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Kelli Ashley Armstrong | kaa2161
Political Economy of Energy and Climate Change Policies | Professor Laurence Tubiana
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1
“ENERGY AND CLIMATE CHANGE IN THE CARIBBEAN: Strategies and Challenges
to Regional Sustainable Energy Development”
FINAL OUTLINE
INTRODUCTION (page 2)
CARICOM Energy Policy 2013
Energy and Climate Change Actions
STRATEGIES AND CHALLENGES (page 3)
C-SERMS
NAMAs
RAMAs
EVALUATION AND RECOMMENDATIONS (page 7)
GDP intensity
CO2 intensity
DISCUSSION (page 10)
READINGS AND REFERENCES (page 11)
Kelli Ashley Armstrong | kaa2161
Political Economy of Energy and Climate Change Policies | Professor Laurence Tubiana
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INTRODUCTION
BACKGROUND
The Caribbean Community (CARICOM) was established in 1973 by Barbados, Jamaica, Guyana,
and Trinidad & Tobago. To date, CARICOM has 15 Full Member States who are represented by
their Heads of Government that sit on boards of various institutions of, within and associated
with CARICOM (CARICOM Secretariat, 2011). The goal of these institutions is to consistently
work "for the benefit and advancement of its peoples" toward the goal of sustainable
development in the Caribbean region; including sustainable development of the energy sector
(CARICOM Secretariat, 2011).
The primary energy consumption in CARICOM is fossil fuels, which account for over 90% of total
energy consumption (CARICOM, 2013). Of the 15 Full Member States, 6 are energy-producers
of fossil fuels, hydro-power and wind (CARICOM, 2013). However, energy production in the
Caribbean has limited capacity due to its small island developing states (SIDS) (CARICOM, 2013).
Trinidad & Tobago is the only "major producer and net exporter of petroleum, petroleum-
related products and natural gas"; while other CARICOM Member States mainly only produce
enough for local or national consumption (CARICOM, 2013). As a result, consumption of energy
in the region far surpasses production, thus making CARICOM a net importer of energy
(CARICOM, 2013).
Despite its energy consumption habits, CARICOM has relatively small populations when
compared to the rest of the world, and thus, contributes very little to total global emissions of
greenhouse gases (CARICOM, 2013). As a result of this, CARICOM is not yet legally obligated to
reduce their greenhouse gas emissions (CARICOM, 2013). However, because current climate
change is due to increasing greenhouse gases in the atmosphere mainly from fossil fuel
emissions, and the negative impacts of climate change such as sea level rise and climate
extremes are so detrimental to SIDS, CARICOM is seeking to take advantage of the opportunity
to be a leader in "migrating to low carbon systems" (CARICOM, 2013).
CARICOM ENERGY POLICY 2013
In 2003, CARICOM established a Task Force comprised of Grenada, Guyana and its energy-
producing countries to work on producing an energy policy for the region (CARICOM, 2013).
Initial recommendations were to address issues of energy security, pricing, purchasing and
transportation agreements in relation to fossil fuels (CARICOM, 2013). The Task Force itself,
later realized the need for a regional energy policy to also explicitly address energy
investments, efficiency, diversity, and environmental impacts; including those related to
Kelli Ashley Armstrong | kaa2161
Political Economy of Energy and Climate Change Policies | Professor Laurence Tubiana
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climate change (CARICOM, 2013). Ten years later,
CARICOM Energy Policy 2013 was approved by the CARICOM Heads of Government.
The vision of the CARICOM Energy Policy is "fundamental transformation of the energy sectors
of the Member States of the Community through the provision of secure and sustainable
supplies of energy in a manner which minimizes energy waste in all sectors, to ensure that all
CARICOM citizens have access to modern, clean and reliable energy supplies at affordable and
stable prices, and to facilitate growth of internationally competitive regional industries towards
achieving sustainable development of the Community" (CARICOM, 2013).
