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How much in subsidies do fossil fuels get anyway?

This article was published in Scientific American’s former blog network and reflects the views of the author, not necessarily those of Scientific American



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At least some members of the Obama administration plan to call for an end to fossil-fuel subsidies as part of next week's G20 economic leaders summit, citing positive impacts ranging from improved energy security to combating climate change. But how much does the U.S. government pay? Well, according to a new analysis from the Environmental Law Institute released today, roughly $72 billion between 2002 and 2008. More than $54 billion of that was in the form of 23 different tax credits for oil, coal and natural gas producers, including those overseas, most of which are permanent provisions of the U.S. Tax Code. Just $18.3 billion was grants and other direct cash for research and development and other pursuits, such as the Strategic Petroleum Reserve. Renewables such as wind, solar and hydropower received nearly $29 billion in all, much of it also in the form of tax credits although, in this case, credits that expire after set durations. And more than half of the renewable subsidy—$16.8 billion—went to the production of ethanol from corn, a controversial biofuel that can cut into food supplies and has significant environmental consequences, including greenhouse gas emissions and expanded dead zones from fertilizer runoff. "The vast majority of federal subsidies for fossil fuels and renewable energy supported energy sources that emit high levels of greenhouse gases when used as fuel," the report's authors write. "These figures raise the pressing question of whether scarce government funds might be better allocated to move the United States toward a low-carbon economy." Of course, not all fossil fuel subsidies are bad in that regard: research into carbon capture and storage, which garnered $2.3 billion, may be the key to preventing catastrophic climate change while we continue to burn coal. And there's a missing link, as well: nuclear energy, because electricity derived from fission is neither a fossil fuel nor renewable. But it is, once operating, a power source without carbon dioxide emissions.

Image: © iStockphoto.com / Andrew Penner