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Your Tax Dollars Fund Climate Change Denial

US still spending billions a year on fossil fuel subsidies

Climate change scientists and energy forecasters are quite clear that the world has at least three times as many fossil fuels in proven reserves as we can afford to burn and emit into the atmosphere. In 2012, the International Energy Agency warned that “no more than one-third of proven reserves of fossil fuels can be consumed prior to 2050” if the world wants to limit climate change to relatively safe levels. The Intergovernmental Panel on Climate Change reached a similar conclusion in its 2013 climate assessment. These findings just confirm what should be common sense by now: In order to avoid catastrophic climate change, we need to keep most of the oil, coal and gas in the ground.

Reduce the deficit by ending taxpayer-funded subsidies to Big 5 Oil CompaniesImage by HouseBudgetCmte, on Flickr

Yet many policymakers – even those who are otherwise quite concerned about climate change – have yet to internalize this key piece of information. This failure is perhaps somewhat understandable. The simple calculation of how much additional carbon our atmosphere can safely absorb (aka “the carbon budget”) puts a very fine and bright line on the fundamental question beneath the climate crisis: How quickly can we stop our dependence on fossil fuels and switch fully to clean energy?

Atmospheric physics doesn’t care that this is a very difficult question politically, economically, and financially. It simply states that there is a limit to how much carbon we can put in the atmosphere – and that we need to heed that limit or we risk climate chaos.

The world is in a deep hole when it comes to climate change and fossil fuels. The first rule of holes is that when you find yourself in one, stop digging. Not only is the world nowhere close to stopping digging – the fossil fuel industry spends upwards of $600 billion annually on new exploration – but on top of this, most governments are actually still using taxpayer funds to assist these extremely profitable industries.

As David Turnbull, campaigns director with Oil Change International puts it: “Rather than putting down the shovel, the US government is using even more taxpayer dollars to buy backhoes.”

According to a new analysis, the US federal and state governments currently make available more than $21 billion in subsidies to oil, gas, and coal companies each year to promote increased fossil fuel production and exploration. Thanks at least in part to these huge subsidies, US fossil fuel production is booming. Between 2009 and 2013, gas production increased by 18 percent and oil production increased by 35 percent. Although President Obama has pledged to tackle climate change, he champions the oil and gas boom as the centerpiece of his administration’s “All of the Above” energy strategy.

Since President Obama took office, federal fossil fuel production subsidies have grown in value by 45 percent, from $12.7 billion to a current total of $18.5 billion. This rise is mostly due to increased oil and gas production: the value of tax breaks and other incentives has increased along with greater production and profits, essentially rewarding companies for accelerating climate change.

President Obama does deserve credit for urging an end to some of the most direct and fastest-growing subsidies to the oil industry. Every budget he has sent to Capitol Hill has called for an elimination of some subsidies. But Congress has blocked these proposals. If the president’s proposals had been followed, there would have been $6.1 billion less in fossil fuel subsidies in 2013, and the value of federal subsidies would have declined by 2 percent during the Obama administration.

It should be noted that even the shockingly large numbers outlined above are only a small part of US government support for the fossil fuel industry. Counting subsidies for consumption and international finance, US support is at least $37.5 billion annually. Then there’s the social cost of carbon, the health impacts, and the military expenditures, among other things. The International Monetary Fund actually estimates fossil fuels cost US taxpayers $502 billion each year, when you include the social cost of carbon and other externalities. Yes, you read that right – a half trillion dollars to help wreck the atmosphere.

Discussions about subsidies often get derailed into arguments about what the “true” values of subsidies are. These arguments miss the point, which is simply that it makes no sense at all to use any taxpayer dollars to prop up an industry that climate science unequivocally tells us must be phased out.

The cold, hard fact is that we have significantly more fossil fuels in global reserves than we can afford to burn. If you don’t accept that fact, or if you are trying to find a way around that fact, you are engaged in climate denial.

Unfortunately, all but the most forward thinking policymakers in Washington are in denial or only on the first step of emerging from denial of our addiction to fossil fuels and the implications of climate science. If Step One was recognizing we have a problem, surely the next step is to stop funding fossils.

Stephen Kretzmann
Stephen Kretzmann is Founder and Executive Director of Oil Change International, a research and advocacy organization focused on exposing the true costs of our addiction to fossil fuels. Learn more at

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What a shame there’s no self-contained nuclear power business.  The only one we have is an accessory to the nuclear weapons business.  An independent nuclear fission energy business would never have messed around with uranium and plutonium.  The business we have was designed to consume waste products from the bombs biz, but doesn’t do it efficiently.  An independent nuclear power industry would have been based on thorium, and wouldn’t have most of the problems we see with the industry we have.  Perhaps environmentalists will understand that someday.

By Cameron on Thu, July 17, 2014 at 8:36 am

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