Fossil fuels receive more subsidies than renewable energy.

Context#

Climate activists frequently cite an IMF figure claiming fossil fuels receive "$7 trillion in subsidies." This number is deeply misleading and designed to generate headlines rather than inform policy.

Evidence#

The $7 Trillion Myth

• The IMF's headline number includes $5.7 trillion in "implicit subsidies"
• These aren't actual government spending—they're theoretical "externality costs"
• They include debatable estimates of climate damage, health costs, etc.
• No government actually spends this money

What Countries Actually Spend

Direct fossil fuel subsidies: ~$1.3 trillion globally

• The vast majority (~80%) are consumer subsidies in developing countries
• These keep fuel affordable for poor families
• Eliminating them would hurt the world's poorest people
• Only ~$100 billion goes to producers in developed countries

Renewable energy subsidies: ~$500 billion

• But renewables produce far less energy
• Per unit of energy, renewables receive 5-10x more subsidies
• Solar and wind depend on subsidies to be competitive
• Without subsidies, renewables couldn't compete on price

The Apples-to-Oranges Problem

• Fossil fuels provide 80% of world energy, renewables ~15%
• Comparing total subsidies ignores this massive scale difference
• Subsidy-per-kilowatt-hour: renewables far exceed fossil fuels
• Oil & gas industry pays hundreds of billions in taxes annually

U.S. Subsidies: The Real Numbers

• Renewable energy: $15.6 billion (2022)
• Fossil fuels: $4.6 billion (2022)
• Oil & gas pays $138 billion/year in federal & state taxes
• Industry is a massive net contributor to government revenue

Analysis#

This claim is mostly false because it relies on misleading statistics. The headline "$7 trillion" figure counts theoretical externality costs as "subsidies"—a definition no economist would apply to actual government spending.

When comparing actual government support, the picture reverses: renewables receive far more subsidy per unit of energy produced. And most fossil fuel "subsidies" are programs helping poor families afford energy—hardly the corporate giveaways activists imply.

The oil and gas industry is a net tax contributor, not a net subsidy recipient. This claim is designed to mislead, not inform.