorted to become one of the several mechanisms through which developed countries downplay their commitments and shift some of them on to developing countries. The zero draft welcomes the “increased contributions of Southern partners to sustainable development and looks forward to a further strengthening of South- South cooperation and triangular cooperation, including through multilateral efforts in new institutions.” South-South and triangular cooperation, while increasingly important in the reform of the architecture of international relations, should never substitute or downplay the importance of historical responsibilities and agreed commitments of North-South development cooperation. This position is held by developing countries as a whole, and is wholly supported by civil society. China emphasizes that South-South cooperation is complementary and supplementary. India said that there is a clear lack of focus on inadequate North-South aid and inversely too much focus on South-South cooperation. Uruguay highlighted that the rationale of South-South cooperation must be preserved, to ensure that it doesn’t substitute for other development principles and mechanisms. Civil
society groups cautioned that South-South cooperation should not be
prescriptive, as it is voluntary and based on solidarity (not obligation).
If the FfD outcome imposes conditions and obligations on South-South
cooperation this will be counter-productive in generating disincentives
to those who would otherwise expand South-South cooperation. The other key position of developed countries when it comes to the central question of mobilizing financial resources is that public domestic financing should be the primary financing mechanism in the FfD. The G77 rebuked this position, saying that the primary financing mechanism for FfD should be first and foremost international public financing. ODA represents the major source of financing for the development of many LDCs and other developing countries, and unfulfilled ODA commitments on the unfinished (MDGs) should be carried forward and the impact of the “ODA deficit” be assessed and estimated in the context of the review of the implementation of the Monterrey Consensus and Doha Declaration, as a matter of urgency. The G77 emphasized the importance of new and additional, as well as scaled up and predictable, financial commitments for sustainable development, so that the new financing required for the SDGs does not come out of funds that need to go to other priority needs. The decline of ODA in LDCs also needs to be highlighted and these figures need to be lifted up in accordance with targets and timetables. The modernization of ODA through the concept of total official support for development assistance (TOSDA) is a point of disagreement for the G77, and alternative language is to be proposed. China stated that international public finance is the major source of FfD, and ODA is the key source of this international finance. Brazil warned that there should not be a hierarchy placing domestic resources as the “crux” of financing for development as it states in the zero draft. Developing countries are united in holding a strong view that ODA plays a central role for developing countries especially those in special circumstances. There is also a need to review and follow up ODA commitments at the UN; otherwise they remain only rhetorical promises. The EU defended itself saying that they are not shying away from their ODA commitments and are determined to fulfil them, even if they have not yet been able to fully deliver them due to an unexpected – and major – global financial and economic crisis. However, the EU again put pressure on middle-income countries to deliver financial resources by stressing universal commitments (rather than a universal agenda). The EU said they “expect others to contribute their fair share, by which we mean universal commitments in line with capabilities.” Germany again supported the EU, saying that while they understand concerns that developed countries have not lived up to commitments and that this gap will become worse with an ambitious new development agenda, it is “crucial that developed and emerging countries increase support,” and that the overarching FFD process should support early movers. The US welcomed the use of ODA and public finance to serve as a catalyst for private finance, saying that such approaches would “remove constraints to sustained inclusive growth.” The US also welcomed measures to better measure all global flows, including through the OECD’s initiative to redefine the measurement of ODA through the total official support for development concept, which measures various types of public financing flows not just ODA. Civil society articulated strong critiques on both of these issues in its analysis and recommendations to the zero draft. Civil society highlighted the problem of the catalytic role of ODA. Utilizing ODA through market-based interventions such as pooled financing and leveraging raises concerns about both the evidentiary basis to support these interventions and the development impact. Conversely, there is also recognition of the role that ODA can play in supporting better domestic resource mobilisation including improving tax collection. The UN should not support such an ambiguous approach. The UN should be consistent with the call for ODA to be focused on the poor and the most in need, and ODA must target development outcomes directly with recipient countries and not through private sector blending. The OECD’s attempt to institutionalize the concept of the total official support for development is out of place and seems to be used as a way to either redirect or artificially increase the volume of aid, said civil society, clarifying that this is not a UN agenda but rather the OECD agenda. Furthermore, civil society stressed that the FfD zero draft should contain stronger language on ODA, such as “committing” (rather than merely “urging”) developed countries to meeting the 0.7% ODA deadline by 2020 through “binding” timetables in order to enforce and hold accountable ODA delivery. D. Domestic public finance (formerly known as mobilizing domestic resources) Intergovernmental committee on tax: key deliverable or elusive dream? The key action of the FfD zero draft’s section on domestic public finance is the decision in paragraph 28 to upgrade the UN