great decisions 2009 by dr. amy f. blizzard planning program, department of geography east carolina...

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Great Decisions 2009 By Dr. Amy F. Blizzard Planning Program, Department of Geography East Carolina University

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Page 1: Great Decisions 2009 By Dr. Amy F. Blizzard Planning Program, Department of Geography East Carolina University

Great Decisions 2009

By Dr. Amy F. BlizzardPlanning Program, Department of GeographyEast Carolina University

Page 2: Great Decisions 2009 By Dr. Amy F. Blizzard Planning Program, Department of Geography East Carolina University

An introduction to global energy use

Page 3: Great Decisions 2009 By Dr. Amy F. Blizzard Planning Program, Department of Geography East Carolina University

Source: BP Statistical Review of World Energy, 2008

Page 4: Great Decisions 2009 By Dr. Amy F. Blizzard Planning Program, Department of Geography East Carolina University
Page 5: Great Decisions 2009 By Dr. Amy F. Blizzard Planning Program, Department of Geography East Carolina University

Total world consumption of marketed energy is projected to increase by 50 percent from 2005 to 2030.

The largest projected increase in energy demand is for the non-OECD economies.  

Page 6: Great Decisions 2009 By Dr. Amy F. Blizzard Planning Program, Department of Geography East Carolina University
Page 7: Great Decisions 2009 By Dr. Amy F. Blizzard Planning Program, Department of Geography East Carolina University

Oil demand declined in 2008

Demand for oil declined 300,000 barrels a day in 2008 and will fall by another 500,000

Global GDP growth has been roughly halved to 1.2 per cent

Supply is increasing, demand is decreasing

Page 8: Great Decisions 2009 By Dr. Amy F. Blizzard Planning Program, Department of Geography East Carolina University
Page 9: Great Decisions 2009 By Dr. Amy F. Blizzard Planning Program, Department of Geography East Carolina University

Energy and the GDPEnergy and foodEnergy and government services

Page 10: Great Decisions 2009 By Dr. Amy F. Blizzard Planning Program, Department of Geography East Carolina University
Page 11: Great Decisions 2009 By Dr. Amy F. Blizzard Planning Program, Department of Geography East Carolina University
Page 12: Great Decisions 2009 By Dr. Amy F. Blizzard Planning Program, Department of Geography East Carolina University
Page 13: Great Decisions 2009 By Dr. Amy F. Blizzard Planning Program, Department of Geography East Carolina University

A standard measure of national economic health

Usually measured as a comparison (%)

GDP - total cost of all finished goods and services produced within the country in a stipulated period of time (usually a 365-day year)

GDP = C + I + G + (X − M)

Page 14: Great Decisions 2009 By Dr. Amy F. Blizzard Planning Program, Department of Geography East Carolina University
Page 15: Great Decisions 2009 By Dr. Amy F. Blizzard Planning Program, Department of Geography East Carolina University

Overall power of countries to invest declines

Less private investment Less credit extended Developing regions affected more

directly Less employment opportunities in the

developed world Remittances and other transfers into

developing regions

Page 16: Great Decisions 2009 By Dr. Amy F. Blizzard Planning Program, Department of Geography East Carolina University
Page 17: Great Decisions 2009 By Dr. Amy F. Blizzard Planning Program, Department of Geography East Carolina University

When GDP falls, and investments decline, leads to a decline in the Consumer Price Index

November 2008- greatest decline (1.7%) since we started keeping records in 1947

Deflation may mean lower costs, but is generally bad for the economy

So why are food costs still so high???

Page 18: Great Decisions 2009 By Dr. Amy F. Blizzard Planning Program, Department of Geography East Carolina University
Page 19: Great Decisions 2009 By Dr. Amy F. Blizzard Planning Program, Department of Geography East Carolina University

Since the financial crisis, 40 Million people were added to the ranks of the malnourished.

963 Million people now considered hungry. 907 million - live in developing countries, 65 percent live in only seven countries:

India, China, the Democratic Republic of Congo, Bangladesh, Indonesia, Pakistan and Ethiopia..

In sub-Saharan Africa, one in three people - or 236 million (2007) - are chronically hungry

Page 20: Great Decisions 2009 By Dr. Amy F. Blizzard Planning Program, Department of Geography East Carolina University

Food costs are dependent on energy and other commodity prices.

Food is also subject to credit/investment to farmers and for markets

Food is also at the mercy of mother nature

Landless and powerless suffer the most

Page 21: Great Decisions 2009 By Dr. Amy F. Blizzard Planning Program, Department of Geography East Carolina University

Tax reductions in fuel and food to offset higher prices

Increased spending on subsidies and income support

December 2008 IMF Survey of 161 countries: 575 reduced taxes on food 27% reduced taxes on fuels 20% increased food subsidies 22% increased fuel subsidies

Page 22: Great Decisions 2009 By Dr. Amy F. Blizzard Planning Program, Department of Geography East Carolina University
Page 23: Great Decisions 2009 By Dr. Amy F. Blizzard Planning Program, Department of Geography East Carolina University

GDP in East Asia and the Pacific increased 8.5%

Rising oil and food prices boosted median inflation in the region to 9 percent in 2008

Prospects for 2009 and 2010 have dimmed with the deterioration in the external environment.

