Renewable energy advocates try and justify wind and solar subsidies by arguing that the fossil fuel industry has received trillions; therefore, it is only fair that wind and solar continually benefit from the generous tax credits allotted through legislation like the Inflation Reduction Act (IRA). What they fail to recognize is the skewed calculations employed to compute so-called trillions in taxpayer subsidies.
The exact number of fossil fuel subsidies differs depending on the source, but the global figure commonly referenced approaches $7 trillion. However, not all energy subsidy math is created equal, and this estimate calculated by the International Monetary Fund penalizes oil, coal, and natural gas for activities that should not be included in the grand total.
Roughly two-thirds of that figure consists of fossil fuel “side effects” such as air pollution, climate change, road damage, congestion, and accidents. Including by-products such as pollution in subsidy amounts is akin to including the litter resulting from food assistance programs; incorporating road wear and car accidents is like saying the agriculture industry is responsible for the obesity epidemic. It lacks logic.
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Kristen Walker is a policy analyst for the American Consumer Institute, a nonprofit education and research organization. For more information about the Institute, visit www.theamericanconsumer.org or follow us on X @ConsumerPal.