Looking at the database, I only see litigation for biofuel.

Was there any WTO litigation made because of fossil fuel subsidies and if not why? Both the U.S. and China spend a lot of money on fossil fuel subsidies, which can lead to competitive advantages in world trade, was there any WTO litigation made against any country because of the fossil fuel subsidy? I tried to look for a list of litigation and couldn't find any instance where fossil fuel subsidies were the cause.


1 Answer 1


Because Fossil fuel subsidies are mostly a myth and litigation would be laughed out of court.

All those lists of there are XX billions of fossil fuel subsidies annually, are made by people who count every single normal corporate tax reduction strategy, if done by a fossil fuel company, as a subsidy.

If you look at the details, e.g. https://priceofoil.org/content/uploads/2017/10/OCI_US-Fossil-Fuel-Subs-2015-16_Final_Oct2017.pdf (the category by category breakdown starts on P24), you'll see how this is nonsense:

  • The US is one of the few countries that allows LIFO(Last In First Out) accounting for depreciation, which is advantageous for several types of business(used car dealerships and real estate developers are other big users, but no one says they are being subsidized). Every billion saved by going LIFO vs FIFO, is considered a subsidy.
  • The Domestic manufacturing subsidy becomes an oil subsidy when used by oil companies to manufacture drilling equipment domestically.
  • Ditto for R&D tax credits, if Apple uses them, it's spurring innovation, if Exxon does, it's a subsidy.
  • Deducting fines, settlements and cleanup costs for oil spills, if Fox, or BOA does it, that's business as usual, if BP does it, it's a subsidy.
  • Dual Capacity Taxpayer Deduction, deducting foreign taxes from income is fine for corporate America in general, but a subsidy if the income is fossil fuel related.
  • Share of cost of maintaining US waterways, because barges carry fossil fuels on them. Other users, like grain or wind turbine blades are not considered a subsidy.
  • Allowing same year of depreciation of the cost of drilling wells, instead of over the lifespan of the well, this is allowed for any expenses that have 0 future salvage value, oil just happens to have a lot of them.
  • The royalties for extraction on federal lands are too low compared to what a private landowner would have charged. Obviously, it's a non-market resource that all other users, like ranchers and loggers don't get charged the private rates for.

etc. etc. etc. There's 30+ more, but those are the big ones.

The actual subsidies are the "clean coal" boondoggle and fuel oil subsidies for low-income people (and the latter can be argued to be a poor people subsidy, not fossil fuel per se).

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