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Removing Fossil Fuel Subsidies Could Cut Greenhouse Gas Emissions in Half

Sen. Bernie Sanders has a new bill out to kill fossil fuel subsidies that come in the form of tax breaks for the oil and gas industry. Instead, Sanders would redirect those funds to generate 10 million solar roofs in America, which would create installation jobs and significantly reduce fossil fuel consumption.

“We’ve got to end all of the tax breaks for the oil companies and coal companies and I’m going to introduce legislation to do just that,” Sanders told demonstrators clad in black-and-white striped referee shirts who rallied to “blow the whistle” on members of Congress and Big Oil.

Ending tax breaks and subsidies for oil and gas companies would reduce the deficit by more than $40 billion over the next 10 years. Sanders’ legislation will end those tax breaks and tens of billions of dollars in other special subsidies for the fossil fuel industry.

It’s sadly not realistic to think this will go anywhere in Congress, at least not this year. But it’s worth pointing out that, if you care about climate change, if you want to see a reduction in greenhouse gas emissions the best thing you can do for the planet is to end these fossil fuel subsidies. It will get you halfway to the reduction in greenhouse gases we need, according to new studies. [cont’d.]

In data released this month as part of the IEA’s (International Energy Association’s) latest World Energy Outlook report, (Fatih Birol) shows that in 2010 the world spent $409 billion on subsidizing the production and consumption of fossil fuels, dwarfing the word’s $66 billion or so of subsidies for renewable energy. Phasing fossil fuel subsidies out would be sufficient to accomplish about half the reduction in greenhouse gas emissions needed to meet the goal of preventing average world temperatures from rising more than 2 degrees Celsius […]

Far and away the biggest problem seems to be that misguided sense that countries that are large producers of certain kinds of fuels ought to subsidize domestic consumption of the fuel in question. Thus Saudi Arabia spends more than $30 billion a year on gas consumption subsidies while Russia spends $17 billion on natural gas subsidies. Iran, which produces both, subsidizes both, spending $66 billion in total plus an additional $14.4 billion on electricity consumption subsidies. Large-population developing countries such as China, India, and Indonesia are also important players in the subsidy game. In no case do these subsidies make sense.

Compared to this, the US, with its relatively smaller amount of roughly $4-5 billion a year in fossil fuel subsidies, is a mere piker. However, it can lead by example. President Obama made a vow at an international summit in 2009 to end all fossil fuel subsidies around the world, and while he keeps putting it in his budgets, we haven’t accomplished that on our own shores. Until we end our fossil fuel subsidies, we won’t have much success at all getting other countries to end theirs.

I recognize that a lot of these subsidies are used by governments around the world as giveaways to the poor (in fact, the IEA study shows that this is not entirely true). There are simply other ways to do that that don’t harm the planet, and the US has some influence over those decisions. But we have to be willing to lead ourselves. Bernie Sanders has a way forward.

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David Dayen

David Dayen