As it relates to actions for energy and climate change, the CARICOM Energy Policy is to
"establish regional and national targets for the reduction of greenhouse gas emissions in the
energy sector and implement appropriate mitigation actions relevant to the energy sector"
(CARICOM, 2013). Member states are encouraged to work together to decide on emission
reduction targets under the direction of the Caribbean Sustainable Energy Roadmap and
Strategy (C-SERMS) which are modelled after commitments to international agreements, such
as those under the United Nations Framework Convention on Climate Change (UNFCCC) and
the Alliance of Small Island States (AOSIS) (CARICOM, 2013). Nationally Appropriate Mitigation
Actions (NAMAs) to reduce emissions are also encouraged, but require national data on
emissions, and are voluntary (CARICOM, 2013). Another objective is to "identify projects that
could be funded from available sources under the global climate change agenda and make
collective representation for funds to be disbursed" (CARICOM, 2013).
STRATEGIES AND CHALLENGES
CARIBBEAN SUSTAINABLE ENERGY ROADMAP AND STRATEGY (C-SERMS)
According to the CARICOM Energy Policy, "the C-SERMS is conceptualized as an updateable,
sustainable energy planning, management and implementation framework as well as a
communication tool to be developed under the CARICOM Energy Programme (CCEP) in
collaboration with CARICOM Member States and other partners" (CARICOM, 2013).
The regional's disproportionate dependence on fossil fuels submits it to significant challenges
with sustainable energy development due to "volatile oil prices, limited economic
development, degraded local resources and failure to establish a precedent for global action to
mitigate the long-term consequences of climate change" (CARICOM, 2013). In 2009, CARICOM
Heads of Government agreed that a key climate change mitigation strategy was to increase the
region's energy efficiency and renewables (CARICOM, 2013). A regionally coordinated approach
was found to be feasible "to determine baseline energy efficiency opportunities and renewable
energy resource potential"; since most energy challenges and opportunities are common
among Member States (CARICOM, 2013; Worldwatch, 2013). For example, the capacity for
Kelli Ashley Armstrong | kaa2161
Political Economy of Energy and Climate Change Policies | Professor Laurence Tubiana
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energy production from renewables is realized in Belize, Jamaica, Suriname, and St. Kitts &
Nevis; however, it was discovered that other Caribbean countries also have great potential for
exploitation, but lack capacity for development (CARICOM, 2013; Worldwatch, 2013).
Regional cooperation is also imperative to achieve the warranted transformation of the
Caribbean energy sector (Worldwatch, 2013). To this end, a sustainable energy roadmap was
developed to guide the region in its transition to a more sustainable energy sector (CARICOM,
2013). In 2010, it was agreed that the roadmap would also include a coherent strategy to give
further direction to Member States, and ensure their engagement and participation in
implementation (CARICOM, 2013; Worldwatch, 2013; CCEP, 2013).
A summary and recommendations for policy makers on the first phase of C-SERMS was
produced by the Worldwatch Institute (Worldwatch, 2013). In the report, based on initial
assessments, Worldwatch identifies energy challenges across sectors, including power,
transportation and tourism; the largest energy consumers in CARICOM Member States
(Worldwatch, 2013). Worldwatch also explores the feasibility of energy reform including the
further development of current energy-producing renewables being used by Member States, in
addition to geothermal and biomass.
As a result of their assessment, Worldwatch put forward ambitious short, medium and long
term regional and national targets for energy sustainability (Worldwatch, 2013). They are
outlined in the table below:
2017 2022 2027
Regional Sustainability Targets (%)
Renewables 20 28 47
Energy Intensity Reductions 33
CO2 Emissions Reductions* 18 32 36
National Sustainability Targets (CO2 Emissions Reductions only) (%)**
Antigua and Barbuda 62
The Bahamas 53
Barbados*** 61
Belize*** 62
Dominica 100
Kelli Ashley Armstrong | kaa2161
Political Economy of Energy and Climate Change Policies | Professor Laurence Tubiana
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Grenada 100
Guyana 82
Haiti 44
Jamaica*** 51
Montserrat 100
Saint Kitts and Nevis*** 100
Saint Lucia 100
Saint Vincent and the Grenadines 78
Suriname*** 43
Trinidad and Tobago*** 29
Source: Table created by author, adapted from Worldwatch (2013).
