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1 Scott A. Hodge, IEA Study Ranks Nations' Subsidies to Fossil Fuel Consumption 1 (2010)

handle is hein.taxfoundation/ffcfcxz0001 and id is 1 raw text is: November22, 20100
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lEA Study Ranks Nations' Subsidies to
Fossil Fuel Consumption
US. Governments Offer Little Support to Energy Firms
By Scott Hodge
In advance of the G-20 meeting in Seoul, the International Energy Agency (lEA) released its
annual World Energy Outlook, a 738-page analysis of the global energy market. The report
discusses the market for various types of energy and summarizes the energy policies of the
world's governments, devoting two chapters to raising the alarm about government subsidies for
fossil fuel usage.
Just five months earlier the IEA had published in conjunction with OPEC, the OECD and the
World Bank a stand-alone study of governmental subsidies to energy in advance of the G-20
meeting in Toronto. That joint report found that no systematic effort has been undertaken within
the last decade to estimate subsidies to fossil-fuel production over a wide range of countries.2
In both reports, the IEA expresses its opposition to energy subsidies if they encourage the
production or consumption of fossil fuels, but the United States does not come in for criticism
because most nations subsidize fossil fuels far more than the U.S. does. Yet the Obama
Administration has devoted considerable effort in policy proposals and public relations to
eliminate not only the few subsidies that fossil fuel providers currently receive, but to withhold
from them the ordinary tax treatment of business expenditures that many corporate taxpayers
benefit from. Not that the federal government offers no energy subsidies, but the vast majority is
funneled to the producers and consumers of wind, solar and other forms of non-fossil-fuel energy.
How and Why Governments Subsidize Energy
Because tax policy is one way governments subsidize or punish energy production and
consumption, here we consider how U.S. tax policy stacks up versus the rest of the world in this
increasingly important area.
'International Energy Agency, World Energy Outlook, November 2010.
2 International Energy Agency, Organization of Petroleum Exporting Countries, the Organization for Economic
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Cooperation and Development, and the World Bank, Analysis of the Scope of Energy Subsidies and Suggestions for
the G-20 Initiative, June 16, 2010, http://www.worldenergyoutlook.org/docs/G20_Subsidy Joint Report.pdf.
Scott Hodge is the president of the Tax Foundation.

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