AUSTRALIA’S obsession with global positioning software continues to grow, but it may never have happened without a Cold War tragedy.

Australian consumers now spend $700 million annually on GPS, up from less than $100 million five years ago.

The boom is due mostly to the huge demand for portable navigation devices, which now sell for about $500.

In 2002, about 10,000 portable devices were sold. It is estimated that this year 650,000 will be sold and next year more than a million.

The technology, developed by the US military in the 1970s, was never intended for civilian use, but after a Soviet fighter aircraft shot down an off-course commercial airliner in 1983, then US president Ronald Reagan said it should be freely available.

Adrian Tout, national sales manager for whereis.com, which provides digital maps for 95 per cent of the hardware sold in Australia, says soaring demand has led the average price for a portable device to fall to $500 from $1500 a few years ago. And he says what you get is a product “1000 times better”, with features including touch-screen and 3D maps.

“It has become affordable, easier to use and a lot more available. Research we have done shows that if people can take control, they will. There’s also the security and comfort factor that GPS provides,” he says.

GPS uses satellites orbiting the Earth to pinpoint locations. The satellites were launched by the US military, but after Korean Air Lines Flight 007 was shot down when it entered Soviet air space, killing all 269 people on board, GPS experts began working on delivering it to the masses.

The system was fully operational by 1995, and business was quick to see its potential.

In 1997, BMW brought the first consumer GPS technology to Australia in its cars.

About 70,000 in-car GPS units are now sold each year in Australia and add between $2500 and $7000 to the cost of a car.

In 2000, the first portable devices were made commercially available in Australia, with only highway and city maps available.

US-based Garmin, the market leader in portable devices in Australia, now spends nearly $1 billion annually on research and development. “Now that there’s a market, these companies are happy to make the investment,” Mr Tout says.

But he believes the biggest leap forward for GPS technology will come in the form of mobile phones. This year, the first three phones with GPS were released in Australia and more than 50,000 will have been sold by the end of the year.

In the next few months, five more models will become available and, says Mr Tout, they signal the end of the revolution and the establishment of a new norm in navigating. “Soon GPS will become truly ubiquitous this is just the start. Within five years, everyone will have some sort of GPS device.”

The European Union is threatening to impose tit-for-tat entry restrictions on all US citizens travelling to Europe in response to new American laws designed to strengthen security at airports and prevent would-be terrorists entering the country. US tourists can now travel to Europe without a visa.

Franco Frattini, justice and home affairs commissioner, is drawing up plans for an EU-wide system of “electronic travel authorisation” (ETA) similar to that written into US law by President George Bush late last week as part of new homeland security rules proposed by the 9/11 commission and endorsed by Congress.

The ETA requires tourists from 14 mostly west European states, including Britain, benefiting from the US visa waiver programme to register online and give details of their passport, travel plans and planned social and business meetings at least two days before departure. A similar scheme operates in Australia.

The new system has heightened fears about privacy protection as the EU and US already exchange information about transatlantic passengers and airline manifests, with several would-be travellers refused entry to planes at US insistence. It is also seen as a deterrent to business travel to the US and to tourism in general, which is down 10% in the US since 2000 while it is up 13% in Britain and 20% in France.

Mr Frattini, whose director general for justice and home affairs, Jonathan Faul, discussed a reciprocal ETA system with Paul Rosenzweig, US homeland security deputy assistant secretary, in Brussels on Monday, is to present initial plans to the EU’s 27 interior ministers next month, his spokesman said yesterday. “A basic decision has not been taken yet,” he said.

East European members of the EU are angry that their countries are not in the US visa waiver scheme and Mr Frattini wrote to Michael Chertoff, homeland security secretary, in June demanding that all 27 member states take part “to ensure full reciprocal visa-free travel”.

Mr Frattini added: “It is important to have established objective and clear criteria which, on the one hand, will give the US sufficient means to protect its national security and to combat illegal immigration and, on the other hand, enable all EU member states to join the visa waiver programme.”

The commissioner’s spokesman said: “We have a political reality to live with and we share the concerns of the US about terrorism and security. We face very serious terrorist threats ourselves.”

Mr Frattini considered a European ETA scheme after the thwarted plot to blow up 10 transatlantic planes by UK-based terrorists a year ago. EU officials say they are open-minded about the benefits and disadvantages of a reciprocal ETA, which could also apply to non-US tourists. The Australian system is said to work well, using new technologies that could allow fast-track entry and exit procedures for frequent, trusted travellers such as business executives. “The question is whether it unnecessarily hinders legitimate travel or aids it or enables us to enhance security,” said an official.

