The response to Obama’s speech at the UN has been tepid, but buried in it was this nugget: “Later this week, I will work with my colleagues at the G-20 to phase out fossil fuel subsidies so that we can better address our climate challenge.”
According to a recent analysis by the Environmental Law Institute, the US gave out $72 billion to oil, gas and coal companies between 2002 and 2008. Meanwhile, as Brad Plummer at the TNR points out, renewable energy received $29 billion worth of subsidies, though $16 billion of that went to ethanol.
Eliminating the pollution that comes from fossil fuels is one of the administration’s priorities. Scrapping subsidies is one way to go about it. Considering oil companies were making record profits last year, it’ll be hard for them to complain too loudly. And we can’t picture many politicians coming out publicly in favour of subsidies for fossil fuels.
But, will Obama actually scrap fossil fuel subsidies? We highly doubt it. The industry just wouldn’t allow it. It could easily be turned into an issue about jobs. Plus, energy prices would rise. No politician wants to be culpable for raising your energy bill and costing you a job.
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