US subsidies of oil and coal more than double the subsidies of renewable energy

File under “Things that make me scratch my head:”

US subsidies of oil and coal more than double the subsidies of renewable energy

Jeremy Hance
mongabay.com
September 21, 2009

During the fiscal years of 2002-2008 the United States handed out subsidies to fossil fuel industries to a tune of 72 billion dollars, while renewable energy subsidies, during the same period, reached 29 billion dollars. Conducted by the Environmental Law Institute (ELI) in partnership with the Woodrow Wilson International Center for Scholars, the research shows that the US government has heavily subsidized ‘dirty fuels’ that emit high levels of greenhouse gases.

The funds provided to renewable energy sources plunges further when one takes into account that of the 29 billion dollars, 16.8 billion went to subsidizing corn-based ethanol, an energy source that numerous studies have shown is not carbon neutral and has been blamed in part for deforestation in the tropics and the global food crisis. The remaining 12.2 billion went to wind, solar, non-corn based biofuels and biomass, hydropower, and geothermal energy production.

Of the 72 billion dollars given to fossil fuels, 2.3 billion went to carbon capture and storage. The rest of the funds went to oil and coal.

via US subsidies of oil and coal more than double the subsidies of renewable energy.

I have no problem with using subsidies or the tax code to encourage private enterprise to move in a certain direction. But this boggles the mind. Why are we subsidizing businesses that have posted record profits, even in the middle of a recession, and slighting those that have demonstrated economic, employment, and environmental superiority?

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3 comments so far

  1. Anne Wayman on

    Sometimes I’m just plain embarrassed to be an American… when I think of what coal mining does… oh don’t get me started ;(

  2. markkeating on

    Anne:

    As my brother pointed out on FB, some of that “subsidy” takes the form of tax advantages that mature businesses can exploit (eg. amortization) that fledgling industries cannot. True enough, but either way it’s still money that comes out of the public treasury. They both distort the market, albeit in different ways, and make energy cheaper for the consumer.

    I think the real question is, where do our long-term interests lie? At the moment, the best thing that can be said about coal is that it’s cheap. (That is, if one puts aside the tremendous – for the moment – uncounted costs associated with using coal for generation: environmental devastation, mercury contamination, etc.). The fact remains that nobody is making more coal. Within my children’s lifetimes, if not my own, coal will cease to be a viable energy source. Why wait until it becomes a crisis to act? And how is it in our national interest to let Europe, China, and Japan take the lead in developing and deploying this technology?

    The biggest hurdle for renewables, especially wind, is that nearly all the costs associated with a wind farm are front-loaded into the construction phase. Ironically, this makes targeted tax incentives for wind even more logical, since a one-time investment of public funds will provide stable, clean energy at fixed rates for four or five decades. We should be throwing as much money at renewables as we can get our hands on.

  3. Anne Wayman on

    Totally agree… totally


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