EDITOR, The Tribune
The global economy is on lockdown and the predictions are staggering. And, there is one regional economy where the long-term realities of the coronavirus are already clear: The Caribbean.
Over the past three decades, nearly every economy in the region transformed to depend on tourism, and today the Caribbean economy is primarily reliant on this single sector. The region is also subject to repeated crises, with 10 Category 5 hurricanes hitting the region in the last 15 years, and five of those occurring in the last three years.
The coronavirus has caused a complete collapse in the tourism industry and significant contractions in both the agricultural and the distributive trades sectors across the Caribbean. As a result, the region’s economy is collapsing and will likely not recover for some time.
Because of the Caribbean’s focus on a single, volatile sector, it is likely to be the first domino to fall in the post-COVID-19 world. When this is all over, the region cannot go back to business as usual. The Caribbean will have to fast-track its journey toward the twin goals that many of its countries embarked on as a result of the impacts of climate change as well as frequent natural disasters: sustainability and resilience.
As such, any multilateral stimulus should be designed to help the Caribbean transition to a new resilient economy that is anchored in sustainable development. The foundation of the future is clean energy, and on top of this, new diverse industries such as modern agriculture, information technology, financial services, and manufacturing can be built. And there is a clear pathway.
Rocky Mountain Institute commissioned a study to understand the costs and benefits to transition all 31 countries in the Caribbean to 90 percent clean energy by 2030. If a major capital investment is made, the Caribbean region would save an estimated $9 billion in fuel costs and replace more than 24 billion liters of imported diesel fuel with renewable energy each year. This would translate into valuable savings in foreign exchange for all countries in the region.
It is no secret that Caribbean governments face significant fiscal constraints, and with the impact of COVID-19 that these constraints will become increasingly insurmountable. It only makes sense that the international community and philanthropic sector use this opportunity to inject global public investment initiatives to accelerate project development in the clean energy sector at a pace and scale never seen before. Economic stimulus investments into the clean energy sector therefore present Caribbean countries with an opportunity to:
• Create urgently required new jobs,
• Reduce electricity costs to attract new industries,
• Improve the competitiveness of agro-processing and other manufacturing sectors,
• Shrink the region’s carbon footprint,
• Decrease leakage of foreign exchange, and
• Diminish dependence on imported fuels.
In order to achieve this, the international community and philanthropy must support Caribbean governments to:
• Focus on re-tooling workers to give them skills needed in the clean energy sector, modern agriculture, manufacturing, and information technology;
• Boost incentives for electric vehicles (EVs) and design policy measures to unlock EV supply chains as well as investment in EV charging infrastructure;
• Forgive overdue electricity bill payments for the poor and local businesses affected by the shutdown;
• Backstop electric utility credit and access to low-interest credit while providing liquidity to government-owned utilities to shore up their finances;
• Create clean energy lines of credit designed to backstop power purchase agreements and capital leases to crowd-in investment in renewable generation; and
• Put people to work immediately in the construction sector by undergrounding overhead transmission lines so that they will not be knocked down by the next storm.
Collectively, these actions will help create thousands of jobs, reduce regional emissions, and reduce long-term dependence on imported diesel, helping the Caribbean to create a new foundation for a diverse, resilient, and sustainable economy. This may be a once in a lifetime opportunity to demonstrate a new vision for the region’s climate future and become an example for the world—transforming its citizens into controllers of their destiny and leaders of the clean energy era.
The Caribbean may be the first economic domino to fall from the coronavirus pandemic. It can also emerge once the crisis is over with a more resilient future through smart utilization of stimulus funding to unlock rapid, intensified investments to help these important islands on the frontlines of climate change make a full transition to become clean energy economies.
DAVID GUBS, JAMES FLETCHER and JUSTIN LOCKE
Nassau,
May, 2020.
Comments
Porcupine 3 years, 10 months ago
Hello David, James and Justin from here in The Bahamas.