* carbon dioxide emissions reduction in the power sector against ‘business-as-usual’ (BAU)
** estimated carbon dioxide emissions reduction in the power sector against BAU in 2027
***energy-producing Member States (CARICOM, 2013).
Recognising that "sustainable energy development is limited by policy and data gaps,
administrative ineffectiveness and often inefficient and uncoordinated implementation
efforts", Worldwatch noted that while the the targets are ambitious, they are feasible if the
commitments are upheld with a long term vision of sustainability, supported by already existing
national, regional and international policies, best practices and good governance (Worldwatch,
2013). According to Worldwatch, there are unique "information, finance, policy and capacity
barriers" at national and regional levels, but regional coordination through the CARICOM
Energy Policy and C-SERMS are "critical steps toward a more comprehensive sustainable energy
plan for the region" (Worldwatch, 2013).
NATIONALLY APPROPRIATE MITIGATION ACTIONS (NAMAs)
Given that not every country can feasibly mitigate greenhouse gas emissions in the same
manner due to financial, capacity or other constraints, the critical importance of NAMAs is
recognized as a key element to reducing emissions in developing countries; providing them the
opportunity to “structure and promote their emission reduction efforts” (UNEP Risoe Centre,
2013). While this is widely understood, the international climate negotiations under the
UNFCCC, from which NAMAs were derived, have yet to officially define them or clarify
Kelli Ashley Armstrong | kaa2161
Political Economy of Energy and Climate Change Policies | Professor Laurence Tubiana
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mechanisms and guidelines for Measurements, Reporting and Verification (MRV) (UNEP Risoe
Centre, 2013). As stated in the UNEP Risoe Centre’s guide to Understanding the Concept of
Nationally Appropriate Mitigation Action, “it is expected that clarity on some of these aspects
will emerge from bottom-up based experiences of countries when developing and
implementing NAMAs” (UNEP Risoe Centre, 2013). In an attempt to do just that,
representatives from Latin America and Caribbean (LAC) countries were hosted at a “regional
workshop on promoting international collaboration to facilitate the preparation, submission
and implementation of NAMAs in 2013 (UNFCCC, 2014).
Representatives were reminded that their countries had the opportunity to participate in the
NAMA process in two ways: politically and technically. (UNFCCC, 2014). Politically, meant that a
country would submit NAMAs by responding to an open invitation by the Conference of the
Parties (COP) (UNFCCC, 2104). Technically, meant that a country would submit to the NAMAs’
online registry “for recognition of NAMAs seeking support for their preparation and/or
implementation” (UNFCCC, 2014). Representatives were also reminded that under
Workstreams 1 and 2 of the Ad Hoc Working Groups on the Durban Platform for Enhanced
Action (ADP), countries had pledged to increase their pre-2020 mitigation efforts to the highest
possible, and were invited to begin preparing their contributions to post-2020 mitigation efforts
(UNFCCC, 2014). Representatives were therefore encouraged to identify and submit their
NAMA pledges after communicating with the LAC Secretariat (UNFCCC, 2014).
In the plenary discussions, the importance of aligning NAMAs with other national processes for
the development of low-emission strategies and policies on sectoral and inter-sectoral levels
was highlighted (UNFCCC, 2014). However, the challenges that were raised had some
representatives perceiving NAMAs as burdensome, as opposed to an accelerator for
sustainable development (UNFCCC, 2014). The challenges identified by representatives were
not at all unfamiliar; the availability of resources, institutional capacity, funding, private sector
engagement, data, and guidance were all discussed (UNFCCC, 2014). Fortunately, solutions
were too.
A common suggestion was for the LAC Secretariat to play a more active role in certain areas
such as “defining financing mechanisms”, “strengthening a regional institute for NAMA
support”, and “engaging the private sector in [NAMA] processes” (UNFCCC, 2014). It was
agreed that private sector engagement should also be supported by national governments to
further promote understanding and thereby investment (UNFCCC, 2014). To further encourage
funding, it was also mentioned that countries should be open to co-financed projects and seek
out multiple potential donors during the design process of NAMAs, so as to avoid “wasted
efforts if support for implementation is limited” (UNFCCC, 2014). Countries were also
encouraged to make national resources available to donors when required; South-South
collaboration was suggested for addressing data issues that could fill in key assessment gaps
and incentivize project funds in a more timely manner (UNFCCC, 2014).
