Energy subsidies total $24 billion, most to renewables
The federal government spent $24 billion on energy subsidies in 2011, with the vast majority going to renewable energy sources, according to a government report. Renewable energy and energy efficiency accounted for $16 billion of the federal support, according to the Congressional Budget Office, while the fossil-fuel industry received $2.5 billion in tax breaks.
This is a stark change from a decade ago. The CBO noted that until 2008, most energy subsidies went to the fossil-fuel industry. The idea at the time was to encourage more domestic oil production, especially when the price of oil was low.
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The report said some type of tax on dirtier fuels like oil or coal would be a better way to discourage certain energy sources and promote others. Most economists agree, but it's a difficult sell politically. Few politicians have advocated increasing the gasoline tax, especially in an election year and with gas prices already near record highs.
The report said government support for basic energy R&D is a better investment, as businesses are reluctant to make bets on long-shot technologies but the pay-off for society when one pans out can be significant.
http://money.cnn.com/2012/03/07/news/economy/energy-subsidies/index.htm