Fossil Fuel Subsidies: A Closer Look

This executive summary from the Environmental and Energy Study Institute discusses the nature and scale of fossil fuel subsidies in the United States, distinguishing between direct spending and indirect tax expenditures, and calls for a re-examination of these policies in light of industry maturity and environmental externalities.

• The document distinguishes between direct subsidies, which involve spending on research and development and other programs, and indirect subsidies, which are tax expenditures or foregone government revenue. Indirect subsidies are three times larger in scale than direct subsidies and often persist indefinitely without re-examination.
• Many fossil fuel subsidies in the U.S. tax code have existed for up to a century and may no longer be justified because the coal, oil, and natural gas industries are now mature and highly profitable. The indirect subsidies examined in the paper are estimated to cost nearly $50 billion over the next decade, while the National Academy of Sciences suggests fossil fuel externalities could exceed $1 trillion over ten years, excluding climate-related costs.
• International organizations including the OECD, the International Energy Agency, and the G20 have advocated for the phase-out of fossil fuel subsidies. The document suggests that U.S. policymakers should evaluate whether these subsidies are still justified or if they should be repealed or modified to avoid skewing the market and to align with energy security and climate change concerns.

APA

Environmental and Energy Study Institute (2011). Fossil Fuel Subsidies: A Closer Look. https://www.eesi.org/papers/view/issue-brief-fossil-fuel-subsidies-a-closer-look

Chicago

Environmental and Energy Study Institute. Fossil Fuel Subsidies: A Closer Look. 2011. https://www.eesi.org/papers/view/issue-brief-fossil-fuel-subsidies-a-closer-look.

Wikipedia

{{cite report |author=Environmental and Energy Study Institute |title=Fossil Fuel Subsidies: A Closer Look |date=23 June 2011 |url=https://www.eesi.org/papers/view/issue-brief-fossil-fuel-subsidies-a-closer-look |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{environmentalandenergystudyinstitute2011fossil, author = {{Environmental and Energy Study Institute}}, title = {{Fossil Fuel Subsidies: A Closer Look}}, institution = {Environmental and Energy Study Institute}, year = {2011}, month = jun, url = {https://www.eesi.org/papers/view/issue-brief-fossil-fuel-subsidies-a-closer-look}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }