If the AP can publish this and any of us read it without consternation, we really have jumped the shark on setting impossibly low standards of the leader of the free world.
The big issue on Tuesday’s agenda was climate change; it was certain to be a major topic when Bush meets one-on-one with Merkel, one of the G-8’s strongest advocates for tough reductions in the emissions that contribute to global warming.
She succeeded in winning his backing last year, when the summit was held in Germany, to a statement pledging that the group would seriously consider a goal of halving greenhouse-gas emissions by 2050 — while failing to persuade him to commit to more specific targets.
Now, as then, Bush is insisting that major emerging economies like China and India be included in any plan to cut emissions. But they have so far resisted. Adding to Bush’s isolation on the issue, European Commission President Jose Manuel Barroso said G-8 nations must reach agreement among themselves and avoid taking the approach that “I will do nothing unless you do it first,” which he called a “vicious circle.”
Still, Bush has come a long way since his first G-8 summit when he held that evidence was not conclusive that man’s activity contributed to the warming of the Earth’s climate.
Have we all really lowered our standards so far that it’s considered progress when Bush finally acknowledges that climate change is real, all while his administration continues to stall and block any attempts to actually address it?
So, what do you do when you’re going nowhere? Millions of would-be vacationers are asking themselves this very question as the steep rise in gasoline prices and household staples is forcing them to forgo travel vacations.
And now there’s even a term the media has come up with to capture this phenomenon… one they can prattle on endlessly about: the staycation. But behind the cutesy play on language is the beginning of a very real shift—one that promises to have some serious implications for both the economy and how Americans will (or won’t) spend their leisure time.
What People Are Doing
Across the country, news and television media stories tell the tale of three trends: people staying home for their family vacations, families cutting back on other vacation expenses in order to afford the travel costs or, often because of other financial pressures, families forgoing their vacations altogether.
On this Fourth of July holiday weekend, nearly a million people who traveled last year are staying home. And campgrounds all over the country are reporting larger numbers of visitors. According to a recent CNN poll, 1/3 of Americans have canceled or shortened their holiday vacation plans because of gas prices. “72 percent said record gas prices have caused them to make changes in their daily lives, and 30 percent said those changes were major ones.”
The U.S. Department of Transportation reported last month that Americans drove 1.4 billion fewer highway miles in April 2008 than the previous April, a decline of 1.8 percent. After six straight months of reduced driving, we’re talking about 20 billion or so fewer highway miles driven in the States. At less than 2 percent reduction, that says more about how much Americans actually drive than how much their behavior has changed as a result of record high gas prices.
But consider just a few of the ripple effects on the economy and a 2 percent reduction doesn’t seem all that small. For instance, the loss of government receipts from the $0.31/mile gasoline tax. Half way through 2008, Americans have driven 20 billion fewer miles than last year. That equates to about $167,000,000 less in federal tax dollars. (Let’s ignore for a second the question of whether or not the government would make good use of that money.)
Impacts on the Economy
World tourism is arguably the largest service sector in the global economy. In 2007, tourism accounted for nearly 900 million international arrivals alone. In 2008, world tourism is expected to generate close to eight trillion dollars. International tourism is the U.S.’s largest service export—accounting for more than a quarter of service-industry exports and eight percent of exports all together.
And these numbers don’t account for domestic tourism, which are much harder to calculate.
Not surprisingly, industry groups are either in complete denial about the prospects for dramatic reductions in travel and tourism or just trying to paint a rosy picture.
Overall, the new TSA results reveal a moderate impact on the Travel & Tourism industry as a result of the global economic downturn, with its annual growth rate experiencing a slowdown in 2008, to 3%, in comparison to 3.9% in 2007.
Looking past this present cyclical downturn, the long-term forecasts point to a mature but steady phase of growth for world Travel & Tourism between 2009 and 2018, averaging a growth rate of 4.4% per annum, supporting 297 million jobs and 10.5% of global GDP by 2018.
WTTC President Jean-Claude Baumgarten explained “Challenges come from the US slowdown and the weak dollar, higher fuel costs and concerns about climate change. However, the continued strong expansion in emerging countries - both as tourism destinations and as an increasing source of international visitors - means that the industry’s prospects remain bright into the medium term.” (Source)
In either case, once you see the writing on the wall, it’s hard to take statements like those of the World Travel & Tourism Council seriously. And yet the impacts are very serious, indeed. Across the globe, governments are beginning to worry about the economic impacts of tourism.
