By Faranak Bakhtiari

Subsidies should target environmental sustainability

December 6, 2020 - 18:7

TEHRAN – Targeted subsidy strategies can improve consumption patterns and trends toward natural renewable energy, which play a major role in environmental sustainability.

Conservation and development of natural resources are of great importance in creating employment, social and economic development. Hence, the preservation, development, rehabilitation, and sustainable exploitation of natural resources must be a priority.

But targeted subsidies can increase the price of fuel carriers, which ultimately leads to deforestation. Also, the elimination of subsidies for agricultural production units has negative consequences.

Among the positive consequences of eliminating subsidies are the drop of air, soil, water pollution, and reduction of fossil fuel consumption, fertilizers, and chemical toxins. Also, rising water prices can improve the pattern of drinking and agricultural water consumption and help feed groundwater and aquifers.

Rising prices of livestock forage and cattle production increase grazing, the effects of which are the destruction of vegetation and soil erosion causing numerous environmental consequences.

Therefore, it is necessary to pay attention to the field of natural resources in the implementation of targeted subsidies.

6.5% growth of “targeted subsidies” 

Like the previous years, the government submitted the administration’s draft of the national budget bill for the next [Iranian calendar] year (beginning on March 21, 2021) to Majlis earlier this month.

The proposed budget for the Iranian calendar year 1400, amounted to about 24.357 quadrillion rials (about $579.928 billion at the official rate of 42,000 rials), with a 20-percent rise from the current year’s approved budget.

The bill has envisaged public resources and expenditures, the budget of state-owned companies as well as the budget for various government bodies.

Supplying basic goods, treatment, and medical equipment; securing livelihood; supporting production and employment; promoting and supporting non-oil exports and knowledge-based companies are the focal points of the bill.

The amount related to targeted subsidies in the budget bill shows a 6.5 percent increase compared to the previous year.

In an interview with ISNA, Roozbeh Kordouni, head of the Social Security Organization Research Institute, said that a total of 2.6 quadrillion rials (nearly $63 billion) is proposed for targeted subsidies, which constitutes 11 percent of the total budget.

Poverty reduction, health development, and payment of subsidies to needy households are among the goals of the targeted subsidy plan.

€200m allocated to watershed management

The national budget bill for the next year has allocated €200 million to the implementation of pressurized irrigation and watershed management projects.

Of the €200-million estimated budget for this sector, €100 million is for the pressurized irrigation projects and €100 million for the watershed management projects.

Development footprint on environment

Many cases in Iran and other countries demonstrate the direct relation between socio-economic development and environmental degradation, showing that humans are using natural resources at a pace much faster than it can replenish.

For instance, deforestation is the permanent destruction of forests in order to make the land available for other uses. An estimated 18 million acres (7.3 million hectares) of the forest, which is roughly the size of the country of Panama, are lost each year, according to the United Nations' Food and Agriculture Organization (FAO).

Reza Bayani, an official with Forests, Range and Watershed Management Organization, said in April that approximately 12,000 hectares of forests across Iran are wiped out annually.

Referring to illegal logging as the leading cause of forest degradation, Bayani noted that timber smuggling steadily proceeding in the forests poses a serious threat to the country’s ecology for minor population benefits.

Seyed Mohammad Mojabi, head of the environment committee of the Expediency Council, said in May that following recurrent droughts and low precipitation, related organizations believed that severe rainfalls seem far-fetched in a country with an arid and semi-arid climate and decided to allow construction projects through river banks, which increased flood devastation.

Road construction also is another way of development which is at loggerheads with nature, mainly resulting in many irreparable damages including road surface erosion and sediment yield, slope failures and mass movement, direct loss of habitat (by the conversion of the original land cover into an artificial surface) and indirect loss of habitat (by the fragmentation of an ecosystem into smaller and more isolated patches).

Moreover, excessive groundwater withdrawal, dam construction, water transfer projects, land-use changes, and wildfires are also the fallouts of unplanned industrial expansion which bring environmental damages, and if thinking deeply it can be realized that they can also cause immeasurable financial losses in the long run.

Mohammad Reza Goldansaz, a researcher in the field of water resources, stated in June that an annual amount of 50 billion cubic meters of groundwater resources are withdrawn to supply agricultural, industrial as well as drinking water in Iran.


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