A recent analysis found that damage from extreme weather intensified by climate change and the health impacts from using gas, oil, and coal have cost the U.S. economy an annual average of $240 billion in the past decade. Between now and 2028, that figure is expected to rise to $360 billion annually—more than half of the economy's growth—and that doesn't even account for the cost of industry subsidies.
A report by Oil Change International (OCI) found that industry subsidies cost U.S. taxpayers more than $20 billion each year, $14.7 billion at the federal level and $5.8 billion at the state level. These subsidies take several forms—including financial handouts, flexible liability policies, and tax breaks—and, researchers argue, "waste billions of dollars propping up an industry incompatible with safe climate limits."
A report by Oil Change International (OCI) found that industry subsidies cost U.S. taxpayers more than $20 billion each year, $14.7 billion at the federal level and $5.8 billion at the state level. These subsidies take several forms—including financial handouts, flexible liability policies, and tax breaks—and, researchers argue, "waste billions of dollars propping up an industry incompatible with safe climate limits."
A separate study by Stockholm Environment Institute (SEI), published Monday in the journal Nature, examined the impact of subsidies on U.S. crude oil production, and concluded that subsidies to oil companies encourage them to drill oil fields that would otherwise be unprofitable.
Over the next few decades, SEI researchers estimate, "tax preferences and other subsidies push nearly half of new, yet-to-be-developed oil investments into profitability, potentially increasing U.S. oil production by 17 billion barrels" that, once burned, will release about 6 billion tonnes of carbon dioxide, or CO2, into the atmosphere.
"This is oil we don't need and it takes the U.S. further away from its climate goals of reducing CO2 emissions," report co-author Peter Erickson, a senior scientist at SEI's U.S. center, said. The U.S. currently ranks second, behind only China, in global CO2 emissions.
The OCI report concludes that "every dollar spent subsidizing this industry takes us further away from achieving internationally agreed emissions goals, and maintaining a stable climate." It also notes that without a rapid reduction in U.S. fossil fuel reliance, the world will likely fail the meet goals outlined in the 2015 Paris climate accord, in which nearly every nation on Earth agreed to reduce greenhouse gas emissions in hopes of limiting global average temperature rise to below 2°C, while aiming for below 1.5°C.
U.S. Subsidies, the OCI report notes, "have been defended by a Congress influenced by $350 million in campaign contributions and lobbying expenditures by the fossil fuel industry," which reseachers estimate "equates to a 8,200 percent return on investment."
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