Just this week, Caribbean leaders met to discuss the impacts of soaring oil prices on tourism, their core industry. In Australia, the Managing Director the Australian Tourism Export Council (ATEC), urged government assistance.
He said the federal government needed to give financial incentives for Australians to holiday in Australia in the next school holidays to help the industry recover.
“It’s got to happen or there are going to be thousands of small businesses across Australia who are going to go broke, they’re on their knees at the moment,” Australian Associated Press quoted Hingerty as saying.
He said high fuel prices had damaged tourism the same way the drought had hit the farming sector.
The pain will be felt most acutely in communities that depend on tourism as a staple of their local economy. In Post Carbon Institute’s little corner of the world, for example, tourism accounts for $1 billion annually—serving as a central component of Sonoma County’s workforce and revenue. Each year, the $23 million in tax receipts from visitors provides helps local governments fund much needed social services.
So how are communities responding?
It’s early days yet, but some communities have shifted their focus to promote local attractions to those living nearby. Though I have to give the City of Burlington, North Carolina points for creativity, I doubt this strategy will be enough. Perhaps if high oil prices only impacted travel expenses, a shift to promote local tourism might work. But the truth is that vacation travel is only the tip of the proverbial iceberg.
One has to wonder how far down from its perch as the world’s largest service sector the tourism industry will fall.
The White House in December refused to accept the Environmental Protection Agency’s conclusion that greenhouse gases are pollutants that must be controlled, telling agency officials that an e-mail message containing the document would not be opened, senior E.P.A. officials said last week.
I guess this could be called a positive feedback loop…
Floodwaters loaded with farm runoff are heading down the Mississippi River, and scientists fear the deluge will dramatically increase this summer’s dead zone in the Gulf of Mexico, covering an area the size of Maryland. …
Oxygen in the dead zone is depleted by excess nutrients, mostly nitrates from farm fertilizer runoff, that cause algae blooms. After the algae dies, bacteria on the bottom feast on the remains, removing crucial oxygen from the water.
The dead zone in the gulf forms in early summer and lasts through early fall.
This year’s massive floods will bring a heavier load of fertilizer into the gulf, DiMarco said.
Since the summer solstice is now upon us, in this month’s Relocalize, Post Carbon Institute thought to take a quick look at the solar landscape. Where do things stand with new technologies? What resources exist to help defray costs? Does solar work for everyone? Where can people get started?
Now, just two weeks ago, I might have struck a more optimistic chord. But then I was reminded that, in Washington, D.C., political grandstanding continues to take on more urgency than concerns over energy security, climate change or the economy.
On June 10th, opponents successfully blocked a vote on HR 6049 (The Renewable Energy and Job Creation Act of 2008), which would have extended the solar tax credit, due to expire at the end of the year, until 2014. (I won’t even bother to mention the other incentives included in the bill, including those for wind, geothermal, biomass and other promising renewable technologies.)
What’s the big deal?
The ITC (investment tax credit) for solar not only serves as a major incentive for households to buy solar panels (up to $2,000 credit per residence), it plays a key role in business and government investment in photovoltaic systems (30% tax-break for businesses purchasing solar). It’s estimated that 75% of non-residential solar installations are commercial power purchase agreements that rely on the federal tax credit.
Solar providers are warning of dire consequences to their business with the loss of this subsidy:
“Arizona Public Service Co., for instance, has proposed what would be one of the largest solar-power plants in the world, capable of serving 70,000 homes or more. But utility executives have made it clear that they will kill the plans for the Solana Generating Station if the tax credit isn’t extended past its Dec. 31 expiration date.” Source
The CEO of SunPower, one of the largest solar providers in the U.S., threatened to leave the U.S. market should the tax credit not be extended. “If the ITC doesn’t happen, we can move our business elsewhere and make up for that. Is that a preferred solution? No. Does America lose jobs with that? Yes. But can we as a company hit ‘08 and ‘09 without the ITC? Yes.” Source
In California, Pacific, Gas & Electric’s planned 550 megawatt solar thermal plant in the Mojave Desert will likely be shelved without the tax credit: “With no ITC there will be no project,” said Avi Brenmiller, CEO of Solel, the company tasked with building the plant. Source
And it’s not just commercial solar projects that will be affected. While $2,000 may not seem like a lot when a typical residential system can cost tens of thousands, for many households like my own-with low usage or little capital-the solar tax credit can mean all the difference in the world. (Visit here to read about my own experience and to find related resources.
