So, what do you do when you’re going nowhere? Millions of would-be vacationers are asking themselves this very question as the steep rise in gasoline prices and household staples is forcing them to forgo travel vacations.

And now there’s even a term the media has come up with to capture this phenomenon… one they can prattle on endlessly about: the staycation. But behind the cutesy play on language is the beginning of a very real shift—-one that promises to have some serious implications for both the economy and how Americans will (or won’t) spend their leisure time.

What People Are Doing
Across the country, news and television media stories tell the tale of three trends: people staying home for their family vacations, families cutting back on other vacation expenses in order to afford the travel costs or, often because of other financial pressures, families forgoing their vacations altogether.

On this Fourth of July holiday weekend, nearly a million people who traveled last year are staying home. And campgrounds all over the country are reporting larger numbers of visitors. According to a recent CNN poll, One third of Americans have canceled or shortened their holiday vacation plans because of gas prices. "72 percent said record gas prices have caused them to make changes in their daily lives, and 30 percent said those changes were major ones."

The U.S. Department of Transportation reported last month that Americans drove 1.4 billion fewer highway miles in April 2008 than the previous April, a decline of 1.8 percent. After six straight months of reduced driving, we're talking about 20 billion or so fewer highway miles driven in the States. At less than 2 percent reduction, that says more about how much Americans actually drive than how much their behavior has changed as a result of record high gas prices.

But consider just a few of the ripple effects on the economy and a 2 percent reduction doesn't seem all that small. For instance, the loss of government receipts from the $0.31/mile gasoline tax, which equates to about $167,000,000 less in federal tax dollars so far this year. (Let's ignore for a second the question of whether or not the government would make good use of that money.)

Impacts on the Economy
World tourism is arguably the largest service sector in the global economy. In 2007, tourism accounted for nearly 900 million international arrivals alone. In 2008, world tourism is expected to generate close to eight trillion dollars. International tourism is the U.S.’s largest service export—accounting for more than a quarter of service-industry exports and eight percent of exports all together.

And these numbers don’t account for domestic tourism, which are much harder to calculate.

Not surprisingly, industry groups are either in complete denial about the prospects for dramatic reductions in travel and tourism or just trying to paint a rosy picture.

Overall, the new TSA results reveal a moderate impact on the Travel & Tourism industry as a result of the global economic downturn, with its annual growth rate experiencing a slowdown in 2008, to 3%, in comparison to 3.9% in 2007.

Looking past this present cyclical downturn, the long-term forecasts point to a mature but steady phase of growth for world Travel & Tourism between 2009 and 2018, averaging a growth rate of 4.4% per annum, supporting 297 million jobs and 10.5% of global GDP by 2018.

WTTC President Jean-Claude Baumgarten explained "Challenges come from the US slowdown and the weak dollar, higher fuel costs and concerns about climate change. However, the continued strong expansion in emerging countries - both as tourism destinations and as an increasing source of international visitors - means that the industry's prospects remain bright into the medium term." (Source)

In either case, once you see the writing on the wall, it’s hard to take statements like those of the World Travel & Tourism Council seriously. And yet the impacts are very serious, indeed. Across the globe, governments are beginning to worry about the economic impacts of tourism.

Just this week, Caribbean leaders met to discuss the impacts of soaring oil prices on tourism, their core industry. In Australia, the Managing Director the Australian Tourism Export Council (ATEC), urged government assistance.

He said the federal government needed to give financial incentives for Australians to holiday in Australia in the next school holidays to help the industry recover.

It's got to happen or there are going to be thousands of small businesses across Australia who are going to go broke, they're on their knees at the moment," Australian Associated Press quoted Hingerty as saying.

He said high fuel prices had damaged tourism the same way the drought had hit the farming sector.

The pain will be felt most acutely in communities that depend on tourism as a staple of their local economy.

In Post Carbon Institute's little corner of the world, for example, tourism accounts for $1 billion annually—serving as a central component of Sonoma County’s workforce and revenue. Each year, the $23 million in tax receipts from visitors provides helps local governments fund much needed social services.

So how are communities responding?

It's early days yet, but some communities have shifted their focus to promote local attractions to those living nearby. Though I have to give the City of Burlington, North Carolina points for creativity, I doubt this strategy will be enough. Perhaps if high oil prices only impacted travel expenses, a shift to promote local tourism might work. But the truth is that vacation travel is only the tip of the proverbial iceberg.

One has to wonder how far down from its perch as the world's largest service sector the tourism industry will fall.

Since the summer solstice is now upon us, in this month's Relocalize, we thought to take a quick look at the solar landscape. Where do things stand with new technologies? What resources exist to help defray costs? Does solar work for everyone? Where can people get started?