Kelli Ashley Armstrong | kaa2161
Political Economy of Energy and Climate Change Policies | Professor Laurence Tubiana
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REGIONALLY APPROPRIATE MITIGATION ACTIONS (RAMAs)
According to representatives, international donors seek to support “a wide range of NAMAs but
are keen to innovative models and actions that are replicable and provide economies of scale”
(UNFCCC, 2014). This presents a prime opportunity for CARICOM to work along with project
sponsors to develop RAMAs with a focus on the energy sector.
According to World Bank Institute (WBI), the overall goal of RAMAs is to “explore how NAMAs
can be scaled up to achieve economies of scale and lower transaction costs. Existing therein, is
potential co-benefit for small countries to avoid resorting to Clean Development Mechanisms
(CDM) from which they fail to benefit” (UNFCCC, 2014). For example, a representative from
Belize made a presentation on “the potential of utilizing existing CDM-related institutional
agreements for the coordination of NAMA-related activities”; however, due to the “stringency
of CDM verification processes”, the use of them for NAMAs raised concern and was cautioned
against by other representatives (UNFCCC, 2014).
At the LAC regional workshop on NAMAs, the WBI gave a presentation on a RAMA Framework
for Solar Photovoltaics (PV) in the Caribbean (UNFCCC, 2014). The goal of the pilot project is to
“source financial, technological, institutional and legislative support from international agencies
and provide a platform for an exchange of experiences among participating entities” since the
cost of renewables “has decreased dramatically in many regions”; assisting CARICOM with an
opportunity for regional sustainable energy security (UNFCCC, 2014).
EVALUATIONS AND RECOMMENDATIONS
DataBank data from the World Bank covers the time period 1960 to present, but like many
other databases, has many gaps for Caribbean nations and for the region as a whole. This lack
of data on the energy sector in the Caribbean was pointed out by the WorldWatch Institute in
their C-SERMS Phase I Report. However, some broad analyses of CARICOM Energy Policy 2013
can be made using this data. This is particularly true for Trinidad & Tobago, Jamaica and Haiti.
These CARICOM member states have the highest indexes for the energy sector in this dataset.
However, no matter what the suggestion for NAMAs or RAMAs, carbon leakage is likely to
occur. Therefore strategies to mitigate the impacts of this will need to be as innovative as the
NAMAs and RAMAs themselves, if sustainable energy targets are to remain equitable.
As Low et. al. writes “carbon leakage may arise where countries implement asymmetric
policies. When an industry in one country assumes additional costs in order to reduce
greenhouse gas emissions and those same industries in other countries incur lesser (or zero)
costs, this may affect geographical patterns of investment, production and trade. If climate
change related changes in relative costs result in a shift of economic activity to less carbon-
Kelli Ashley Armstrong | kaa2161
Political Economy of Energy and Climate Change Policies | Professor Laurence Tubiana
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constrained jurisdictions, the cost-augmenting environmental effects of the more constrained
activity will be invalidated or at least diminished. Emissions would not be reduced, but simply
shifted […]”.
GDP Intensity
GDP intensity (PPP$ per kg of oil equivalent use) has been increasing in the region; and quite
sharply in the last decade (DataBank). This is more than likely reflective of rising oil costs which
directly impact GDP expenditure in the CARICOM’s developing member states, due to the heavy
reliance of energy consumption on imports (CARICOM, 2013). Though a little higher for Jamaica
and Haiti, alternative energy sources are less than 1% throughout the region (DataBank).
Combustible renewables are particularly high in Haiti because of local charcoal production. This
finding, then begs the question: Will these countries and the other CARICOM member states be
able to reach their energy targets?
Smaller Caribbean states that have been recommended to shift their energy sources to more
than 100% renewable energy by 2027 include Dominica, Grenada, St. Kitts & Nevis, and St.
Vincent & Grenadines (WorldWatch). This recommendation was made due to extremely high
potential for geothermal energy on those volcanic islands that is relatively, and in some cases
absolutely, untapped (WorldWatch). However, these countries also have medium to high
potential for solar, and for some, wind also (WorldWatch). Given all this unrealized potential, a
capacity-building issue is evident.
