NewGeography.com blogs

Der Speigel reports that Germany's rushed program to convert to renewable energy is already imposing an economic burden. Part of the problem is the inherent instability of power produced by renewable sources such as wind and solar:

The problem is that wind and solar farms just don't deliver the same amount of continuous electricity compared with nuclear and gas-fired power plants. To match traditional energy sources, grid operators must be able to exactly predict how strong the wind will blow or the sun will shine.

A national energy expert said:

"In the long run, if we can't guarantee a stable grid, companies will leave (Germany). "As a center of industry, we can't afford that."

An important principle of the international impetus to reduce greenhouse gas emissions is that there be little or no economic loss. Certainly, an industrial powerhouse like Germany cannot subject itself to such risks.

At the same time, other locations would be similarly threatened by implementation of renewable power mandates whose "time has not yet come." Not only is there the potential to inflict economic harm on industry (and consumers through higher prices), but higher electricity prices would reduce discretionary incomes and could lead to greater poverty rates. The eradication of poverty has recently been declared to be a virtual prerequisite to sustainability at the Rio conference.

eradicating poverty should be given the highest priority, overriding all other concerns to achieve sustainable development.

Environmental sustainability requires economic sustainability. A litany of failures could do serious damage to GHG emission reduction efforts.

I had the pleasure of participating on Jerry Agar's program on Newstalk 1010 in Toronto, with host Tasha Kheiriddin on August 15. The subject was a new report by the David Suzuki Foundation lauding the benefits of Toronto's greenbelt greenhouse gas (GHG) emission reduction role as a carbon sink.

Ms. Kheiriddin was interested in the other side of the issue, which I was happy to summarize. First and foremost, for all of their claimed benefits, greenbelts around growing cities have serious consequences. They force population densities up, which makes traffic more congested. This is because as densities rise, traffic volumes increase. There are various estimates of the increase in traffic congestion from a doubling of density, from (for example) 61 percent (Sierra Club) to 96 percent (Ewing and Cervero). The greater congestion produces more intense local air pollution, with the predictable health effects. Beyond that, as any Economics 101 student should know, rationing anything (such as land) tends to be associated with higher prices. It is no wonder that house prices have skyrocketed since the greenbelt was established.

It is important to understand the dynamics of GHGs. It doesn't matter whether they occur in the Toronto greenbelt or Patagonia. This means that there is no reason for GHG reduction to emanate from the Toronto greenbelt. It would be far better to forest some of the 7.5 million acres of disused farmland in Ontario (since 1951). This is many times as much land as the Toronto greenbelt. In other words, from a global (or local GHG emission perspective), the Toronto greenbelt is irrelevant (Note).

The purpose of the city (metropolitan area) should be to facilitate higher discretionary incomes for its residents, while minimizing poverty, all within the constraints of sufficient environmental protection. The greenbelt reduces discretionary incomes by restricting mobility (more traffic congestion) and raising house prices. It increases poverty by raising costs and preventing job creation. The greenbelt's claimed GHG emission benefits can readily be replaced by strategies elsewhere that do not reduce economic growth.

Note: Large portions of the farmland in Ontario and Quebec have been taken out of production since 1951, as production has been transferred to the Prairie provinces (Alberta, Saskatchewan and Manitoba). Meanwhile, the real value of agricultural production in Canada increased 160 percent from 1961 to 2005.

The Reason Foundation has released our "Xpress West" (formerly "DesertXpress") analysis. This high speed rail train would run from Victorville (90 miles from downtown Los Angeles) to Las Vegas. Promoters predict high ridership and profits. They are seeking a subsidized federal loan of more than $5.5 billion, which is within the discretionary authority of the US Department of Transportation to fund.

Our analysis concludes the following:

1. There is serious question whether there is a market for Las Vegas travel that would require driving one-third of the way and transferring to the train. If there is no such market, as seems likely from the international experience, ridership could be as low as 97 percent below projections. The reality can be known only after the line is running.

The balance of the report is based upon the assumption that there is a market for driving to Victorville and boarding a train to Las Vegas.

2. The ridership and revenue projections (by URS Corporation) are based upon data that is more than 7 years old and predates the Great Financial Crisis. There have been significant downward demand trends in the travel market and Las Vegas tourist market since that time, especially in the share of the market from the Los Angeles Basin. It is inappropriate to use such old data in projecting system performance (Certainly no private company would rely on such old data in a due diligence analysis).

