June 2008


I don’t usually like spruiking for the corporate media, but channel 7 is doing something good with their Sunrise solar panel petition. I don’t make any comment on the rest of what channel 7 does – I usually avoid it like the plague.

But they’re right, a means test on the solar rebate scheme is bloody stupid. There are lots of people out there who want solar panels, but for the rebate, you have to have the money upfront. Not many people on a median wage (~$25,000/annum) have thousands of dollars just lying around. If they have a mortgage, neither do people on an average wage (~$57,000/annum). So means testing the rebate has already meant a massive drop in household solar installations(1).

But a means test could be a good thing. If the government wants to do something that has a real impact, and is actually equitable for people of all socio-economic classes, it should means test. But don’t means test down, means test up. For the rich, leave it as it is, or perhaps leave it at $8000 for households on $100k/annum or what ever other arbitrary measure you want, and reduce it in small increments as wages go up. For everyone else, offer an increasing rebate as wages go down, and a low-interest (0%, inflation adjusted) loan>here was a loan something like this in the budget this year (not sure how “low interest”), but only for solar hot-water, and only for a couple of hundred thousand homes(2). Expand this to include all homes and photovoltaics, and by all means means-test the loan.

A good idea might be to cap the loan at a calculated value – say enough to buy a system that could power a small family house – and then offer normal, or slightly lower than normal interest rates for any money needed over that cap. That would allow even mcmansions to go solar, but without encouraging excess energy consumption.

Obviously this solution wouldn’t be perfect, but it would sure be better than what’s currently on offer. The main thing at this stage is to wean ourselves off fossil fuels at quickly as possible. And that means spending big now – it won’t seem like much of a cost later, especially when it pays itself off in a few years anyway.

  1. Rethink solar rebate, industry urges Govt. (2008, May 17).ABC News. Retrieved June 30, 2008, from http://www.abc.net.au/news/stories/2008/05/17/2247721.htm.
  2. Simon, D. (2008, May 14). “Green” budget passed and pasted in Australia. Retrieved June 30, 2008, from http://de.indymedia.org/2008/05/217318.shtml.
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After months of wondering why Americans are always complaining about petrol prices, I finally figured out why.

This might seem obvious to some, but the solution everyone seems to come up with seems pretty stupid to me. To start with, let’s compare fuel prices in a few countries (unleaded fuel, at the bowser):

  • US fuel price: around $4/gallon (1)
  • Australia: about $1.65/L
  • UK: about £1.18/L (2)
  • France: about €1.40/L (3)

Just to compare, let’s change that to US$/Litre (1 US gallon  = 3.7 litres, Exchange rates from http://www.xe.com/ucc/):

  • US: $1.08/L
  • Aus: $1.57/L
  • UK: $2.32/L
  • Fr: $2.19/L

Of course, these calculations could be off a fair bit, but with a difference like that, the error couldn’t be very sginificant.

From that, you can see why I was confused: Americans have some of the cheapest fuel in the industrialised world. It certainly isn’t anything to scream about. In fact, with peak oil almost certainly hitting around now (The actual centre of the peak being somewhere between a couple of years ago, to perhaps a few years ahead), it more like something to just get used to. It certainly isn’t going to get cheaper for any significant period of time.

But then I realised that there was another factor: Wages. If americans are earning less than us here in Aus, then the fuel is obviously costing them relatively more. So let’s see average weekly wages for the four countries:

  • US: $600.80 (4)
  • Aus: $1008.10 (5)
  • UK: About £460 (from average yearly estimate wage of $24000)
  • Fr: ???

And compared to fuel costs:

country fuel cost
(100L)
weekly wage 100L as % of
weekly wage
USA $108 $600.80 18%
Australia $165 $1008.10 16%
United Kingdom £118 £460 25%

Which is obviously the reason why americans currently care more about fuel than australians. This is obviously going to be compounded by wage inequality – the average wage is a pretty stupid measure of income, because the richest few people make the average wage higher than the vast majority will ever earn. Looking at a median wage is a far better way to do it, and if that was done, and considering that america seems to have worst income inequality than most industrialised nations, that percentage, compared to australia would be much higher than it is above, both absolutely, and relative to the other countries.

But what about the UK? Why aren’t they going nuts about fuel prices? Even if their income inequality is far less that the US, they probably still have a higher fuel price compared to wages. The answer is obvious: they spend less money on fuel because they buy less fuel. There are two reasons for this: the UK is a more compact country than the US – people don’t need to drive as far when they do drive. But more importantly, both for its impact, and for its potential for change, is public transport. Most of the US, by all accounts, has a terrible, or even non-existant public transport service. New York has the metro, and San Francisco has it’s trams, but most other cities are designed almost exclusively for cars – in some it’s hard to even walk any where. When you’re forced to drive a car to get to work, school, or anywhere else, you’re going to feel the fuel crunch pretty hard.

Americans do have a fuel problem, but calling for lower prices isn’t going to help in the long run. Peak oil means that fuel prices are on a roughly exponentially increasing path – even if we knock 20 cents off now, it’ll only be a matter of months, a couple of years at the most, before it’s back where it was again. If you want a solution to fuel prices, then call for a decent minimum wage (the american minimum wage is far less than the australian minimum wage, and was even when the australian dollar was at US$0.55 a few years ago. Now it’s well under half). If you want to do something permanent about making transport cheaper, then call for real public transport systems, especially electricity driven public trasnport, like trains, trams, and street cars. That’s going to be just about your only livable way out of this mess.

Sources:

  1. http://tonto.eia.doe.gov/oog/info/gdu/gasdiesel.asp
  2. http://www.petrolprices.com/
  3. http://www.prix-carburants.gouv.fr
  4. http://www.bls.gov/news.release/empsit.nr0.htm
  5. http://www.smh.com.au/articles/2005/08/18/1123958181797.html

I just read “A Short History of Progress”, by Ronald Wright(1). Pretty gloomy, if you need any impetus to become either an activist, or completely depressed, this is it. Wright maps the rise an fall of numerous civilisations, and points out that our current technological and social trajectories are pretty similar really. The only real difference between us and the romans, outside of size of the supporting ecosystem, is that we’ve got evidence of collapse happening before. Well worth reading, especially if you know one of those people who irrationally believe that technology will save us. Now all I need is something to pick me back up.

Where’s Wallace Hartley when you need him? Oh, that reminds me – Chumbawamba have a new album out.

1. Wright, R. (2005). A Short History of Progress (p. 224). Da Capo Press. ISBN: 0786715472