How? The ITC has been critical to the expansion of a number of creative financing programs that seek to attract the vast majority of residential home owners who can’t afford to purchase a new photovoltaic system outright:
SolarCity recently announced a program that would cut the average consumer’s upfront cost from $25,000 to $2,000.
SunRun effectively leases (with some upfront costs) their panels through power purchase agreements that provide consumers with a fixed rate (13.5 cents/kWh) for 20 years.
These are just a couple of examples of what’s been a rapidly evolving industry.
While a number of local municipalities are providing their own, tax-based incentives to spur adoption of solar (in my neck of the woods, for example, the City of Berkeley is financing the cost of solar panels for homeowners who agree to pay back for the system over 20 years through their property taxes), it’s not merely government programs that would be hard hit by the loss of the solar tax credit. The examples cited above are for-profit enterprises.
Now, a common argument made by opponents of HR 6049 and other attempts to extend the ITC is that the government shouldn’t be raising taxes to pay for the credits. This argument, frankly, is a canard. Previous attempts would have paid for the credits by rescinding tax breaks given to oil companies (which together made $36 billion in profit in just three months this year, twice as much as the entire credit package) back in 2005.
HR 6049 would offset the credits by closing tax loopholes for those, like hedge fund managers, who work for certain offshore corporations and delays providing a tax benefit to multinational corporations operating overseas.
So this is not about a tax increase, it’s about how we and to whom we choose to extend tax breaks. And what do most Americans think? A recent poll found that:
nearly three-quarters of Republicans (72 percent), Democrats (72 percent) and Independents (74 percent) favor an extension of the federal investment tax credits (ITC) as a way to encourage development of solar power and fund continued development of the technology. In contrast, only 8 percent of Americans believe the ITC should not be extended.
Another argument is that the government should allow the market to drive itself, conveniently forgetting the role that federal subsidies and research & development have long played in the development of the fossil fuel industry. Even in 2007, more than twice as much money was spent by the federal government on R & D for coal than solar.
I won’t bother to mention other tax expenditures, but if you want to put federal investment in solar development into some context, take a gander here (warning for those with a sticky mouse, carpal tunnel syndrome or a queasy stomach).
Word has it that Senate leaders plan to reintroduce the bill this week on the floor. Who knows, perhaps by the time you read this, the sun will be shining again on the solar tax credit. In the meantime, if you want to share your thoughts about the Investment Tax Credit you can:
Contact your elected official(s). You can find and contact your Representative here and Senator here.
Write a letter to the editor. The Vote Solar Initiative helps you find your nearest newspaper and even provides some talking points for those who wish to support the solar tax credit.
Looks like the peak oil moment may be upon us. And while recent weeks has seen an endless chain of talking heads spouting theories of market speculators being the driving force behind the rapid and steep increase in oil prices, people might finally start to see the writing on the wall.
[U.S. energy secretary] Samuel Bodman, attending two days of meetings in northern Japan among energy chiefs from Group of Eight industrialized countries and other top economies, said the surge in world oil prices was largely a simple problem of supply and demand.
Production has stalled since 2005 at 85 million barrels a day, while economic growth — particularly in China and India — has pushed demand ever higher, Bodman said before a meeting of ministers from the U.S., Japan, South Korea, India and China.
“We’re in a difficult position where we have a lid on production and we have increasing demand in the world,” he told a small group of reporters, dismissing the effects of speculation and unclear inventory levels and other factors on oil prices.
…
Oil prices made their biggest single-day surge on Friday, soaring $11 to $138.54 on the New York Mercantile Exchange, an 8 percent increase. That followed a $5.50 increase the day before, taking oil futures more than 13 percent higher in just two days.
…
Bodman said he would likely urge China and other countries at the Japan meeting to slash fuel subsidies, which make gasoline cheaper for consumers — thereby giving them no reason to reduce consumption and allow prices to level off or drop. The International Energy Agency has estimated that oil subsidies in China, India and the Middle East in 2007 totaled some $55 billion.