3. Even after adjusting the obsolete data (which our report does), the ridership projections are implausibly high --- at four times the Amtrak Acela ridership between Washington, Baltimore, Philadelphia and New York.

4. Over 24 years (the forecast period in the project document), we project that expenditures will exceed revenues by between $4 billion and $10 billion. This would mean that there would be insufficient revenues to pay the federal loan. This could result in a taxpayer loss approximately 10 times that of the Solyndra federal loan guarantee.

5. The free use by the private Xpress West project of the Interstate 15 median could preclude cost effective expansion of this roadway. Even assuming the implausible Xpress West assumptions about the diversion of drivers to the train, the overwhelming majority of growth in the corridor would be on the highway, not on the train. This includes not only the heavy truck traffic, but also car traffic.

Related: The Las Vegas Monorail

Wendell Cox was also author of  "Analysis of the Proposed Las Vegas LLC Monorail," which indicated that ridership and revenue projections were extremely optimistic and that the project was likely to fail  financially. Subsequently the project filed bankruptcy and defaulted on bonds. The actual ridership on the Monorail was within the range predicted in "Analysis of the proposed Las Vegas LLC Monorail," and far below the level forecast by project consultant URS Greiner Woodward Clyde.

Also see this letter from other consultants reviewing the project (Thomas A. Rubin, Jon Twichell Associates, Professor Bernard Malamud  and Wendell Cox).

The Las Vegas Monorail case is described in the Reason Foundation report.

With property values down 40% since 2006 in Chicago, the Chicago Democrat Machine has a new scam brewing. The Chicago Sun-Times reports:

Should Chicago use its sweeping condemnation powers to help stem the foreclosure epidemic — paving the way for underwater mortgages to be written down and repackaged under terms more affordable to struggling homeowners?

The City Council’s most powerful aldermen believes it’s a concept worth considering, which is why the Finance Committee chaired by Ald. Edward M. Burke (14th) will hold a joint committee hearing on the controversial idea on Tuesday.

If this passes, the potential for corruption will be unlimited in Chicago. Alderman Burke controls Chicago’s tax code. But, the conflicts are even more pronounced. Alderman Burke slates all the judges in Cook County which means a Burke-slated judge will hear the property seizure case. Even that’s not all; Alderman Burke's day job is running a property tax appeals tax firm. Being a client of Alderman Burke’s probably will be a good way to avoid a ‘takings’. Expecting a fair appeal, in court, on the seizure? Alderman Burke’s wife, Anne, is a justice on the Illinois Supreme Court. Expecting help from the Illinois state legislature to clamp down on Alderman Burke’s conflicted lifestyle? Alderman Burke’s brother, Daniel, is Assistant Majority Leader of the Illinois General Assembly.

In conclusion, you can be assured that seizing ‘underwater’ mortgages in Chicago will become a money maker for Alderman Burke. Nothing has left Alderman Burke’s attention in terms of making money off the taxpayers of Chicago. The Chicago Sun-Times has reported that Chicago Public Schools have a history of paying milk money to Alderman Burke. In Chicago, even if you have a checkered past you can still work with Alderman Burke as long as you pay tribute.

"We've probably spent in excess of $75 million in the past 30 years on image campaigns, and we keep coming back and saying, 'Well, that didn't work.'"

 - Former GHCVB CEO Jordy Tollett in the Houston Business Journal

A list of many of those can be found here, including the old standbys "Bayou City", "Space City", and "Energy Capital of the World" (Wikipedia has more here).  And despite many of my own previous attempts on this blog, inspiration has struck me again, especially after reading this recent article at Salon.com on why every city needs a brand (and more on that here).

A good city brand works on four different levels:

But it's very hard to come up with a single brand that does all four.  Even some of the most successful brands don't necessarily hit them all.  Two of the most famous city brands are New York's "I {heart} NY" and Las Vegas' "What happens in Vegas stays in Vegas."  And in Texas we're all familiar with "Keep Austin Weird."  In this case, I think I've stumbled upon something that can work across all four.

Before I reveal it, I need everybody to drop their cynicism shields.  I don't think the most successful city brand in history, "I {heart} NY" could get off the ground today with our snarky cynical culture.  Just like new songs, sometimes ideas need time to grow on you.  So open up your mind, hold back judgment, and let me  reveal some context-setting definitions and the brand first followed by the supporting reasons.

Hospitality 

Noun: The friendly and generous reception and entertainment of guests, visitors, or strangers.

Hospitable 

Adjective: 1) Friendly and welcoming to strangers or guests.  2) (of an environment) Pleasant and favorable for living in.

