Uncle Scam: Taxpayer dollars subsidizing destruction

Attributed Authors: Lester Brown, Earth Policy Institute Published: Apr 2010

One way to correct market failures is tax shifting -- raising taxes on activities that harm the environment so that their prices begin to reflect their true cost and offsetting this with a reduction in income taxes. A complementary way to achieve this goal is subsidy shifting. Each year the world's taxpayers provide at least $700 billion in subsidies for environmentally destructive activities, such as fossil fuel burning, overpumping aquifers, clearcutting forests, and overfishing. As the Earth Council study Subsidizing Unsustainable Development observes, "There's something unbelievable about the world spending hundreds of billions of dollars annually to subsidize its own destruction."


While some leading industrial countries have been reducing subsidies to fossil fuels -- notably coal, the most climate-disrupting of all fuels -- the United States has increased its support for the fossil fuel and nuclear industries. Doug Koplow, founder of Earth Track, calculated in a 2006 study that annual U.S. federal energy subsidies have a total value to the industry of $74 billion. Of this, the oil and gas industry gets $39 billion, coal $8 billion, and nuclear $9 billion. He notes that today these numbers "would likely be a good deal higher." At a time when there is a need to conserve oil resources, U.S. taxpayers are subsidizing their depletion.


Tags: environmentally harmful subsidies