Reforming US fossil fuel subsidies: leveraging the Biden Administration's Executive Order
Reducing greenhouse gas (ghg) emissions in the United States to meet the country’s commitments under the Paris Accords is a formidable challenge. Eliminating subsidies to fossil fuels is an important component of this effort: it makes little sense to be subsidizing emissions at the same time we are trying to reduce them. The Biden Administration’s commitment to identify and remove fossil fuel subsidies (Section 209 in the January 27, 2021 Executive Order on Tackling the Climate Crisis at Home and Abroad, EO14008) offers a great deal of promise.
Subsidy reform can provide broader benefits to the country than just climate. Fiscal savings are often also generated, and these can be redeployed to other sectors of the economy, accelerating important structural changes that will benefit the country for decades to come.
With the goal of leveraging the reform commitment within EO14008, Earth Track recently revisited the issue of US fossil fuel subsidies to outline many of the top opportunities to eliminate, reform, and restructure existing subsidies to fossil fuels. The paper provides an introduction to the many different ways government subsidize industry, and highlights existing programs in need of attention. It includes relevant program history and context on the recommended policy changes.
Good government requires transparency on who is receiving subsidies, and the paper also highlights a number of places where the Administration should introduce or improve the datasets on government lending and leasing to the energy sector.