At the same time, he urged nations to pay heed to an IEA report that the world needs $22 trillion investment in energy supply infrastructure by 2030 to meet rising demand, while developing alternative energy sources.
Um, ok. So our energy secretary is putting pressure on foreign governments to reduce subsidies. Meanwhile this administration and their lackeys in Congress are blocking every effort to shift government investment and tax breaks from the fossil fuel industry to renewables? That’s rich.
Senate Republicans on Friday blocked a global warming bill that would have required major reductions in greenhouse gases, after a bitter debate over its economic costs and whether it would substantially raise gasoline and other energy prices.
Democratic leaders fell a dozen votes short of getting the 60 needed to end a Republican filibuster on the measure and bring the bill up for a vote. The 48-36 vote failed to reach even a majority, a disappointment to the bill’s supporters
Majority Leader Harry Reid was expected to pull the legislation, in all likelihood pushing the congressional debate over climate change to next year with a new Congress and a new president.
Yes, because we can really afford to wait, to pass a bill that’s not close to being aggressive enough as it is.
Instead of building a bridge to nowhere in Alaska, maybe Congress could should fund a monument in the Mall in D.C. honoring the fearless leaders in Congress and the White House who obstinately and resolutely blocked any action to address the biggest global calamity we’ve ever faced.
In this month’s Relocalize, Post Carbon Institute is turning an eye to transportation—specifically new and old ways to use or replace the good ol’ automobile. And we’re not the only ones. Millions of Americans are now paying over $4 per gallon for the first time.
Every single day, $1.34 billion is spent fueling Americans’ driving habits. In April, American drivers spent more than $37 billion on gasoline—the most in U.S. history. That’s more than a 7% increase over the previous month and 21% over April 2007. And we haven’t hit the peak travel season yet, when prices tend to be highest.
Granted, gas prices in the U.S. are still relatively low, compared to places like Scotland where prices reached $8.30 a gallon and shortages have taken place. But people are paying attention. The downturn in the economy and skyrocketing food and fuel expenses have led to fewer sales of new cars and trucks—particularly SUVs and other gas guzzlers.
In the midst of a heated primary contest, it’s not surprising that the presidential candidates have jumped into the fray, with debates, campaign ads and countless news pieces furiously promoting or deriding the validity of a “gas tax holiday.” First Republican nominee, John McCain, and then Democratic candidate, Hillary Clinton, came out in favor of a plan to suspend the 18.4 cent federal gas tax and 24.4 cent diesel tax during the summer months. Democratic candidate Barrack Obama stands opposed.
We’ll leave it to you to decide if this plan makes any sense. But here are some quick facts to consider. Should Congress pass this “gas tax holiday,” it’s estimated that:
The federal government would lose about $9 billion in tax revenue.
When the State of Illinois suspended its 5% sales tax on gasoline in 2001, gas prices fell only 3% while costing the state $175 million in revenue. So where did the rest of the money go?
Over 280 economists from across political party affiliations have signed an open statement opposing the gas tax holiday on economic grounds, including several Nobel Prize winners.
In the meantime, the average savings per driver over the three months comes out to about $28 or about 26 cents a day.
Though editorial boards and economists of all stripes have come out against the “gas tax holiday” as either fiscally unsound or at best a band-aid for very serious energy issues, scant attention has been paid to some of the more obvious, effective and meaningful ways to reduce the pinch at the pump.
Let’s start with the obvious: driving less. Now, before I get painted as impractical, let’s just consider two relatively benign ways to reduce fuel costs more than the suspension of the federal gas tax:
Combine errands. Driving just ten less miles a week will save you more money than the “holiday” ($1.64 vs. $1.29).
Carpool once a week. The average commute in the U.S. is 27 miles a day. So, driving just one fewer day every two weeks will also save you more money ($2.22 a week).
Next, more effective. Again, since the federal gas tax is only about five percent of the cost of the average gallon of gasoline, it’s not hard to come up with solutions that are as or more effective (not to mention, way way cheaper). Here are just a few:
Drive smarter. Keeping to the speed limit, avoiding quick starts and stops would save the average driver as much as $260 a year, or nearly $10 a week.
