A half century of US federal government energy incentives: value, distribution, and policy implications

Abstract

This paper presents the most comprehensive estimates yet developed of US federal government energy subsidies and incentives over the past 50 years – $644 billion. It shows that the federal government has subsidised the energy industries – nuclear, coal, oil, natural gas, renewables – using different budget and off-budget funding techniques. It questions the common perception that federal energy subsidies in recent decades have favoured coal and nuclear energy at the expense of renewables. The authors conclude that federal subsidies and incentives can impact US energy and environmental policies for decades into the future, and that development of these policies must be informed by the findings reported here. In particular, there is an emerging consensus that expanded federal support for renewable energy is warranted. This support should be coupled with appropriate policies to ensure that, in the future, renewable technologies penetrate the market and make substantial contribution to the US energy mix.