However this issue is not at all unique to small states in the Caribbean, but the Caribbean at
large. According to C-SERMS most countries have potential for solar, but the best energy
resource projects would more than likely come from an energy mix that includes wind and
hydro. Therefore, energy resource projects would be good for RAMAs. Especially for the benefit
of smaller and poorer nations with limited resources, pooled funding for the necessary
infrastructure and capacity-building to harness this renewable energy would also then be easier
to request.
The fear that the increase in renewable energy might lower oil costs in Caribbean markets and
back fire on the sustainable energy strategy, should other issues take priority for funding (and
they will) is a rational one. Trinidad & Tobago is an oil-producing country, and Haiti is a multi-
hazard environment, that often suffers from disasters. Hourcade and Crassous reiterate, “A
low-carbon strategy is a likely ‘no-regrets’ option, but ‘no-regrets’ is not without effort. The role
of scientists is to provide guidance about where the stumbling blocks are on the pathway and
what could be a well-designed policy mix […] that minimizes the risks of high transition costs”.
Noting that “unilateral action is likely to be inefficient”, Stavins also notes that the “ultimate
test of any greenhouse policy instrument [is for it to prove itself] scientifically effective,
economically rational and politically feasible”. The CARICOM Energy Policy 2013 and its Phase I
C-SERMS will have to pass this test to be successful.
Kelli Ashley Armstrong | kaa2161
Political Economy of Energy and Climate Change Policies | Professor Laurence Tubiana
*MIDTERM DRAFT*
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CO2 Intensity
Despite the rising oil costs and GDP intensity, regional CO2 intensity (kg per kg oil equivalent
energy use) is decreasing (DataBank). This reflects increasing efficiency; which is good news for
regional emissions reductions targets recommended by WorldWatch for C-SERMS Phase I.
However, CO2 intensity is stable in Trinidad & Tobago, and increasing in Jamaica and Haiti
(DataBank). For Trinidad & Tobago, this is not so disappointing, given that they are an oil-
producing developing nation who has been able to keep CO2 emissions relatively stable in the
current energy climate. However, it is recommended that Jamaica and Haiti employ NAMAs to
reduce their CO2 intensity.
According to DataBank, Trinidad, Jamaica and Haiti have the highest sectoral CO2 emissions in
the region. In particular, CO2 emissions from transport and other1
sectors are increasing.
Therefore, it is recommended that NAMAs be directed at the transport sector. Assuming that
these emissions account for those derived from air and sea transport, NAMAs directed at the
transport sector will need to be sensitive towards this since tourism is a major industry
throughout the Caribbean; even though it is also a major consumer of energy (WorldWatch).
This is in light of the fact that, depending on the level or attitude of desperation (as may be
necessary in some states), such an initiative may prompt entry into complicated unilateral
agreements with international institutions that represent various airlines and cruiselines;
perhaps even those involved in shipping. While this would be ambitious, at the same time, it
may also discourage travel to these countries so as to avoid taxes on CO2 intensity.
As Hourcade and Crassous note, “Even those decision makers most inclined to climate-friendly
policies know that some of the suggested measure entail non-negotiable short-term economic
and social costs: early scrapping of existing capital stocks, adverse impacts of carbon prices on
the purchasing power of low-income populations, and impacts on competitiveness […] the
current state of the art can portray conceivable low-carbon futures that are technically and
economically consistent. However, although models produce carbon prices and income levels
for each point in time over a projected period, it is more doubtful whether these values
represent the transition period in a realist manner. Transition problems may magnify mitigation
costs over the short-term: propagation effects across sectors, inertia of capital stocks, political
constraints to compensation, heterogeneity of decision routines in the industrial sector, or
‘misperception’ of the general equilibrium effects” (Hourcade and Crassous).
Stavins also speaks on the issue by saying that, “countries differ dramatically in institutional
structures, resource endowments, levels of industrialization; and their policy makers will
inevitably consider alternative instruments in intensely political environments”.
1
CO2 emissions from other sectors, less residential buildings and commercial and public services, contains the emissions from
commercial/institutional activities, residential, agriculture/forestry, fishing and other emissions not specified elsewhere that are
included in the IPCC Source/Sink Categories 1 A 4 and 1 A 5. (Source: http://data.worldbank.org/indicator/EN.CO2.OTHX.ZS.)