Private sector investment in particular stands at risk.

Decline in oil and food prices will support external positions and provide some relief on the inflation front, but…

Page 24: Great Decisions 2009 By Dr. Amy F. Blizzard Planning Program, Department of Geography East Carolina University

GDP growth in South Asia eased to an estimated 6.3 percent in 2008

Deterioration in trade balances, however, has been offset in large part by large remittance inflows, particularly for Bangladesh, Nepal, and Sri Lanka, where remittances represent 8 percent of GDP or more.

The global financial crisis is placing further downward pressure on growth.

Food and fuel price subsidies have pushed fiscal outlays higher, reversing recent progress in fiscal consolidation.

Page 25: Great Decisions 2009 By Dr. Amy F. Blizzard Planning Program, Department of Geography East Carolina University

In Europe and Central Asia, output is likely to increase by 5.3 percent in 2008 (but a downward trend)

Deteriorating external positions and new risks from the global banking crisis are likely to depress prospects for vulnerable countries, and the downside risks are substantial.

Most countries have experienced strong growth in domestic demand, but net trade has remained a drag on growth.

Medium-term outlook points to a sharp decline in regional growth.

Page 26: Great Decisions 2009 By Dr. Amy F. Blizzard Planning Program, Department of Geography East Carolina University

2008 headline inflation jumped in response to higher oil and food prices, and policy makers in countries such as Brazil and Chile raised interest rates.

Gross capital inflows to the region compressed by 45 percent between January and September 2008, compared with the same period in 2007.

GDP growth in the region is expected to drop to 2.1 percent in 2009

Page 27: Great Decisions 2009 By Dr. Amy F. Blizzard Planning Program, Department of Geography East Carolina University

Developing countries of the Middle East and North Africa represent wide extremes in their economies

Exports slowed in 2008 as growth turned sluggish among key trading partners in Europe and the United States.

The region’s oil exporters will face the challenge of diminished revenues in 2009.

For the region’s oil-importing economies, lower energy prices will reduce the import bill and provide some breathing space on the inflation front.

Page 28: Great Decisions 2009 By Dr. Amy F. Blizzard Planning Program, Department of Geography East Carolina University

GDP Growth in Sub-Saharan Africa, outside of South Africa, increased 7 % in 2007

GDP advances have become more broad-based and less volatile in recent years, especially among oil importers.

outside of South Africa remained strong at 6.6 percent as GDP gains among oil-producing countries eased moderately to 7.8 percent, joining the larger group of oil-importing countries where GDP gains slowed to 4.2 percent in the year.

The region’s growth is expected to decline to 4.6 percent in 2009

Page 29: Great Decisions 2009 By Dr. Amy F. Blizzard Planning Program, Department of Geography East Carolina University
Page 30: Great Decisions 2009 By Dr. Amy F. Blizzard Planning Program, Department of Geography East Carolina University

Roller Coasters Rides , Rough Seas , and Dark Skies

Hold on Folks, its going to get bumpy!

Page 31: Great Decisions 2009 By Dr. Amy F. Blizzard Planning Program, Department of Geography East Carolina University

World trade volumes are expected to contract in 2009 for the first time since 1982.

The global credit crunch is likely to affect private investment especially, which is the most cyclical and most internationally traded component of GDP.

No one vision of where this will take us

Page 32: Great Decisions 2009 By Dr. Amy F. Blizzard Planning Program, Department of Geography East Carolina University

As credit dries up, export receipts are more difficult to insure

Combined with slowing demand = slowing exports

Trickle across(?) Effect - countries that experienced a slowing of exports because of low U.S. demand growth benefited from higher commodity prices ( but this is inflation)

More gradual building in the economic slowdown, but has not peaked yet

Page 33: Great Decisions 2009 By Dr. Amy F. Blizzard Planning Program, Department of Geography East Carolina University

• Higher commodity prices have raised the current account deficits of many oil-importing countries to worrisome levels .

• International reserves of oil-importing developing countries are now declining as a share of their imports.

• Moreover, inflation is high, and fiscal positions have deteriorated both for cyclical reasons and because government spending has increased to alleviate the burden of higher commodity prices.

Page 34: Great Decisions 2009 By Dr. Amy F. Blizzard Planning Program, Department of Geography East Carolina University

Globally, GDP growth is expected to improve in 2010.

Many economists see this as a necessary correction, so now the PPP will increase in developed and developing nations

May actually help us to

reduce consumption and invest in the planet.

Page 35: Great Decisions 2009 By Dr. Amy F. Blizzard Planning Program, Department of Geography East Carolina University

What is the role of US Energy Policy? Increase Supply or Lessen Demand? Cornucopian or Neo-Malthusian?

What is the role of fuel subsidies for the current economy?

How do we address declines in tax revenue due to declined demand?

Should the US look to foreign sources as a way to boost the commodity? Or…

Should the US look to domestic sources to improve the industry?

Page 36: Great Decisions 2009 By Dr. Amy F. Blizzard Planning Program, Department of Geography East Carolina University

For thoughts, questions, criticisms and ideas:

Dr. Amy Blizzard, AICPAssistant ProfessorPlanning Program, Department of GeographyEast Carolina UniversityGreenville, NC 252-328-1270Email: [email protected]