Committee of Experts on International Cooperation in Tax Matters, including on double taxation treaties, transfer pricing, exchange of information, the taxation of extractive industries and capacity building, to an intergovernmental committee. This involves further enhancing the voice and participation of developing countries in norm setting for international tax cooperation. As a longtime priority of most developing countries, the G77 strongly supported this paragraph and suggested that it could be shifted to systemic issues section of the FfD zero draft. This would maintain the significance of international tax cooperation as a systemic and international issue, and not simply as a means of mobilizing domestic resources. The EU, supported by Germany and the US, were in direct opposition to the G77. They stated that they “cannot agree to the upgrading of the UN Tax Committee. For the EU, the current format of a committee of independent experts, chosen on a broad international basis, is appropriate.” The EU referred to the decision as “institutional proliferation,” saying that they would rather improve cooperation among existing bodies. Going a step beyond the G77 and in direct opposition to the EU, civil society lent its strong support to this vital decision, in that it would be one of the key deliverables of the third FfD conference. However, additional language is necessary, said civil society, to ensure that the decision to establish an intergovernmental body will occur before the current tax committee expires in 2017, is well-resourced and expands the membership of the committee, with an objective of including more developing countries. The tax committee currently includes only 25 countries. Prescriptive measures, but only for the South Another key content area of the domestic public finance section of the FfD zero daft is paragraph 19, which contains a directive to countries with government revenue from taxation below 20% of GDP agree to progressively increase tax revenues, with the aim of halving the gap towards 20% by 2025. The G77 stated that the outcome document should not impose on developing countries how much to raise in taxes, particularly when international tax cooperation on tax evasion, avoidance and transfer mis-pricing issues are still inadequately addressed. While there can be support to increase the tax base, there is no need to pin down specific numbers. This goes too far, and should thus be deleted. The EU unsurprisingly welcomed the language and expressed interest in exploring a “proportion of a country’s budget funded through tax” target. In fact, the EU expressed that UN member states should be more ambitious quantitatively. Halving the gap to 20% by 2025 will for some not be enough, and thus qualitative ambition is also needed. There should be stronger text on public financial management and anti-corruption at both national and international levels. The EU again stressed the importance of the domestic enabling environment, saying that domestic policies and reforms should create favourable conditions for macroeconomic stability, inclusive growth and sustainable development. This implies putting the right emphasis on an environment conducive to private sector development, investment, trade, as well as science, technology and innovation. Conversely, international enabling environment for sustainable development, namely through international systemic reforms, is absent from their discourse. Furthermore, the EU emphasized their own language in the zero draft where domestic resource mobilization is named the “crux” of financial resources. The EU posited that domestic public finance is by far the largest source of financing directly available to governments for investment in sustainable development, and that domestic resources are not as volatile as international flows and are an important component of the social contract that underpins government accountability. Given the glaring absence of any meaningful measures to facilitate the structural transformation of developing country economies towards equitable, dynamic and employment-based growth and development, the emphasis on domestic public finance is heavily contested by developing countries. It becomes yet another financial obligation on developing countries who also bear the adverse impacts of international rules and frameworks that are prejudiced against their right to development. Civil society analyzed the above paragraph on tax revenue and found it overly prescriptive, recommending that it be removed. They impose an obligation on developing countries since most developed countries already have high tax to GNP ratios. Without due considerations to equity, equality and progressive taxation, taxes can increase inequalities. From an equity and human rights perspective, the tax base should be expanded in a progressive manner, which implies reforms in tax structures to shift the burden to progressive direct taxes, such as income taxes, wealth taxes and corporate taxes, and to avoid gender bias in tax structures. Civil society recommended that a target is therefore needed for progressive taxation and national assessment of resource needs to meet the SDGs. The instrumentalization of women’s economic and social rights is a recurring theme in the FfD zero draft, and should be duly avoided. The language here frames women as the source of taxes, while paying little attention to direct tax resources from profitable economic and industrial sectors. The recommendation to promote social infrastructure and policies that enable women’s full participation in the economy and in the labour force should thus be detached from the previous sentence. Another prescription, found in paragraph 33, is to “gradually eliminate harmful subsidies,” which include fossil fuel subsidies for production and consumption. The G77 highlighted the fact that poorer segments of developing country populations depend on such subsidies. Civil society said that fossil fuels should not be selectively mentioned; there are other subsidies too such as agricultural subsidies in developed countries that are harmful. Furthermore, financing to offset this harm should also come from international financing if a developing country requires this, since it is an international public good to reduce subsidies that are harmful to the environment. +
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