Mr Frattini has expressed concerns that other aspects of the homeland security bill signed by Mr Bush go too far. These include the enforced screening of all cargo on passenger aircraft within three years and the scanning for nuclear devices of all foreign container ships heading to the US.

FOR eco-friendly NSW company Easy Being Green, last week was anything but. On Friday, the once flourishing business, which mostly revolved around installing energy-saving light bulbs, went out of business, laying off 150 staff and about 100 contractors.

The reason? The NSW carbon-trading scheme that the State Government introduced in 2002 and which was, after Europe’s, the world’s second-largest such scheme has partially collapsed, with the price of carbon credits plunging from last month’s high of $12 to $6. Selling carbon credits in exchange for helping businesses and households cut greenhouse gas emissions is how companies such as Easy Being Green make their money.

The NSW scheme, like most carbon markets, establishes greenhouse gas reduction targets, and requires energy producers to meet emission benchmarks based on the size of their share of the electricity market. Companies that exceed their target must buy credits from companies that produce less pollution than their target, or from companies that reduce greenhouse gases outright, such as Easy Being Green. In effect, the buyer is being fined for polluting, while the seller is being rewarded for having reduced emissions.

So why the huge slump in the carbon credit price? There are a number of theories. One radical theory is that the NSW Government is keeping the overall emissions target quite high thus reducing demand for credits so it can get a better price for the highly pollutant $20 billion state power industry it is trying to sell. Or the price drop may be simply a fluctuation that afflicts any market from time to time. Easy Being Green, argue commentators, should have protected itself with hedging contracts and improved its business model.

But the leading theory for the price drop is the uncertainty caused by the Federal Government’s announcement that it will scrap state schemes such as that in NSW (the ACT also has a scheme) and instead have a national carbon-trading market by 2012. The details of this scheme won’t be released for another couple of years. With NSW power producers uncertain what emissions targets they face under the national scheme, why bother investing in carbon credits?

That’s certainly the view of Easy Being Green. “This catastrophic price drop started when the Federal Government announced plans for a national emissions trading scheme, and its intention to scrap all state schemes without any details of transition arrangements, major polluters stopped buying carbon credits under the NSW scheme because their long-term obligations weren’t clear.”

Labor has also promised a scheme should it be elected.

Origin Energy spokesman Tony Wood said the price drop was out of character. “I don’t think it’s a case of market failure. The market has been quite successful. There’s an issue of how we will transition (to a national scheme) and I think uncertainty in that can cause price volatility,” he said.

The NSW Government is also blaming the transition. “Announcing that (the NSW scheme) would be scrapped if a national scheme is introduced, without providing any of the detail, was extremely irresponsible,” NSW Environment Minister Phil Koperberg said last week. “As a result, the usually stable NSW carbon market has been plagued by uncertainty.”

But why should the drop in the credit price have put Easy Being Green out of business? It’s only been in the past month that the price has halved.

Other carbon companies, such as Carbon Planet, are still in business. A Carbon Planet news release “laughed off claims of industry devastation” by Easy Being Green, and blamed the latter’s business model, involving low-energy light bulbs being distributed to people’s homes. This was “disappointing but not unexpected” according to Carbon Planet’s co-founder, Dave Sag.

Easy Being Green’s CEO, Paul Gilding, rejected criticisms of the firm’s business model. The suggestion it should have bought hedging contracts was “a naive comment from big business who can do that sort of thing. We can’t do that we tried.”

Unlike carbon firms that sell credits based on planting trees, Easy Being Green’s model “depends on how many homes you get into, on whether the government changes the rules or not. All these things mean you can’t be sure how many credits you’ll create.” And this uncertainty made it hard to obtain hedging contracts, he said.

THERE are three main markets in the world trading carbon credits worth a total of $US24.62billion last year, up from $US7.97billion in 2005.SOURCE: THE WORLD BANK

PThe EU market last year was worth $US24.35billion, up from $US7.9billion, with 1.1 billion tonnes of carbon emissions traded.

PThe NSW market was worth $US225 million, up from $US59 million, with 20 million tonnes traded.

PThe Chicago Exchange was worth $US38million, up from $US3million, with 10million tonnes traded.