At $50 a barrel, the low price of crude oil has slowed some of the oil production in the US, especially in regions that are costly to develop, like the Arctic. But US oil producers aren’t bearing the whole brunt of low prices, because federal and state governments provide tax breaks that stimulate oil production despite low prices. The tax situation isn’t unique to the US—China, the EU, and India also offer a variety of flavors of tax breaks to fossil fuel producers, despite their recognition of the need to address climate change. Although the US has signaled its intent to withdraw from the Paris Agreement, tax breaks that fund more fossil fuel production don’t help the rest of the globe to limit warming to 2 degrees Celsius. The latest research offers some hard numbers on just how much tax policy is supporting extra CO2 emissions. “Federal tax subsidies to the oil and gas industry alone cost US taxpayers at least US$2 billion each year,” write researchers from the Stockholm Environment Institute and Earth Track in a recent Nature Energy article.
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Written by Megan Geuss at Ars Technica