During this time of financial distress, there is one way that money can be invested more justly for a safer healthier future: cutting fossil fuel subsidies.
A few weeks ago, President Obama called on Americans to contact Congress and our representatives to reduce fossil fuel subsidies in the 2013 budget. He has outlined specific proposals for how fossil fuel preferences—which total $4 billion—will be decreased.
Some money that is classified as fossil fuel subsidies is actually put towards the Low Income Home Energy Assistance Program and other federally funded social projects, which are not touched by the President’s reforms. Instead, the administration proposes eliminating $29.1 billion in tax breaks and $113 billion in R&D for fossil fuel technologies. In total, the US would save $4.75 billion in 2013 and $39 billion over the next ten years.
The human cost of these subsidies is readily apparent: fossil fuels cause pollution that contributes to over 2 million severe respiratory illnesses across the US. Burning fossil fuels is one of the main contributors to global climate change. The US is second only to China in fossil-fuel derived CO2 emissions, and has the highest per capita fossil fuel consumption rates in the entire world. A global phase-out of fossil fuel subsidies “could provide half of the carbon savings needed to stop dangerous levels of climate change.”
The financial argument is compelling as well. Eliminating fossil fuel subsidies would not have a large effect on the American economy. Less than 1% of fossil fuel companiesʼ revenue would be affected. The rise in taxes in for the average American citizen would only total $1.42-6.50 per year. Furthermore, the rise in the total cost of petroleum products is only $2.17 per person per year. Lastly, there would be little to no reduction in US GDP or employment levels because little of the industry’s revenue would be affected.
The savings from cutting subsidies could be invested in a sustainable economy. Funding is desperately needed in the renewable energy sector and other areas of our economy that are working to help people, create jobs and alleviate poverty. From 2002-2008, the fossil fuel industry received $72 billion in subsidies. The renewable energy sector received only $29 billion. By investing more money in renewable energy, a green economy can emerge that will allow for job growth as well. Furthermore, public support for these cuts is already evident. 68% of Democrats and 67% of Republicans either somewhat oppose or strongly oppose fossil fuel subsidies. They too want money to be invested in better ways.
The world is in a precarious state—financially, environmentally, and socially. Climate change is already threatening many lives, and fossil fuels are the main source of rampant pollution and unsustainable energy. The industry receives unnecessary funding—funding that could be used to save, not harm, our planet and people.