Now, just two weeks ago, I might have struck a more optimistic chord. But then I was reminded that, in Washington, D.C., political grandstanding continues to take on more urgency than concerns over energy security, climate change or the economy.

On June 10th, opponents successfully blocked a vote on HR 6049 (The Renewable Energy and Job Creation Act of 2008), which would have extended the solar tax credit, due to expire at the end of the year, until 2014. (I won't even bother to mention the other incentives included in the bill, including those for wind, geothermal, biomass and other promising renewable technologies.)

What's the big deal?

The ITC (investment tax credit) for solar not only serves as a major incentive for households to buy solar panels (up to $2,000 credit per residence), it plays a key role in business and government investment in photovoltaic systems (30% tax-break for businesses purchasing solar). It's estimated that 75% of non-residential solar installations are commercial power purchase agreements that rely on the federal tax credit.
Solar providers are warning of dire consequences to their business with the loss of this subsidy:

• "Arizona Public Service Co., for instance, has proposed what would be one of the largest solar-power plants in the world, capable of serving 70,000 homes or more. But utility executives have made it clear that they will kill the plans for the Solana Generating Station if the tax credit isn't extended past its Dec. 31 expiration date." (Source)
• The CEO of SunPower, one of the largest solar providers in the U.S., threatened to leave the U.S. market should the tax credit not be extended. "If the ITC doesn't happen, we can move our business elsewhere and make up for that. Is that a preferred solution? No. Does America lose jobs with that? Yes. But can we as a company hit ‘08 and ‘09 without the ITC? Yes." (Source)
• In California, Pacific, Gas & Electric's planned 550 megawatt solar thermal plant in the Mojave Desert will likely be shelved without the tax credit: "With no ITC there will be no project," said Avi Brenmiller, CEO of Solel, the company tasked with building the plant. (Source)

And it's not just commercial solar projects that will be affected. While $2,000 may not seem like a lot when a typical residential system can cost tens of thousands, for many households like my own-with low usage or little capital-the solar tax credit can mean all the difference in the world. (Visit here to read about my own experience and to find related resources.

How? The ITC has been critical to the expansion of a number of creative financing programs that seek to attract the vast majority of residential home owners who can't afford to purchase a new photovoltaic system outright:

• SolarCity recently announced a program that would cut the average consumer's upfront cost from $25,000 to $2,000.
• SunRun effectively leases (with some upfront costs) their panels through power purchase agreements that provide consumers with a fixed rate (13.5 cents/kWh) for 20 years.

These are just a couple of examples of what's been a rapidly evolving industry. While a number of local municipalities are providing their own, tax-based incentives to spur adoption of solar (in my neck of the woods, for example, the City of Berkeley is financing the cost of solar panels for homeowners who agree to pay back for the system over 20 years through their property taxes), it's not merely government programs that would be hard hit by the loss of the solar tax credit. The examples cited above are for-profit enterprises.

Now, a common argument made by opponents of HR 6049 and other attempts to extend the ITC is that the government shouldn't be raising taxes to pay for the credits. This argument, frankly, is a canard. Previous attempts would have paid for the credits by rescinding tax breaks given to oil companies (which together made $36 billion in profit in just three months this year, twice as much as the entire credit package) back in 2005. HR 6049 would offset the credits by closing tax loopholes for those, like hedge fund managers, who work for certain offshore corporations and delays providing a tax benefit to multinational corporations operating overseas.

So this is not about a tax increase, it's about how we and to whom we choose to extend tax breaks. And what do most Americans think? A recent poll found that:

nearly three-quarters of Republicans (72 percent), Democrats (72 percent) and Independents (74 percent) favor an extension of the federal investment tax credits (ITC) as a way to encourage development of solar power and fund continued development of the technology. In contrast, only 8 percent of Americans believe the ITC should not be extended.

Another argument is that the government should allow the market to drive itself, conveniently forgetting the role that federal subsidies and research & development have long played in the development of the fossil fuel industry. Even in 2007, more than twice as much money was spent by the federal government on R & D for coal than solar.

I won't bother to mention other tax expenditures, but if you want to put federal investment in solar development into some context, take a gander here (warning for those with a sticky mouse, carpal tunnel syndrome or a queasy stomach).

Word has it that Senate leaders plan to reintroduce the bill this week on the floor. Who knows, perhaps by the time you read this, the sun will be shining again on the solar tax credit. In the meantime, if you want to share your thoughts about the Investment Tax Credit you can:

• Contact your elected official(s). You can find and contact your Representative here and Senator here.
• Write a letter to the editor. The Vote Solar Initiative helps you find your nearest newspaper and even provides some talking points for those who wish to support the solar tax credit.