Kelli Ashley Armstrong | kaa2161
Political Economy of Energy and Climate Change Policies | Professor Laurence Tubiana
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However, if this is not an issue, NAMAs can focus on developing the local public transportation
sector by increasing provision and efficiency of services so that they are attractive to Caribbea
citizens and tourists alike.
As Low et. al. point out, “Environmental and comptetitiveness aspects of the situation can be
delinked by possibly increasing greenhouse gas emissions policies in one sector and not the
other. For example, if a steel industry moves to a less constrained country, they can adjust
greenhouse gas emissions policies by making them more stringent in the forestry sector. The
only way to ensure the absence of inter-sectoral consequences would be with an
internationally uniform climate mitigation policy such as carbon tax or a unified carbon price
based on auctioned emission permits. Neither of these policies are likely to see the light of day.
[The objective is to] maximize climate change policy effectiveness, [and] minimize international
friction [by] raising cost of imports and using subsidies; [or] weakening climate change efforts
and undermining the trade system. Mutually beneficial tradeoffs should be identified, and
potential clash points and uncertainties should be reduced and managed” (Low et. al.).
As an incentive, taxes may be implemented on imports for private vehicles. This was done in
the Bahamas to increase government revenue and encourage citizens to purchase private
vehicles from local dealerships. However, the incentive for Trinidad, Jamaica and Haiti would be
to increase government revenue so that they can better be able to improve public
transportation services. By organizing these sectoral improvements to pay for themselves at
little to no cost to their governments who are already strapped for funds to achieve sustainable
development goals, will release some of the burden on the respective countries’ budgets.
Considering that the design and implementation of NAMAs and RAMAs to compliment C-
SERMS will take time, targets will have to flexible enough to accommodate for this but still
stringent enough so that pathways to long-term targets are still achievable. As mentioned by
Tubiana and Guerrin, “Flexibility accommodates new framework conditions, information and
preferences affecting the initially targeted optimum; inclusive of exogenous events, high
unforeseen interactions between instruments, and policy learning. Whereas, Stability (or
rigidity) reduces policy uncertainty by increasing credibility of policy framework, incentivizing
long term investment decisions and hedging policy outcomes in the long term against political
volatility. Flexibility versus stability (or rigidity) suggests the need to find mutually reinforcing
equilibrium, considering interactions between instruments, time periods and governance levels.
[As for approaches to] Broad versus deep [scopes], limit exceptions then increase stringency”
(IDDRI Sciences Po).
DISCUSSION
While CARICOM may not be as seasoned or developed as say, the European Union, when it
Kelli Ashley Armstrong | kaa2161
Political Economy of Energy and Climate Change Policies | Professor Laurence Tubiana
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comes to regional policies, it has a fair track record for the progressive policies established since
their establishment in 1973 (CARICOM, 2014); notably a regional energy policy with ambitious
targets, despite the fact that they are not legally obligated to reduce their emissions given their
small contribution to the world’s total (CARICOM, 2013).
Given the increasing costs of carbon as well as development on energy investment, efficiency,
diversity, and environmental impacts, the security of a sustainable energy future CARICOM
desires will need both mitigation and adaptation. In some senses, taking advantage of
renewable energy resources does both. Taking into account, the limited capacity of the small
island developing states that make up much of the Caribbean, this strategy is certainly wise, but
necessitates additional data and research to establish as best as possible what kind of policy
mix is optimal for CARICOM.
Potential for emissions reductions via NAMAs is realized for the transport sector for CARICOM’s
biggest emitters. As warranted by the NAMA process, this recommendation not only aligns with
C-SERMS targets, but does so on inter-sectoral levels; having benefits in both transportation
and tourism sectors. This is critical because tourism is one of the largest sources of income for
the Caribbean, and so as much sensitivity as feasible – as well as innovation to mitigate it –
must be employed so as to prevent carbon leakage and its damaging effects on national
economies. From a regional perspective, RAMAs in the energy sector provide economies of
scale and can significantly lower energy costs if funding and capacity-building to support
infrastructural developments and improvements are strategically coordinated by CARICOM and
its member states.