This thought process is what is needed as we move forward. However, I would like to add and subtract a little on your proposal. Philanthropy is merely asking for what we should already be doing as a society. We should not have to rely on others to provide what we need. Further, no name should every be attached to what is offered. It despoils the idea of giving. Philanthropy would not be needed were we to have a progressive and fair taxation regime and representative governments which truly worked honestly for the people. Yes, it would be that simple to achieve our collective goals. Second, your emphasis on sustainable and green energy is absolutely sound and is what is required. However, what is more clear than ever is that humanity must reduce our consumption and reduce it significantly. There is no technology that is an environmental silver bullet. All this technology, including information services and electric cars and photovoltaics still require massive amounts of mining, energy and resources to build and maintain. This is not an argument against these technologies. It is a realistic call for a massive reduction in consumption. The other elephant in the room is Capitalism. This is basic math.
moncurcool 3 years, 10 months ago
This so so simple and sensible that it is mind boggling why governments don't introduce this. Apart from the financial services aspects that clearly is no longer working for us, the rest needs to be implemented. The so called Economic Recovery Committee needs to simply submit this plan. there world would be done.
Tribune, please forward this to the office of the prime minister. This is what we need to focus on in recovery!!!!!!!
Porcupine 3 years, 10 months ago
moncurcool, this is only the beginning and will get us no further along the road to sustainability without major structural changes. These also include major changes of heart which will not come easily, nor in our lifetimes. Yes, these all need to be implemented, however, without the deeper changes, all we are doing is kicking the can down the road. If we don't change the way our global resources are shared, we will simply continue down this road to serfdom. We are all currently enslaved by our banking and economic system and the great divides between rich and poor. Yes, or no?
Porcupine 3 years, 10 months ago
Here is the math. Anything that grows at a given percentage rate is called exponential growth. As an example, if your population is growing at say 4%, than the doubling time is 18 years. 18 years goes by pretty fast at my age now. The bottom line is this. We have a finite planet. Yet, we want our economy to continue growing based on the basic assumptions of capitalism. Simply put, capitalism is diametrically opposed to every aspect of your call for improving the lives of people in the Caribbean. I take it that this is the basis for your essay. To create better and more sustainable lives for Caribbean people, yes? Your advice above requires massive change of hearts, minds and works. Yet, even if we follow to the T your advice above, we will still be in the same boat as we are now, by clinging to a failed paradigm that cancels out any gains for humanity. We haven't talked about money yet guys. All money in the world is now created as debt. This is how money is created. I will not go into all of it here, but it is widely agreed that this is how money is created. Go to youtube or Google and do a little homework to see if I'm right here. And then, begin thinking about the implications of all these bankers, insurance companies and hedge funds which only "skim money" off of the top. What do banks produce? Absolutely nothing that a democracy could not will into existence. So, here is the problem. While we can address the mechanical and technological aspects of our "crisis" which I believe you are pushing for. I believe this is a short-sighted errand which leads to nowhere without the structural changes in our global economy. The global economy has been "designed" by the major economic powers, mainly the west, for its own benefit. Nothing more. Unfortunately, it usually takes 40-50 years to learn all of the associated history, economics, science and psychology to get a grip on this stuff. That's if you have the money and time to pursue it. I don't know many who do. And, if they do, they often have better things to do. We need a green revolution urgently. However, simply tweaking our production methods will not do. More than what you are calling for needs to be a complete revolution in our place in this world. A major reduction in personal consumption. I need to say that again. We mostly need a major reduction in personal consumption. Done right, it would liberate humanity into a more free and worthy lifestyle. Capitalism must go. Banks must be made public institutions. And, most importantly, we must revamp our global taxation regime such that we eliminate the growing economic inequality which is at the root of almost EVERY major social problem we face today. It is right there in a growing amount of scholarly research available online. Guys, you have your work cut out for you. I am not saying to give up, rather forge ahead. Your hearts are definitely in the right place. Intellectually, you are. at best, 20%-25% of the way there.
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