AUTC project number: 309002
Virginia Fay (UAA)
Congressional measures to decrease greenhouse gas emissions, such as cap and trade, carbon taxes, or other remedies, will impact Alaska residents and businesses. This project aims to develop a model of Alaska’s transportation sector to assess the effects of GHG legislation and other factors that may affect fuel prices or use. By better understanding the climatic effects of transportation options, state and local governments, residents, businesses, and industry can be better informed in planning their futures and the actions they take to adapt. This research is a major component of a UAA Institute of Social and Economic Research program (Energy in the Alaska Economy.) This program will enable a better understanding of the interactions among energy use, energy prices, climate policy, and economic activity. The information will be used to produce sound public policy and decisions. Initial program research includes energy use and potential impacts of rising fuel costs in Alaska transportation, tourism, and fisheries. Alaska’s economy was built around use of fossil fuels at a time when fuel was less expensive (compared to 2008). Key industries such as fishing, mining, tourism, and transportation, as well as subsistence activities, currently depend directly on liquid fossil fuels, while the urban service economy depends heavily on the relatively low cost of living and doing business that has historically been assisted by cheap transportation fuels. These conditions are changing rapidly and perhaps permanently. According to 2005 Energy Information Administration figures, Alaska consumes 40% more fuel per capita than any other state, and more than three times the national per capita average. This is due to a number of factors: Alaska's remoteness, scattered communities and population, limited road system and resulting dependence on air travel, status as a major world air cargo hub, and oil production, transportation and refining. As a result, Alaskans have a higher dependence on energy resources and are more vulnerable to energy price volatilities and shocks.