Fossil Fuel Subsidies–The Truth

NOT A LOT OF PEOPLE KNOW THAT

By Paul Homewood

Executive Summary

A number of studies claim that pervasive subsidies provide an unfair competitive advantage to fossil fuels over renewable energy. Many estimates have been made of the value of direct and indirect subsidies provided to fossil fuels, the most extreme being the 2015 study by the International Monetary Fund estimating fossil fuels subsidies at $5 trillion annually.

On examination, many of the direct subsidies in this study turn out to be generally available to other businesses, and most of the value of the indirect subsidies is estimated from uncertain projections of future damages from fossil-fueled global warming, which are discussed in detail in a previous CO2 Coalition White Paper, The Social Cost of Carbon and Carbon Taxes: Pick a number, any number. The most thoughtful and transparent evaluations of subsidies are those of the Organization for Economic Cooperation and Development (OECD), a European-based…

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