Welcome

Dennis Jones is a Jamaican-born international economist, who has lived most of the time in the UK and USA, and latterly in Guinea, west Africa. He moved back to the Caribbean in 2007. This blog contains his observations on life on this small eastern Caribbean island, as well as views on life and issues on a broader landscape, especially the Caribbean and Africa.

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Sunday, February 24, 2008

What size are your feet? Caribbean countries need to get serious about how they use energy

News from the Cayman Islands this week shocked me: that small island (of 100 square miles and 45,000 people) was ranked 55 out of 207 countries for global carbon emissions per person, at 1.96 tonnes per person (based on 2004 data). The figures come from the United States Energy Department’s Carbon Dioxide Information Analysis Center. The carbon footprint is a measure of the impact human activities have on the environment in terms of the amount of greenhouse gases produced, measured in units of carbon dioxide.

The main culprit in the Cayman Islands and most of the Caribbean is oil consumption, which is used to power almost every thing in the islands. Ironically, the ninth annual Caribbean Conference on Sustainable Tourism Development (STC-9) took place in Grand Cayman from 21 to 24 May 2007. The Conference’s overall theme was, “Keeping the right balance: Health and Wellness – Communities, Environments and Economies,” and was hailed as a significant step toward developing the awareness, policies and practices for the sustainability of Cayman’s and the Caribbean tourism sector. But apart from talk I wonder if the region is getting serious about energy use and energy conservation.

For some context, the United States, with less than 5 percent of the world’s population, accounts for 21 percent of carbon emissions. It is followed by China, which emits 18 percent. Both countries are heavy users of coal, the most carbon-intensive fossil fuel. Russia accounts for 6 percent of carbon emissions, just ahead of Japan, which produces 5 percent of the global total. Other major contributors to global carbon emissions are India, Germany, Canada, the United Kingdom, South Korea, and Italy (see data).

Qatar, with 14 tonnes of carbon emitted per person, leads the world in per capita emissions. This is due in part to its booming natural gas industry and the distribution of free electricity to households. Per capita emissions in Singapore and the United Arab Emirates stand at 9 tonnes per person, followed by Kuwait at 7 tons. These countries have very small populations and thriving economies that contribute to high per capita emissions. The United States, Australia, and Canada each emit roughly 5 tonnes of carbon per person each year. This is five times the figure in China and 17 times that in India.

Much of the growth in carbon emissions over the next 25 years will come from developing countries. The world’s most industrialized countries currently account for 55 percent of all emissions. But developing and transitional economies led by China, Russia, and India are projected to be responsible for some 60 percent of global carbon emissions in 2030. A combination of rapid economic growth and heavy reliance on coal will drive this trend.

Though such projections are bleak, several promising examples can guide future action to reduce carbon emissions. Over the past 15 years, Germany reduced emissions by 10 percent, while the UK cut its emissions by some 3 percent. Each country simultaneously sustained moderate economic growth. These countries achieved reductions by lowering their reliance on coal, increasing taxes on fossil fuels, mandating energy efficiency targets, and funding renewable energy promotion. To help meet its Kyoto Protocol commitments, the European Union launched an Emissions Trading Scheme in January 2005, which limits carbon emissions and allows companies that reduce their emissions to profit by selling emissions permits to other companies.

In the US, plans exist to reduce carbon emissions at the state level. Seven northeastern states have committed to a Regional Greenhouse Gas Initiative that mandates a 10 percent emissions reduction from 2009 levels by 2019. California, the world’s ninth largest economy, recently announced that it will reduce carbon emissions to 1990 levels by 2020. This policy is expected to boost state income by $4 billion and create 83,000 new jobs.

Jamaica's central bank governor, Derick Latibeaudiare, just flagged some of the issues for that country (see today's Gleaner editorial). He focused on the country's oil bill and the budgetary implications. The oil import bill reached US$2.2 billion last year, and is likely to jump another US$500 million or approximately 23 per cent in 2008, about the same level as the previous year. Indeed, Jamaica, in US dollar terms, in 2007, paid nearly 50 per cent more for the oil it consumed than it did three years earlier. Jamaica's public-sector deficit will close the fiscal year at around 5.5 per cent of GDP; the oil bill is nearly 70 per cent of merchandise exports and nearly 30 per cent of GDP.

Jamaica and other countries in the region consume large amounts of oil, in Jamaica's case about 27 million barrels a year, which accounts for 96 per cent of energy needs. Volume has shifted little in recent years, and any movement tends to be up; with world oil price rising sharply in nominal terms and hovering at US$100 a barrel you can do the maths.