The regional political economy in the Caribbean is progressive and willing to make the
necessary changes to its energy sector so that its people have an opportunity to benefit from
being more energy secure. As noted by the World Watch Institute, most of the institutional
frameworks needed on the regional, as well as the national levels are already in place or are
being developed. So long as regional coordination continues and improves to overcome
information, finance and policy barriers as a united front, the sustainable development
CARICOM and its member states desire; particularly for its energy sector, will lead them from a
sustainable path to a sustainable future.
READINGS AND REFERENCES
“Summary for Policy Makers”. Climate Change 2013: The Physical Science Basis. Contribution of Working Group I to the Fifth Assessment Report
of the Intergovernmental Panel on Climate Change [Stocker, T.F., D. Qin, G.-K. Plattner, M. Tignor, S.K. Allen, J. Boschung, A. Nauels, Y. Xia, V.
Bex and P.M. Midgley (eds.)]. Cambridge University Press, Cambridge, United Kingdom and New York, NY, USA, 1535 pp. IPCC, 2013.
“History of the Caribbean Community (CARICOM)”. CARICOM Secretariat, 2011. Accessed 17 March 2014.
http://www.caricom.org/jsp/community/history.jsp?menu=community.
“West Indies Federation”. CARICOM Secretariat, 2011. Accessed 17 March 2014.
http://www.caricom.org/jsp/community/west_indies_federation.jsp?menu=community.
Kelli Ashley Armstrong | kaa2161
Political Economy of Energy and Climate Change Policies | Professor Laurence Tubiana
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“Objectives of the Community”. CARICOM Secretariat, 2011. Accessed 17 March 2014.
http://www.caricom.org/jsp/community/objectives.jsp?menu=community.
“CARICOM Member States”. CARICOM Secretariat, 2011. Accessed 17 March 2014.
http://www.caricom.org/jsp/community/member_states.jsp?menu=community.
“Institutions of the Community”. CARICOM Secretariat, 2011. Accessed 17 March 2014.
http://www.caricom.org/jsp/community/institutions.jsp?menu=community.
“Council for Trade and Economic Development (COTED)”. CARICOM Secretariat, 2011. Accessed 17 March 2014.
http://www.caricom.org/jsp/community_organs/coted.jsp.
“Caribbean Community Climate Change Centre (CCCCC)”. CARICOM Secretariat, 2011. Accessed 17 March 2014.
http://www.caricom.org/jsp/community/ccccc.jsp?menu=community.
“Caribbean Community Energy Policy 2013”. CARICOM, 1 March 2013. Accessed 14 March 2014. http://dms.caribbeanclimate.bz/M-
Files/openfile.aspx?objecttype=0&docid=5562.
Martin et. al. “An assessment of the economic and social impacts of climate change on the energy sector in the Caribbean”. ECLAC, 2013.
Accessed 16 March 2014. http://www.eclac.cl/portofspain/noticias/documentosdetrabajo/8/49708/Energy.pdf.
“The Economics of Climate Change in the Caribbean - Summary Report 2011”. ECLAC, 2011. Accessed 16 March 2014.
http://www.eclac.cl/publicaciones/xml/9/45509/LCARL.299.pdf.
"Report of the Roundtable: Towards a climate change policy for the Caribbean". ECLAC, 2010. Accessed 16 March 2014.
http://www.eclac.cl/publicaciones/xml/9/40419/LCARL.268.pdf.
"The Economics of Climate Change in The Caribbean". Caribbean Development Report Volume III. ECLAC, 2011. Accessed 16 March 2014.
http://www.eclac.cl/publicaciones/xml/2/45412/LCARL.346.pdf.
"A Study on Energy Issues in The Caribbean: Potential for Mitigating Climate Change". ECLAC. 2009. Accessed 16 March 2014.
http://www.eclac.cl/portofspain/publicaciones/xml/8/38238/lcarl233.pdf.
Auth, Katie, Mark Konold, Evan Musolino and Alexander Ochs. "Caribbean Sustainable Energy Roadmap and Strategy, Phase 1: Summary and
Recommendations for Policy Makers". WorldWatch Institute, June 2013. Accessed 16 March 2014.
http://www.worldwatch.org/system/files/nPhase%201%20C-SERMS%20Summary%20for%20Policymakers%20(1).pdf.
