Government Subsidies Favor Fossil Fuels Over Renewables
New research shows that, from 2002 to 2008, the federal government gave more than two times the financial support it gave to renewable energy initiatives to fossil fuel production.
September 24, 2009
From the Environmental Law Institute
 |
Over the seven-year period the Environmental Law Institute considered, the majority of federal government subsidies for renewable energy went to corn-based ethanol, the climate effects of which are still hotly disputed.
FLICKR/JAMS_123
|
A study from the Environmental Law Institute (ELI), in partnership with the Woodrow Wilson International Center for Scholars, reviewed fossil fuel and energy subsidies for Fiscal Years 2002 to 2008, and found that the lion’s share of energy subsidies supported energy sources that emit high levels of greenhouse gases.
RELATED CONTENT
The U.S. Department of Energy's work with the city of Greensburg, Kan., over the past year is beari...
A new study predicts we could have one quarter of our energy needs from renewable sources by 2025, ...
Which renewable energy technology has the best potential to combat global warming and power our fut...
Missouri creates a stronger market for renewable energy by passing a clean energy initiative....
The research demonstrates that the federal government provided substantially larger subsidies to fossil fuels than to renewables. Fossil fuels benefited from approximately $72 billion over the seven-year period, while subsidies for renewable fuels totaled only $29 billion. More than half the subsidies for renewables — $16.8 billion — are attributable to corn-based ethanol, the climate effects of which are hotly disputed.
Of the fossil fuel subsidies, $70.2 billion went to traditional sources — such as coal and oil — and $2.3 billion went to carbon capture and storage, which is designed to reduce greenhouse gas emissions from coal-fired power plants. Thus, energy subsidies highly favored energy sources that emit high levels of greenhouse gases over sources that would decrease our climate footprint.
The U.S. energy market is shaped by a number of national and state policies that encourage the use of traditional energy sources. These policies range from royalty relief to the provision of tax incentives, direct payments and other forms of support to the non-renewable energy industry.
“The combination of subsidies — or ‘perverse incentives’ — to develop fossil fuel energy sources, and a lack of sufficient incentives to develop renewable energy and promote energy efficiency, distorts energy policy in ways that have helped cause, and continue to exacerbate, our climate change problem,” notes ELI Senior Attorney John Pendergrass. “With climate change and energy legislation pending on Capitol Hill, our research suggests that more attention needs to be given to the existing perverse incentives for ‘dirty’ fuels in the U.S. Tax Code.”