It started with me thinking of "Houston Hospitality", but then the symmetry jumped out at me it became

Houspitality

What the "Aloha Spirit" is to Hawaii, the "Houspitality Spirit" can be to Houston.

Here are some of the key words and phrases people often use when describing Houston and how they fit:

Some additional supporting reasons:

Finally, I'd like to end with some supportive excerpts from Ken Hoffman's recent excellent column on what Forbes got right and wrong about Houston being America's Coolest City.  I think you'll easily see the Houspitality Spirit running through them...

I remember thinking, am I going to have to change? Am I going to have to learn how to write Texan?
I didn't change anything. That's part of what makes Houston cool. You can come here and stay yourself and fit right in.
...
Houston is cool because whoever or whatever you are, you're welcome here. The first two years I lived here, I was burning out the copy machine at Kinko's applying for jobs anywhere else. Now I wouldn't leave here for anything. ...

Where better to get better?
When a congresswoman got her head half blown off, she came to Houston to get better. When Middle East oil sheiks need surgery, they come to Houston. We have the best medical facilities in the world. I didn't think that was cool until I was run over by a lunatic in a van and was taken to the hospital in an ambulance.
I still have no idea what hospital I was taken to. But they fixed me up. That was cool.
...
We're in this together
And please stop talking about Houston's "diversity." The only thing the word "diversity" does is separate people. Sure, we have ethnic neighborhoods; those are good for a city. It helps in picking a restaurant.
I've never seen a city where people blend more gracefully than Houston.
...
Houston is cool
I thought it was pretty cool when Houston welcomed Hurricane Katrina victims to ride out the storm's aftermath here. I spent a couple of days in the Astrodome, handing out supplies and clothes to Katrina refugees. I learned a lot about Houston after Katrina. The experience changed me, too.
...
Being cool is a city that makes you feel like you belong. 

This piece originally appeared at Houston Strategies.

An article in The Wall Street Journal discussed attempts to merge local governments in Michigan. While efforts such as these gain wide support because of the belief that they will save money, there evidence shows the opposite.

Government consolidations may seem to make all of the sense in the world academically. In practice, they cost more. There are no economies of scale in larger governments, except for spending interests. Voters have less influence in larger jurisdictions.

A simple look at the evidence, rather than the theory, indicates this. Our analysis in five states shows it, and the differences are stark. Lower per capita spending and taxation at the local general government level is associated with smaller units of government.

It is not therefore surprising that in Toronto, Hamilton and Ottawa there have been calls to "demerge" cities forcibly merged in the 1990s. In a debate in Toronto last October with a top transit official (a member of the left leaning National Democratic Party), we agreed on at least one thing --- that Toronto's amalgamation had been a mistake.

Nor is it surprising that despite huge electoral barriers erected by the Charest government, a number of municipalities voted to demerge from the forcibly enlarged ville de Montreal in the early 2000s.

For the most part, however, there is no going back. Mergers are forever. So are the higher taxes and higher spending.

My commentary in Canada's National Post  dealt with this issue on the 10th anniversary of the Toronto amalgamation.

Atlanta area voters said "no" to a proposed $7 billion transportation tax that was promoted as a solution to the metropolitan area's legendary traffic congestion, despite a campaign in which supporters outspent opponents by more than 500 to one.

With 99 percent of the precincts reporting, the Atlanta Journal Constitution reported that the measure lost 63% to 37%. This 26% margin of loss was nearly three times the margin shown in most recent poll by the Journal-Constitution. Proponents had claimed on the weekend that the measure was "dead even" three days before the election.

Proponents spent heavily on the campaign, with reports ranging up to $8.5 million in campaign donations, indicating a cost to contributors of more than $30 per vote. Opponents raised less than $15,000.

The tax issue failed in all 10 counties. The defeats were modest in Fulton County (the core county, which includes most of the city of Atlanta) and DeKalb County (which contains the rest of Atlanta). Huge "no" vote margins were recorded in the largest suburban counties. In Gwinnett County, the no votes prevailed by a margin of 71% to 29%. In adjacent Cobb County, the margin was 69% to 31%.

On election morning, the Atlanta-Journal Constitution featured opposing commentaries by regional planning agency (Atlanta Regional Commission) Chairman Tad Leithead and me. Chairman Leithead stressed the view that the tax would lead to reduced traffic congestion, job creation and economic development. My column stressed the view that the disproportionate spending on transit (53 percent of the money for one percent of the travel market) would not reduce traffic congestion.