The Role of Fossil Fuel Subsidies in Preventing Action on the Climate Crisis

The testimony argues that US fossil fuel subsidies primarily increase excess profits rather than creating jobs, undermine global climate goals, and contribute to public health crises and environmental inequalities.

• Fossil fuel subsidies in the US are an inefficient tool for economic support because the vast majority of their value benefits oil and gas wells that are already profitable and would be developed without assistance. Research indicates that more than 96% of subsidy value goes toward excess profits beyond the minimum investment requirements, meaning they do not significantly contribute to job creation.
• Subsidies undermine climate goals by increasing greenhouse gas emissions during periods of low oil and gas prices and by sending a symbolic signal to other nations that the US is not committed to climate action. This contradicts a 2016 commitment made by the US and other G7 governments in Japan to eliminate fossil fuel subsidies by 2025.
• Fossil fuel subsidies indirectly cause air and water pollution that harms community health. In Appalachia, the cumulative health damages from the shale gas boom exceed the employment benefits. In Texas's Eagle Ford basin, the practice of burning off waste natural gas releases toxic and carcinogenic compounds, which occurs more frequently in Hispanic neighborhoods than in non-Hispanic ones.
• Subsidies take various forms beyond direct payments, including tax code provisions like the percentage depletion allowance and the intangible drilling cost provision. Additionally, inadequate fees for retiring oil and gas wells have created a clean-up liability totaling hundreds of billions of dollars that may be borne by the public.

APA

Erickson, P. (2021). The Role of Fossil Fuel Subsidies in Preventing Action on the Climate Crisis. Stockholm Environment Institute. https://www.sei.org/features/fossil-fuel-subsidies-hearing/

Chicago

Erickson, Peter. The Role of Fossil Fuel Subsidies in Preventing Action on the Climate Crisis. Stockholm Environment Institute, 2021. https://www.sei.org/features/fossil-fuel-subsidies-hearing/.

Wikipedia

{{cite press release |last1=Erickson |first1=Peter |title=The Role of Fossil Fuel Subsidies in Preventing Action on the Climate Crisis |publisher=Stockholm Environment Institute |date=22 April 2021 |url=https://www.sei.org/features/fossil-fuel-subsidies-hearing/ |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@misc{erickson2021role, author = {Erickson, Peter}, title = {{The Role of Fossil Fuel Subsidies in Preventing Action on the Climate Crisis}}, publisher = {Stockholm Environment Institute}, year = {2021}, month = apr, url = {https://www.sei.org/features/fossil-fuel-subsidies-hearing/}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }