Discussing the blue economy: considerations from a public expenditure review on tax exemption and subsidies

Abstract

How should one assess whether traditional ocean industries and new ocean emerging activities have the right incentives to engage into a blue sustainable economy path? The case of Brazil’s Public Expenditure Review (PER) of tax exemption and subsidies applied to ocean related economic activities from 2011 to 2018 opens the debate. The extra-budgetary PER is applied with the Rio Markers from Organization for Economic Co-operation and Development (OECD), the economic activities listed by the World Bank´s Blue Economy, Ocean Decade’s results and Sustainable Development Goal 14 targets. The data on tax exemption and subsidies was obtained from official sources, from the Federal Government Budget System maintained by the Ministry of Economy. The screening was carried out for all national level tax relief and subsidies applied during 2011 and 2018. There were 316.4 billion reais (US$ 80.2 billion) spent by Brazil’s Federal government on ocean-related economic activities, either directly or indirectly, through subsidies and tax relief over 2011-2018. The accumulated GDP over that period was equivalent to 45.9 billion reais (US$ 11.6 billion). The sector that most benefitted is Agriculture (includes fishing), which received around 229.1 billion reais (US$ 58.0 billion) in incentives during this period. As for the method, it is necessary to develop and establish standardized ocean related markers in the economy and in PER reviews.

Descriptors:
Public Expenditure Review; Blue Economy; Sustainable Development; Subsidies; Tax Expenditure