NewGeography.com blogs

In the lead up to the G20 conference, the security costs were projected to approach a billion dollars. As high as this number sounds, sources are now speculating that the total bill could be closer to $2 billion. Shocking as that number is, the costs incurred by local businesses may have exceeded that total.

In addition to the physical damage to the hundreds of shops that were smashed in, there were major productivity losses during, and in the week before the conference. The most visible opportunity cost was the sharp decline in retail sales. According to Monaris Solutions, businesses within the security barrier saw a 28.08% decline in sales, and a 40.87% decrease in transactions. Businesses outside of the barrier experienced a 10.78% decline in sales, and a 16.43% decrease in transactions. The total city decline in sales was 9.31%, with 14.96% less transactions. This may not seem like that much, until you consider that the city has $47 billion in annual retail sales. A crude calculation puts the total retail losses in the $386 million range for the 25-27th. Given that this is a summer weekend, it is probably a low estimate.

The implicit costs to the financial sector would be difficult to tabulate. With 223,000 employees, even minor disruptions to the sector are extremely costly. Many of the large banks asked their employees to work from home for several days, which certainly caused some level of productivity costs. Many of them also had to temporarily move their trading floors outside of the downtown core. Moreover, each bank needed to prepare its employees for the inevitable disruptions during the conference. As the security boundaries shifted, and government policies to deal with the conference changed, banks were required to hold multiple meetings in preparation. Assuming each meeting lasted a half hour, and the average employee earns $20/hour (an understatement), the financial sector would have lost roughly over $2 million for every single preparatory meeting.

Unfortunately, it is impossible to calculate the full cost of the summit to Toronto businesses. The banks have been fairly quiet about their own costs, likely because of the Harper government’s strong stand against implementing a global bank tax, a move that would have devastated the global financial sector. Though there have been no public statements from the banks, there are rumors circulating that the financial sector lost at least as much as retailers. Those same rumors have it that the overall economic losses exceeded the security costs (based on the original security estimates). With nearly $400 million in retail losses alone, this seems realistic. Let’s hope this G20 experience has finally put to death the myth that hosting controversial global political meetings in major cities brings economic benefits.

If one measures a state’s popularity on the cost of U-Haul rentals, then Ohio is losing out to the sunny Florida beaches big time. The one-way rental fees for a 26-foot U-Haul truck show a significant disparity in the cost to go from Florida to Ohio and the cost to go from Ohio to Florida. The rate for going from Miami to Cleveland is $1,000 compared to $1,457 if the destination was swapped, resulting in a 45.7% premium to leave Ohio. That percentage still pales against the 50.4% premium to go from Cleveland to Tampa or the whopping 56% premium to go from Cleveland to Orlando. U-Haul is offering deep discounts for Ohio-bound travelers, which hopefully for Ohio, will attract more people.

This is not unique to Florida either. U-Haul rates to go to and from states like Texas and Pennsylvania reflect the same pattern. Some speculate that Ohio’s higher taxes are to blame for the exodus, but who knows; maybe Ohioans just want a change of scenery.

In a surprise move, the Vietnam National Assembly rejected plans proposed by the government to built a high speed rail line from Ho Chi Minh (Saigon) to Hanoi.

Some opponents expressed concern that the line would not be competitive with air service. The 900 mile route, which was to operate at up to 186 miles per hour, would take between five and six hours to make the trip between Vietnam's two principal cities. This compares to the current two hour trip by air. Concerns were expressed that this travel time, combined with fares that would need to be competitive with those of airlines would be insufficient to make the line a viable economically.

But the strongest objections were expressed with respect to the context of such a large expenditure in a developing nation. The high speed rail line would have cost an amount equal to 60% of Vietnam's gross domestic product, even before the cost overruns that have typically plagued such projects. This is akin to spending $8.5 trillion on high speed rail in the United States (more than $25,000 per capita).

