Fossil Fuels Received $5.9 Trillion In Subsidies in 2020, Report Finds
https://e360.yale.edu/digest/fossil-fue ... port-finds
Coal, oil, and natural gas received $5.9 trillion in subsidies in 2020 — or roughly $11 million every minute — according to a new analysis from the International Monetary Fund.
Explicit subsidies accounted for only 8 percent of the total. The remaining 92 percent were implicit subsidies, which took the form of tax breaks or, to a much larger degree, health and environmental damages that were not priced into the cost of fossil fuels, according to the analysis.
“Underpricing leads to overconsumption of fossil fuels, which accelerates global warming and exacerbates domestic environmental problems including losses to human life from local air pollution and excessive and road congestion and accidents,” authors wrote. “This has long been recognized, but globally countries are still a long way from getting energy prices right.”
The report found that 47 percent of natural gas and 99 percent of coal is priced at less than half its true cost, and that just five countries — China, the United States, Russia, India, and Japan — account for two-thirds of subsidies globally. All five countries belong to the G20, which in 2009 agreed to phase out “inefficient” fossil fuel subsidies “over the medium term.”
The absurd truth about fossil fuel subsidies
https://generation180.org/the-absurd-tr ... subsidies/
U.S. taxpayers spend tens of billions of dollars a year subsidizing new fossil fuel exploration, production, and consumption, which directly affects how much oil, natural gas, and coal gets produced—and how much clean energy doesn’t.
First, let’s consider just the direct subsidies for fossil fuel production—money that flows directly from the government to fossil fuel companies to support activities like exploration, extraction, and development. A conservative estimate from Oil Change International puts the U.S. total at around $20.5 billion annually, including $14.7 billion in federal subsidies and $5.8 billion in state-level incentives. A whopping 80 percent of this goes to oil and gas (with the rest supporting coal), and most of the subsidies are in the form of tax deductions and exemptions and other “obscure tax loopholes and accounting tricks” that result in massive avoided costs for fossil fuel producers.
By comparison, direct U.S. subsidies to renewables are much smaller, and renewable energy developers aren’t even able to access many of the same breaks that fossil fuel industries do. Moreover, most of the tax breaks that renewables get—like the investment and production tax credits for wind and solar—are only temporary (so far), with expiration dates looming. Looking at the permanent tax expenditures alone, these favor the fossil fuel industry over the renewable energy sector 7 to 1, with permanent tax spending for renewables totaling only around $1.1 billion in 2016.
But this is only a small part of the picture. On top of the direct production subsidies, fossil fuels are bolstered by massive additional supports, including an estimated $14.5 billion in subsidies on the consumption side (payments that help consumers with things like paying for home heating oil), and by around $2.1 billion a year in subsidies paid for overseas fossil fuel projects.
Overshadowing all of these are the indirect or “implicit” subsidies for fossil fuels, which range from the infrastructure spending to maintain the sprawling (and aging) fossil-based energy system, to the diverse impacts that burning fossil fuels has on our health and climate. The International Monetary Fund estimated that the costs to the U.S. government from climate change, local air pollution impacts, and infrastructure damage not captured by energy taxes totaled $686 billion in 2015.