Fossil fuel producers in the U.S. are directly benefiting from implicit subsidies on the order of $62 billion a year because of inefficient pricing that doesn’t properly account for the costs of damages to the environment, climate, and human health.
That’s the finding of a newly published study in the Proceedings of the National Academy of Sciences (PNAS) by Yale School of the Environment Economics Professor Matthew Kotchen that analyzed gasoline, natural gas, diesel, and coal.
The total annual implicit subsidy is equivalent to an average of 3% of the U.S. gross domestic product, according to the study which examined data from 2010-2018. But the primary focus of Kotchen’s research is on the portion of that amount that directly benefits fossil fuel producers. And this translates into large amounts for individual companies because of the relatively small number of fossil fuel producers.
clarify why many in the fossil fuel industry oppose more efficient regulatory reform to address climate change, why they may support weak rather than efficient policy, or both.