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

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.



“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.”



The subsidies are provided through tax breaks and direct funds provided for research and development.











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