In case you missed it, Solve Climate News has an excellent article on the scope of fossil fuel subsidies and the prospects for reining them in. According to the article’s subtitle, “The cuts were included in the last two budgets submitted to Congress, but were never implemented.” How much money are we talking about here?
For decades, tax breaks and federal incentives have been a boon to the U.S. fossil fuels industry. Numbers compiled by the Environmental Law Institute reveal that those figures totaled $72 billion between 2002 and 2008—about $10 billion annually. Figures from Kretzmann’s organization put annual U.S. subsidy figures to these mature technologies somewhere between $6 billion and $39 billion annually, depending on what is included in the count.
Breaking this down, federal energy subsidies between 2002 and 2008 amounted to: $70 billion in tax breaks and direct spending to “traditional fossil fuels;” $16.8 billion to “corn ethanol;” $2.3 billion to “carbon capture and storage;” and $12.2 billion to “traditional renewables.” Now, there’s speculation that some or all of these subsidies could be on the chopping block in Congress.
After Republicans dominated the mid-term elections last fall, Capitol Hill trackers speculated that slicing away at fossil fuel subsidies could provide common ground for Democrats who are longtime advocates of taking such action and Republicans intent on righting the national deficit and debt crisis by whittling away at budget waste.
It wasn’t perceived as an issue confined to the extreme left or right. None other than the Bipartisan Policy Center, a levelheaded, Washington-based think tank, endorsed the paring of such subsidies.
Just a few weeks into the 112th Congress, however, observers are already doubting that such a harmonic convergence can occur.
“This is a chance for Congress to decide what’s more important, deficit reduction or the oil industry that pays for campaigns?” Kretzmann said. “It’s about principle rather than rhetoric.
It’s a fascinating question for lawmakers and policy wonks to consider. It’s also something for those of us in the cleantech community to keep our eyes on in coming weeks and months, as the debate over the budget deficit and long-term infrastructure investment heats up in the current Congress.