Data Sources: (1) U.S. EPA. U.S. Greenhouse Gas Inventory. https://cfpub.epa.gov/ghgdata/inventoryexplorer/#iallsectors/allsectors/allgas/inventsect/all; (2) The World Bank. N.d. "GDP (current US$) - United States." Available at: https://data.worldbank.org/indicator/NY.GDP.MKTP.CD? locations=US; (3) The World Bank. N.d. "Oil rents (% of GDP) - United States." Available at: https://data.worldbank.org/indicator/NY.GDP.PETR.RT.ZS? locations=US; (4) The World Bank. N.d. "Natural gas rents (% of GDP) - United States." Available at: https://data.worldbank.org/indicator/NY.GDP.NGAS.RT.ZS? locations=US; (5) The World Bank. N.d. "Coal rents (% of GDP) - United States." Available at: https://data.worldbank.org/indicator/NY.GDP.COAL.RT.ZS?locations=US. (6) The World Bank. N.d. "Inflation, GDP deflator (annual %)." Available at: https://data.worldbank.org/indicator/NY.GDP.DEFL.KD.ZG.
Over the past 30 years, the total societal costs of annual emissions—based on a social cost of carbon of (inflation-adjusted) $51 per metric ton of carbon dioxide emissions—from the U.S. economy have remained relatively steady, between $250 and $300 billion per year. In contrast, U.S. coal, oil, and gas industry profits have experienced substantial ebb and flow over the same period, ranging from a high of $335 billion in 2008 to a low of approximately $33 billion in 2015. Despite fluctuations in industry profits, for every year except 2008, annual societal costs exceeded annual industry profits, indicating a disconnect between fossil fuel companies’ market performance and the societal costs inflicted by their activities.
To reinforce this point, the cumulative value of societal costs (the total area under the red line in the above figure) is more than double the magnitude of the cumulative industry profits (the total area under the black line): Across the last 30 years, cumulative societal costs of U.S. emissions have amounted to $8.4 trillion while cumulative U.S. fossil fuel industry profits add up to $4.1 trillion.
According to House Committee on Oversight and Reform Chairwoman Carolyn B. Maloney, fossil fuel corporations continue to profit—bolstered by U.S. government subsidies and tax credits that amounted to roughly $662 billion in 2020 alone—while actively lying to the public about their stated commitments to addressing the climate damages their own activities have caused.
Despite the fossil fuel industry’s financial dependency on public dollars, the public cost of the industry far exceeds its profitability.
Sachin Peddada
Assistant Researcher
Elisabeth Seliga
Assistant Researcher
This is a part of the AEC Blog series