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Put an End to Fossil Fuel Subsidies

Let’s end outdated policies that pollute our ocean

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© PhotoDisk Environmental Concerns

You probably know that climate change and plastic pollution are two of the biggest threats facing our ocean. But did you know that they share a common cause? Fossil fuels. Burning oil, coal and natural gas is the largest source of greenhouse gas emissions globally, responsible for 75% of global emissions. Plastics are also made from fossil fuels, which means that more fossil fuel extraction leads to more plastics that can pollute our ocean. When you see a plastic bag on the beach, you are also seeing oil and all of the pollution impacts associated with its extraction.

We can help reduce incentives to produce plastics that end up in the ocean by putting an end to fossil fuel subsidies. There’s a lot of momentum from the Biden-Harris administration to end giveaways for the fossil fuel industry which would go a long way towards protecting our ocean, but it is up to Congress to make this a reality.

A subsidy occurs when the government assumes some of the cost for an industry. For fossil fuels, these subsidies allow companies to pay less than their fair share in taxes or other fees and create special rules that reduce the true cost of oil and gas development and energy production. These subsidies are substantial. In 2020, fossil fuel companies claimed $8.2 billion from changes in tax laws that were part of the CARES Act pandemic relief bill. Additionally, experts estimate that the federal government provides around $15 billion every year in direct funding to the fossil fuel industry.

Fossil fuel subsidies are harming the ocean and creating disproportionate impacts on disadvantaged communities. A recent study shows that tax subsidies fueled the United States shale oil and gas boom, which not only drove huge growth in emissions of the super-potent greenhouse gas, methane, as well as health impacts in local communities. This also caused major growth in the production of plastics: access to inexpensive fossil fuels creates incentives to produce plastics that eventually find their way to our beaches and ocean.

This year, President Biden’s budget proposal included the elimination of some of the biggest tax breaks to the oil and gas industry. It would save American taxpayers up to $121 billion over ten years. It would also save our environment and ocean from further carbon and plastic pollution. The budget proposal targeted more than a dozen giveaways to the oil industry. Among the biggest giveaways are the Foreign Oil and Gas Income Exemption, which allows oil companies to avoid income taxes generated from refining, transportation and distribution of fossil fuels generated overseas and which would cost taxpayers $85 billion. Others, including the intangible drilling costs, percentage depletion and enhanced oil recovery credit, affect how oil companies count income and the value of assets; in total, they would cost taxpayers more than $25 billion.

Eliminating these and other subsidies will help ensure that oil and gas companies pay their fair share. Doing that will help clean energy compete and make it more expensive to produce new plastic.

Subsidies are especially wasteful when oil prices are high: high prices mean oil companies are already making big profits. Tax breaks for these companies won’t result in lower prices at the pump for consumers—just higher profits for those companies. The world is moving beyond fossil fuels, and America needs to lead the way by investing our taxpayer dollars in clean energy infrastructure instead of outdated, polluting industry.

It’s time to end fossil fuel subsidies and tip the scales in favor of our ocean.

Learn more about our solutions to plastics and the climate crisis.

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