The Economics Of... Travel
Global economics and trade are fundamentally reliant on regional, national, and global travel, primarily in the form of motor vehicles, cargo ships, and airplanes. Often, minimizing physical human effort required for these methods maximizes their efficiency in trade, increasing the popularity of controversial and environmentally damaging methods of recreational travel and shipment. Transportation is one of the greatest contributors to carbon emissions globally, as discussed in my most recent posts on sustainability and overpopulation. So, because economics is an analysis of cost-benefit and supply-demand ratios, what is the real price humans are willing to pay as a result of these travel methods?
According to the Bureau of Transportation Statistics pocket guide, in 2017 trucks accounted for 68.9% of the value of shipments within the U.S., the next most common method being multi-modal (rail, water, air) at 12% of total shipment value. Therefore, it is incredibly important to look at the financial, environmental, and safety implications of commercial truck transportation. The overwhelming negative impact that commercial trucking has on the environment is clear, but the domestic economic contributions that addressing this issue has positive potential. The Environmental Protection Agency (EPA) estimated that their fuel economy standards established in 2010 “will reduce CO2 emissions by about 270 million metric tons […] over the life of vehicles built for the 2014 to 2018 model years, providing $49 billion in net program benefits.” Safety concerns for long-haul truckers and individuals who share America’s highways with them need to be addressed as well, as 20.9% of crashes on the nation’s roadways involved at least one large truck or bus (U.S. Department of Transportation). Another form of commercial travel concerning to our economy, environment, and safety is cargo ships that transport goods interstate and across borders. Speed limits enforced in regulated waters can help to reduce fuel consumption and destruction of sea life, which saves on energy and resource fishing costs in addition to the cost and risk of pollution clean up efforts.
Recreational travel makes its own large impact on international economics. Nominally, the global economic impact of travel and tourism alone generated 10.4% ($8.8 trillion) of world GDP in 2018, according to the World Travel & Tourism Council. Furthermore, 71% of travel spending was on leisure as opposed to business, which means that 7.4% of the same year’s global GDP was accounted for by individual travel and tourism exclusively (WTTC). While The Economic Review of Travel in America (ERTIA) claims that national tourism supported 15.7 million American jobs in 2018 (see the U.S. Travel Association’s Economic Impact of the Travel Industry interactive map), this volume of spending contributed immensely to worldwide carbon emissions. “Flights departing airports in the United States and its territories emitted about one-quarter (24%) of global passenger transport-related CO2, two-thirds of which came from domestic flights” (The International Council on Clean Transportation).
"the global economic impact of travel and tourism alone generated 10.4% ($8.8 trillion) of world GDP in 2018" -- World Travel & Tourism Council
So, how can our personal choices and policymaking on modes and frequency of travel affect the economic landscape of the U.S. and the world? … Advocates for Independent Business (AIB) is a group that promotes the popularization of shopping locally for produce and consumer products; they claimed that 6 in 10 consumers intended to shop locally in 2013, leading to a boost in local economies of 5.3% on average for the year and $5.7 billion on Small Business Saturday alone. The competitive pricing of big box stores are nominally better than those of local products, but in reality consumers choose local retailers because they consider they benefit of local job creation and sustainability (Business Insider). With increasingly local production and market leads to less demand for trucks, cargo ships, and planes delivering products from whichever is the cheapest manufacturing location. Individual travel shifting to smaller vehicles becomes more feasible, from bicycles to hybrid cars and limited airline travel. Sectors such as the automotive industry are evolving towards this trend; electric vehicle sales increased 64% globally and 79% in the U.S. alone from 2017 to 2018, according to the Edison Electric Institute. As we take a closer look at the way that trends in consumer habits shift towards sustainable travel methods at the start of a new decade, the economic health and policies of our planet are proportionally changing to meet this demand.
Works Cited
“2019 Pocket Guide to Large Truck and Bus Statistics.” ROSA P, United States. Department of Transportation. Federal Motor Carrier Safety Administration. Office of Analysis, Research, and Technology, 1 Jan. 2020, rosap.ntl.bts.gov/view/dot/43602.
Aszyf@ustravel.org. “The Economic Review of Travel in America, 2019 Edition.” U.S. Travel Association, U.S. Travel Association, 21 Oct. 2019, www.ustravel.org/research/economic-review-travel-america-2019-edition.
“BTS Pocket Guide.” Bureau of Transportation Statistics, 2019, s3-us-west-2.amazonaws.com/dot-concept-menus/menu/accordion.html.
“Economic Impact.” WTTC, World Travel & Tourism Council, 28 Jan. 2020, www.wttc.org/economic-impact/.
“Electric Vehicle Sales: Facts & Figures.” Edison Electric Institute, Edison Electric Institute, Apr. 2019, www.eei.org/issuesandpolicy/electrictransportation/Documents/FINAL_EV_Sales_Update_April2019.pdf.
Graver, Brandon, et al. “CO2 Emissions from Commercial Aviation, 2018.” The International Council on Clean Transportation, The International Council on Clean Transportation, 19 Sept. 2019, theicct.org/publications/co2-emissions-commercial-aviation-2018.
Hesterman, Oran B. “The Demand for 'Local' Food Is Growing - Here's Why Investors Should Pay Attention.” Business Insider, Business Insider, 25 Apr. 2017, www.businessinsider.com/the-demand-for-local-food-is-growing-2017-4.
LaVecchia, Olivia. “Shopping Local for the Holidays: AIB's Infographic Has the Facts to Know.” Advocates for Independent Business, Advocates for Independent Business, 12 July 2016, indiebizadvocates.org/2014/11/10/shopping-local-infographic/.
“Regulations for Greenhouse Gas Emissions from Commercial Trucks & Buses.” EPA, Environmental Protection Agency, 28 Jan. 2020, www.epa.gov/regulations-emissions-vehicles-and-engines/regulations-greenhouse-gas-emissions-commercial-trucks.
Web@ustravel.org. “Economic Impact Map.” U.S. Travel Association, U.S. Travel Association, 13 Dec. 2019, www.ustravel.org/economic-impact#ca.