Ecosystem Subsidies of Fossil Fuels

25 Pages Posted: 8 Apr 2008 Last revised: 25 May 2013

See all articles by David Hodas

David Hodas

Widener University - Delaware Law School

Date Written: April 1, 2007


Ecosystems provide the invaluable service of collecting and storing solar energy as fossil fuels (e.g., coal, petroleum, and natural gas). These concentrated forms of energy were gifted to us by the sun and collected and stored for our use by ancient ecosystem services. However, our legal and economic systems fail to recognize the value of this ecosystem service that is embedded in fossil fuels. As a result, society uses fossil fuels as though they were free and inexhaustible. This market failure means that fossil fuels are being consumed more quickly than they can be replenished, which in turn has affected the world's environment. This ecosystem services price subsidy had led to overuse and waste of the resource in the free market, which would not be occurring if the price of the fossil fuels included the cost of its manufacture by the world's ecosystems.

Ironically, almost none of the literature on ecosystem services, including some of the groundbreaking work of the late 1990s, considers fossil fuels in this context. Until we begin to understand stored energy as an ecosystem service, we cannot reasonably expect to manage our fossil fuel energy resources sustainably. Current international and domestic energy law and policy nearly completely ignores this feature of fossil fuel energy. The ultimate consequences of this disconnect are not just a matter of concern to energy policy, but are of the utmost significance to national security as well.

This Article proposes that it is necessary to value the ecosystem services that manufactured fossil fuels, and to find a legal mechanism to internalize that value into the marketplace, either as a cost on the fossil fuel resource or a subsidy on renewable energy alternatives that seek to collect solar energy and convert it into a usable form. The Article concludes by considering a legal decision-making model as an example of how to incorporate ecosystem service values into energy decision-making.

Keywords: fossil fuels, ecosystems, environmental law, energy, global warming, climate change

JEL Classification: K32, Q4

Suggested Citation

Hodas, David, Ecosystem Subsidies of Fossil Fuels (April 1, 2007). Journal of Land Use & Environmental Law, Vol. 22, No. 2, 2007; Widener Law School Legal Studies Research Paper No. 08-37. Available at SSRN:

David Hodas (Contact Author)

Widener University - Delaware Law School ( email )

4601 Concord Pike
Wilmington, DE 19803-0406
United States
302 477 2186 (Phone)

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