I just read in today's Advocate that, according to Ministry of Energy figures, in 2007 Barbados spent a total of about US$ 208 million on oil imports. This included about US$ 75 million to fuel the over 100,000 vehicles on the roads here. That was for just over 828,000 barrels of unleaded gasoline imported from Trinidad (+2 1/2 percent) at about US$ 91 a barrel; in 2006 the amounts were about US$ 68 million, 808,300 barrels, and about US$ 84.6 a barrel, respectively. The figures show a dramatic rise in diesel imports to 749.5 thousand barrels (+14 3/4 percent) from 653.1 thousand barrels in 2006, costing US$ 64 million in 2007 compared to US$ 78 million in 2006. In Barbados, diesel retails at B$ 1.46 a litre compared to B$ 2.15 a litre for unleaded gasoline. Fuel ("Bunker C") imported for electricity generation decreased dramatically to 1.338 million barrels in 2007 (-21 percent) from 1.691 million barrels in 2006, paring that bill from US$ 87.8 million in 2006 to US$ 68.2 million in 2007.

Barbados' new Minister of Stete for Finance and Energy, Darcy Boyce, has mentioned that the new government is looking to reduce the nation's energy bill, and two initiatives will include first a plan for renewable energy sources (solar, biomass), and second a campaign to encourage energy conservation. The government will be looking at the financial feasibility of ethanol production in Barbados. Beyond that he is asking Barbadians to "be conscious" of how they use energy at home and on the roads. Barbados experimented with "park and ride" schemes during Cricket World Cup and some are pleading that this becoming a permanent feature to help deal with traffic congestion.

In this region, the damage to the balance of payments and governments' fiscal programmes are obvious, and are hard to offset by increased foreign exchange inflows from tourism or financial capital, so foreign exchange reserves are going to be pressured.

Countries are talking about their needs for an energy policy, and this should be applauded. But part of this must include programmes that aggressively target energy efficiency, use of renewable energy (such as solar power as is prevalent for heating water in Barbados, and where there have been projects with solar vehicles), and to reorganise public transport. But petrol is a political topic. Still, some hard decisions to be taken, starting with policies to reduce consumption, which might include higher taxes at the pumps. In Jamaica, previous efforts at this in 1978 and 1999 led to (some would say politically inspired) riots.

Some highly publicized efforts could help, Prince Charles--that renowned environmentalist--and his wife, the Duchess of Cornwall, will be making a tour of several Caribbean islands from March 4, and reports indicate that this will involve 40 percent less carbon emissions than his previous Caribbean tour in 2000. They will use a luxury yacht, the Leander, instead of a plane to travel between the islands (Trinidad and Tobago, St. Lucia, Jamaica and Montserrat) and use scheduled flights rather than a private jet to fly to and from the Caribbean.

Many of the region's politicians are cynical and it leaves a bad taste in the mouths of many when efforts in the area of energy conservation are seen by some political vultures and yet another opportunity to feather their nests, as with the current scandal in Jamaica about free energy-saving bulbs from Cuba (see latest report in yesterday's Gleaner concerning former government minister, Kern Spencer).

It wont happen today or tomorrow, but our lack of concern about the environment and energy use is sending a death knell for the livelihoods of the Caribbean islands. Many of the causes of climate change are not of our making, but we are reaping the "rewards". Declining fish stocks, polluted seas, rapidly dying coral, are affecting many islands and lessening their attraction to tourists, albeit very little for now perhaps. Our dependence on oil can only be sustained with higher production (only a reality for Trinidad) or by reductions in consumption. It's a bitter pill to swallow when people associate economic progress with a certain lifestyle that involves much higher energy consumption, but it's part of the new reality. We are unlikely to make much head way by taking individual national approaches, and we have to tackle that other nettle of trying to settle on good regional policies.

1 comment:

jamaicangirl2007 said...

You are so right! In order to be energy concious we (The Caribbean) will have to undergo a major culturual shift. I recently attended a birthday party and the parking lot was lined with SUVs...why are we allowed to import these gas guzzlers who are not even eco-friendly? Why haven't we considered a regional energy drive? Why haven't we been proactive? All because we live on these dots where a few people claim they have the magic potion for all our lives....where we have no say....where economic development is THE measure of true development, as you have indicated in not so many words. I don't know but the region is dragging its feet....