National Assembly member Nguyen Minh Thuyet told the Agence France-Press that some children in the Central Highlands can only get to school by swinging on a cable across a river because they have no bridge, questioning the validity of such an expensive project in light of the nation's low income.

Photograph: Ho Chi Minh (Saigon)

Bay Area businesses beware, San Francisco is once again considering banning a common city commodity. This time it is not environmentalists, but city lawmakers who are howling for change. If San Francisco’s Commission of Animal Control and Welfare approves the proposed ordinance, it will be illegal to sell any pets in the city except for fish.

Commission Chairwoman Sally Stephens, who seems to be the voice of pet sale opposition, claims that people buy small pets without thinking and end up giving them to shelters where they are euthanized. Those looking for an animal companion would have to buy one from a different city, adopt one from a shelter, or buy one through the classifieds. While this does make it that much harder to buy a pet on impulse, San Francisco residents would still be giving up their pets to shelters in the city. It also seems that many of the animals you would buy on impulse – guinea pigs, birds, and mice – do not typically go to shelters when they become difficult to manage or forgotten.

Pet store owners around San Francisco are making a fuss as their major attractions are being threatened. Dogs can sell for a few hundred dollars or more at pet stores, and losing this income source would surely strike a blow to pet businesses. The Board of Supervisors has the final say, but pet lovers and owners around the city are piping up.

As such a compact city, San Francisco seems to want to clear out any waste they set their sights on. Yesterday it was plastic bags, today it is animals. Who knows what San Francisco lawmakers will target next?

Hat tip: Newsalert

For years, the world's busiest airports in passenger volume have been Atlanta's Hartfield-Jackson International and Chicago's O'Hare. However, there are indications that this long dominance may be about to end. According to Airport Council International data for 2009, Chicago O'Hare had fallen to 4th position, following Atlanta, London-Heathrow and Beijing Capital International Airport.

Beijing's Capital International increased its passenger volume by 17% in 2009, while European and American airports were experiencing slight declines due to the recession. Beijing's increase is more significant, because growth might have been expected to level off after the 2008 Olympics, which were held in Beijing. Between 2008 and 2009, Beijing rose from 8th in the world to 3rd, and from 20th place in 2004, when its volumes were approximately one-half the present level.

Early 2010 data (first quarter) indicates that Beijing Capital International has become the second busiest airport in the world, trailing only Atlanta. Passenger volumes were up 10.5% from a year earlier. If the current rate of growth continues, Beijing should pass Atlanta in two to three years, even if the American economy improves.

London's 130 million annual passenger traffic was the greatest of any metropolitan area in the world in 2009 (distributed among five airports). The new Conservative-Liberal Democrat government seems determined, however, to forfeit this ranking, having banned further London airport expansions to combat what it calls "binge flying."

New York was second with passenger traffic of 105 million at its three major airports, while Tokyo was third at 95 million. "Binge flying" does not seem to be a concern in Japan, where Tokyo's Haneda Airport is adding a fourth runway and will soon serve international flights again, providing competition to more distant Narita. Atlanta's single airport handles an annual passenger volume of 88 million.

Other airports in China are also growing. In the Pearl River Delta (the world's largest "mega-region," an area of adjacent urban areas), the four large airports, Hong Kong, Guangzhou and Shenzhen accommodated passenger traffic of more than 105 million in 2009. Traffic at Shanghai's Pudong and Hongqiao grew 14% and 10% respectively.

Overall Chinese air traffic is also growing rapidly. Over the past 10 years, annual passenger volumes have risen an average of more than 25%. This compares to an average annual growth rate of 3.2% in the European Union (EU-27), 1.6% in the United States and 1.1% in Japan (Figure). The US continues to be dominant in passenger volumes, at 940 billion annual passenger kilometers, compared to 560 billion in the European Union, 280 billion in China and 80 billion in Japan (data calculated from US, Europe, China and Japan national sources).