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Subsidizing Fossil Fuels: $72 billion (vs $29 billion)

Posted By Barry Ritholtz On July 15, 2010 @ 3:00 pm In Digital Media,Energy | Comments Disabled

I’m a gearhead. I like the sound a V8 or V12 makes when I mash down my right foot and those pretty butterflies open up.

But I am not unaware of the external costs of my hobbies. Which is why I found this research piece, titled Energy Subsidies Favor Fossil Fuels Over Renewables [1], rather interesting. It turns out, according to this one analysis, that the vast majority of federal energy subsidies are for fossil fuels rather than to renewables or new alternative technologies: $72 billion vs $29 billion over the same period. (These are direct subsidies, tax breaks, etc., and do not include things like the military budget).

The question I have is given how wealthy Oil and natural gas firms are, why on earth are we subsidizing them at all?

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[2]

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The vast majority of subsidy dollars to fossil fuels can be attributed to just a handful of tax breaks,

Note: Almost half of the subsidies for renewables are attributable to corn-based ethanol.

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Source:
Estimating U.S. Government Subsidies to Energy Sources: 2002-2008 [3]
Environmental Law Institute, September 2009
http://www.elistore.org/Data/products/d19_07.pdf


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URL to article: http://www.ritholtz.com/blog/2010/07/subsidizing-fossil-fuels/

URLs in this post:

[1] Energy Subsidies Favor Fossil Fuels Over Renewables: http://www.eli.org/Program_Areas/innovation_governance_energy.cfm

[2] Image: http://www.ritholtz.com/blog/wp-content/uploads/2010/07/fossilfuels.jpg

[3] Estimating U.S. Government Subsidies to Energy Sources: 2002-2008: http://www.elistore.org/Data/products/d19_07.pdf

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