A Sept. 2009 study by the Environmental Law Institute (ELI) confirms that:
Despite the national dialogue on energy use and climate change, the U.S. government has continued to subsidize greenhouse-gas emitting fossil fuels to a significant degree, while directing substantially less support to renewable energy sources. A large portion of the $72 billion in fossil fuel subsidies derives from just a few provisions in the U.S. Tax Code. These figures raise the pressing question of whether scarce government funds might be better allocated to move the United States towards a low-carbon economy. Estimating U.S. Government Subsidies to Energy Sources: 2002-2008
The federal government provided substantially larger subsidies to fossil fuels than to renewables. Subsidies to fossil fuels — a mature, developed industry that has enjoyed government support for many years—totaled approximately $72 billion [between 2002 & 2008], representing a direct cost to taxpayers. U.S. Tax Breaks Subsidize Foreign Oil ProductionApplying a conservative approach, the study finds that Energy Subsidies are Black, Not Green:
- 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.
- Subsidies for renewable fuels, a relatively young and developing industry, totaled $29 billion over the same period.
- Subsidies to fossil fuels generally increased over the study period (though they decreased in 2008), while funding for renewables increased but saw a precipitous drop in 2006-07 (though they increased in 2008).
- Most of the largest subsidies to fossil fuels were written into the U.S. Tax Code as permanent provisions. By comparison, many subsidies for renewables are time-limited initiatives implemented through energy bills, with expiration dates that limit their usefulness to the renewables industry.
- The vast majority of subsidy dollars to fossil fuels can be attributed to just a handful of tax breaks... The largest of these, the Foreign Tax Credit, applies to the overseas production of oil through an obscure provision of the Tax Code, which allows energy companies to claim a tax credit for payments that would normally receive less-beneficial tax treatment.
Earth Track works to make government subsidies that harm the environment easier to see, value, and eliminate. There are thousands of environmentally-harmful subsidies throughout the world, contributing to global challenges such as overfishing, excessive clearing of forests, water depletion, and climate change. The subsidies alter market prices and investment incentives, distorting wide ranging market decisions on what to buy, what to build, and when and where to do it.Subsidies 101: Gross subsidies to oil + Gross offsets = Net subsidies to oil
And, in Feb. 2010, the International Monetary Fund issued its Staff Position Note on the upward trend in oil subsidies:
Petroleum product subsidies have again started to rise with the rebound in international prices. In 2003, global consumer subsidies for petroleum products totaled nearly $60 billion. They are projected to reach almost $250 billion in 2010. Tax-inclusive subsidies, reflecting suboptimal taxation, are estimated to be much larger—$740 billion in 2010, or 1 percent of global GDP. Petroleum Product Subsidies: Costly, Inequitable, and Rising