Today, President Joe Biden will unveil a $2 trillion infrastructure plan that promises to overhaul the nation’s highways, airports, electrical grid, and more. It will be partly paid for by repealing subsidies for the fossil fuel industry.
Currently, the United States gives the $180 billion fossil fuel industry between $5 billion to $62 billion per year in direct subsidies, depending on the estimate. When accounting for indirect subsidies, including public health impacts and climate change, the handout could be as high as $649 billion. The Biden administration hasn’t specified which tax credits or subsidies it would eliminate, and certain subsidies probably will be subject to horse trading in Congress. That makes it difficult to get an accurate number at this point, but the number would certainly be in the range of billions of dollars.
If the Biden administration is successful, the US would be following through on a promise made at the 2009 G20 summit, which stated that signatories should “phase out and rationalize over the medium term inefficient fossil fuel subsidies.”