Keep your tires properly inflated. This would increase the average car’s fuel efficiency by about 3% or $1.39 a week.
Change your air filter every six months or 10,000 miles will increase your fuel efficiency by about 10%. Even after you factor in the cost of a new filter, you’ll still save more money than from any “gas tax holiday.”
The point I’m trying to drive home is not that these alternatives will solve the oil problem. In fact, only one thing will do that: getting off oil. Rather, the point is simply this: Since there are so many simpler and more cost effective things that people can do themselves to reduce the cost at the pump, can we please, please elevate our national discourse to meaningful policies and solutions that are worthy of the energy crisis we face?
I haven’t posted on this blog in quite some time because, well, I’ve been inordinately busy. Back in March, I accepted a position with the Post Carbon Institute, managing their Relocalization Network. It was with mixed feelings that I shifted my attention: Having come so far in developing the concept of Climate Champions and ultimately Climate Relay, I was loathe not to continue investing my full attention to bringing it to life.
But working with Post Carbon was a rare and great opportunity. Even before I understood the true scope of the “peak everything” crisis, I was deeply attracted to the organization’s vision for relocalization because I saw that in this framework offered a solution to a number of critical issues: climate change, social and economic justice, healthy individuals and communities, energy independence, national and energy security, environmental stewardship, etc. The Relocalization Network supports communities to (re)develop local production of food, energy and goods.
In any case, part of the reason why I’ve laid low on this blog and with my family and friends since I’ve joined Post Carbon is because, well, climate change is depressing enough. When you add peak oil to the equation, it’s hard not to find the nearest sand pit in which to bury your head. (BTW, my son has a very nice sandbox in our back yard, if you ever need one.)
That said, I wanted to share this one little tidbit, just to illustrate how immensely fortunate we in the developed world have been in the last century+ as a result of cheap energy.
The huge distortions imposed on the modern industrial nations by the flood of cheap abundant energy that washed over them in the 20th century can be measured readily enough by a simple statistic. In America today, our current energy use works out to around 1000 megajoules per capita, or the rough equivalent of 100 human laborers working 24-hour days for each man, woman, and child in the country. The total direct cost for all this energy came to around $500 billion a year in 2005, the last year for which I was able to find statistics, or about $1667 per person per year.
Now consider how much it would cost to hire human laborers to perform the same amount of work. At the current federal minimum wage of $5.75 an hour, hiring 100 workers in three shifts to provide the equivalent amount of energy would cost each American $512,811 a year, or about 308 times as much as the energy costs – and this doesn’t count payroll taxes, health insurance, paid vacations and the like. Mind you, it would also require the US to find food, housing, and basic services for an additional workforce of 30 billion people, but we can let the metaphor go before tackling issues on that scale.
(Hat tip to D. Parkinson for sharing this through the Relocalization Network.)
Those born after WWII in particular have absolutely no sense of how radically transformative this cheap, accessible energy has been to our society. We almost take it for granted in the same way we do breathing: Not worth noting except when we suddenly lose it (like a power outage or rolling blackouts) or we labor to catch it (like filling up your tank with $4/gallon gas).
Many of us are now coming to see oil and other fossil fuels as an evil because of the environmental crises their use have created. That’s all well and good, not to mention true. Very true. But what I, and I think many others, have failed to recognize is how much we’ve benefited from them. Even as they’ve gouged our earth, muddied our air, and played havoc with our climate, these hydrocarbons have come like oxygen and nutrients pumping from the umbilical cord of the earth (okay… weird metaphor).
The real question now, in some ways, is have we choked ourselves on it?
The Sonoma County Press Democrat has an article about the real impact of federal subsidies for solar on local businesses and residences. Specifically, how the failure of Congress to renew the tax credit is halting new installations.
A divided Congress has not extended a federal tax credit that has cut costs for thousands of solar energy systems across California.
Although the tax credit won’t expire until the end of the year, its looming demise is already having an impact, according to local solar installers…
The solar credit would be extended six years for residential projects and eight years for businesses under legislation supporting a variety of renewable energy sources working its way through Congress. Two measures have been defeated in the past three months. Critics — including President Bush — are opposed, in part, because the credit would be funded by repealing tax subsidies for oil companies.
