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Obama vs Dirty Energy Subsidies

By Matthew Yglesias  

"Obama vs Dirty Energy Subsidies"

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Free market zealots are eager to block efforts to subsidize clean energy, but tend to neglect the existence of large subsidies for dirty energy in the policy status quo. The Obama budget takes aim at some of these subsidies, particular in the form of tax subsidies:

(US National Archives photo)

(US National Archives photo)

To foster the clean energy economy of the future and reduce our reliance on fossil fuels that contribute to climate change, the Administration proposes to repeal tax provisions that preferentially benefit fossil fuel production. Oil and gas subsidies are costly to the American taxpayer and do little to incentivize production or reduce energy prices. Removing these subsidies would reduce greenhouse gas emissions and generate $36.5 billion of additional revenue over the next 10 years, an amount that represents only a small percentage of domestic oil and gas revenues — about one percent over the coming decade.

The way the Obama freeze works, is that money saved from cutting things like this is supposed to be plowed into valuable education, health, anti-poverty, research, and infrastructure programs. And the question I’ve continued to have about the idea is what happens if (when?) it turns out that Congress actually loves subsidizing dirty energy production even more than it loves posturing about the deficit. Does Obama turn around and insist on offsetting cuts in education? Or do they really fight for these specific ideas?

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