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Dave Roberts: Direct Fossil Fuel Subsidies Just "tip of the (melting) iceberg"

3 min. read

We've written extensively here at Scaling Green on the subject of taxpayer-funded subsidies to the dirty energy industry.  That includes our interview with a top energy expert from the U.S. Energy Information Administration, who explained that, although there have been numerous attempts at counting energy subsidies -- ranging from $10 billion a year by the Environmental Law Institute, to the more comprehensive, $52 billion a years by Doug Koplow of EarthTrack - "there’s no one really widely available number where average citizens can say, yeah, this much of my money goes to pay ExxonMobil."

We've also interviewed West Virginia University Professor Michael Hendryx, who has found that mountaintop removal mining’s economic cost to Appalachian communities totaled roughly $42 billion per year in lost health and lives. Hendryx also contributed to a groundbreaking Harvard study which found that the full “lifecycle cost” of coal to the U.S. public is actually upwards of $500 billion a year.

On and on it goes -- direct subsidies, indirect subsidies, uncounted health and environmental "lifecycle cost" and other "externalities" stemming from the production and consumption of fossil fuels.  It's enormous and even mindboggling attempting to get a handle on all of this. Fortunately, as Dave Roberts of Grist points out, there's "an updated report from consultancy Management Information Services Inc., which tries to tally up every kind of direct subsidy -- tax credits, regulation, R&D money, etc. -- from 1950 to 2010."  Roberts boils it down for us: "fossil fuels have gotten the bulk of government help -- 70 percent to renewables' 10 percent, for a total of $594 billion in fossil-fuel subsidies over the last 60 years."

Unfortunately, as Roberts explains, although these direct subsidies tell an important part of the story, "this kind of bean counting radically understates the fossil fuels' built-in advantages" and "misses the two greatest sources of public support for fossil fuels, both of which are indirect, both of which dwarf direct subsidies." A few of these costs include:

*"the extraordinary public health costs of air and water pollution"

*"the national security costs of reliance on oil, which account for at least some portion of the estimated $3 trillion cost of the Iraq and Afghanistan wars"

*"the costs of climate change"

*"demand for fossil fuels, which has been locked in by a century's worth of massive and ongoing infrastructure spending"

Add up all these subsidies - direct and indirect - and  the totals would be utterly enormous if they could ever be definitively counted.  And, it should go without saying, these gigantic market distortions drastically and fundamentally tilt the "playing field" away from alternatives to fossil fuels, and relentlessly back towards the status quo.  As Roberts eloquently and succinctly concludes:

The simple fact is that modern industrial society was built by, around, and for fossil fuels....

Viewed in this light, fossil fuels and renewables are not really "competing" on some common "playing field." Fossil fuels built the field; it is designed for their game. Renewables don't just have to produce energy at competitive prices, they must bring along with them new applications, new infrastructure, new institutions and practices. To switch from fossil fuels to renewable energy is not like going from Coke to Pepsi; it is to build a new world.

Comparisons of direct subsidies capture only the tip of a giant iceburg -- most of fossil fuels' big advantages are invisible, beneath the surface, and entirely taken for granted.

So, the next time you hear a fossil fuel shill claim that dirty energy isn't really subsidized, or even that it's clean energy that can only exist with taxpayer-funded corporate welfare, we recommend that you point them to Dave Roberts' brilliant article on this subject.