Ending fossil fuel subsidies: A climate solution to get behind
President Biden dubbed Jan. 27, exactly one week after he took office, “climate day.” On this day, the president followed up on his day one climate order to rejoin the Paris Agreement and revoke Keystone XL pipeline with another bigger, broader order pushing the federal government closer toward confronting the climate crisis.
There is a lot to unpack in the landmark climate day order. The president set up a National Climate Task Force; emphasized science in federal policy-making; recommitted the United States to international climate leadership, including hosting a global summit on Earth Day, April 22; and preserved public lands and oceans by pausing oil and gas leases.
But not to be lost in the shuffle, Biden also ordered “federal agencies to eliminate fossil fuel subsidies as consistent with applicable law.” Recognizing that he could only do so much without Congress, the president went even further in his remarks, saying: “I don’t think the federal government should give handouts to Big Oil to the tune of $40 billion in fossil fuel subsidies.” He signaled he will turn to Congress to strike those subsidies.
Indeed, every year, the United States government gives away billions of dollars in tax breaks, incentives and other subsidies to fossil fuel companies. It’s hard not to agree with Biden here: why should we use our tax dollars to make global warming worse?
We’re already seeing the devastating impacts climate change has on our environment, health and livelihoods. Given the speed, scope and consequences of the problem, we need to stop burning fossil fuels and shift to clean renewable sources of energy as swiftly as possible. That means we must retire coal-fired power plants, oil-based transportation systems and other fossil fuel infrastructure, which, if we keep operating all of it, will add more than 650 billion tons of carbon dioxide to the atmosphere over the course of its lifetime.
Nevertheless, fossil fuel companies are planning new projects that will add nearly 200 billion tons of pollution to that total. That’s irresponsible and dangerous. Even worse, they’re counting on American taxpayers to help foot the bill with subsidies and tax breaks.
We shouldn’t be paying to fuel the climate crisis. We need a comprehensive plan to stop burning fossil fuels. Getting rid of subsidies and tax breaks is an important first step — one that will have a big impact. A 2017 study found that, depending on the region, 40 to 60 percent of oil resources are subsidy-dependent. Removing these subsidies will allow renewable sources of energy to compete and stop wasting our tax dollars on energy that pollutes our air and threatens our future.
By requiring federal agencies to eliminate subsidies, Biden is taking a big step toward solving the problem. There are plenty of regulatory subsidies, royalty relief programs and direct spending by agencies that benefit the fossil fuel industry. Under this order, those should be eliminated by administrative action. But the real money flowing from the government to the fossil fuel industry is in the form or tax expenditures and other subsidies provided for by law, meaning it will take congressional action to get rid of them.
That’s why what Biden said could be such a game-changer: no more money from the public purse should go to fossil fuels.
What do we get if we eliminate fossil fuel subsidies? We stop wasteful spending of taxpayer dollars to prop up an industry that’s contributing to global warming. We take away the competitive advantage that gives fossil fuels a leg up on renewables, even though they are cleaner, healthier and cheaper. We take a critical step toward preserving a livable climate and a healthy and safe future for ourselves, our children and our grandchildren.
We’re with Biden — it’s time for Congress to end fossil fuel subsidies.
Matt Casale is U.S. PIRG environment campaigns director.