“Caribbean Sustainable Energy Roadmap and Strategy”. CARICOM Energy Programme (CCEP), 24 May 2013. Accessed 17 March 2014.
http://www.cc-energyprogramme.org/index.php/component/content/article/2-uncategorised/26-caribbean-sustainable-energy-roadmap-and-
strategy.
Benitez, Pablo. “A Regional NAMA Framework for Solar PV in the Caribbean”. World Bank Institute, December 2013. Accessed 20 March 2014.
http://unfccc.int/files/focus/mitigation/application/pdf/wb-benitez-regional_namas_for_caribbean.pdf.
“Report on the Latin America and Caribbean regional workshop on promoting international collaboration to facilitate the preparation,
submission and implementation of nationally appropriate mitigation actions, Mexico City, 10 to 13 December 2013”.UNFCCC, 21 February
2014. Accessed 20 March 2014. https://unfccc.int/files/focus/mitigation/application/pdf/report_mexico__final_21feb.pdf.
Sudhir, Sharma and Denis Desgain. “Understanding the Concept of Nationally Appropriate Mitigation Actions”. UNEP Risoe Centre, May 2013.
Accessed 20 March 2014. http://www.uneprisoe.org/PUBLICATIONS.aspx.
“Energy and Climate Partnership of the Americas”. CCEP, 28 February 2012. Accessed 20 March 2014. http://www.cc-
energyprogramme.org/index.php/component/content/article/2-uncategorised/40-energy-and-climate-partnership-of-the-americas-ecpa.
“SIDS-DOCK”. CCEP, 28 February 2012. Accessed 20 March 2014. http://www.cc-
energyprogramme.org/index.php/component/content/article/2-uncategorised/46-sids-dock.
Kelli Ashley Armstrong | kaa2161
Political Economy of Energy and Climate Change Policies | Professor Laurence Tubiana
*MIDTERM DRAFT*
13
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Columbia PEECCP Final Paper KAA

  • 1. Kelli Ashley Armstrong | kaa2161 Political Economy of Energy and Climate Change Policies | Professor Laurence Tubiana *MIDTERM DRAFT* 1 “ENERGY AND CLIMATE CHANGE IN THE CARIBBEAN: Strategies and Challenges to Regional Sustainable Energy Development” FINAL OUTLINE INTRODUCTION (page 2) CARICOM Energy Policy 2013 Energy and Climate Change Actions STRATEGIES AND CHALLENGES (page 3) C-SERMS NAMAs RAMAs EVALUATION AND RECOMMENDATIONS (page 7) GDP intensity CO2 intensity DISCUSSION (page 10) READINGS AND REFERENCES (page 11)
  • 2. Kelli Ashley Armstrong | kaa2161 Political Economy of Energy and Climate Change Policies | Professor Laurence Tubiana *MIDTERM DRAFT* 2 INTRODUCTION BACKGROUND The Caribbean Community (CARICOM) was established in 1973 by Barbados, Jamaica, Guyana, and Trinidad & Tobago. To date, CARICOM has 15 Full Member States who are represented by their Heads of Government that sit on boards of various institutions of, within and associated with CARICOM (CARICOM Secretariat, 2011). The goal of these institutions is to consistently work "for the benefit and advancement of its peoples" toward the goal of sustainable development in the Caribbean region; including sustainable development of the energy sector (CARICOM Secretariat, 2011). The primary energy consumption in CARICOM is fossil fuels, which account for over 90% of total energy consumption (CARICOM, 2013). Of the 15 Full Member States, 6 are energy-producers of fossil fuels, hydro-power and wind (CARICOM, 2013). However, energy production in the Caribbean has limited capacity due to its small island developing states (SIDS) (CARICOM, 2013). Trinidad & Tobago is the only "major producer and net exporter of petroleum, petroleum- related products and natural gas"; while other CARICOM Member States mainly only produce enough for local or national consumption (CARICOM, 2013). As a result, consumption of energy in the region far surpasses production, thus making CARICOM a net importer of energy (CARICOM, 2013). Despite its energy consumption habits, CARICOM has relatively small populations when compared to the rest of the world, and thus, contributes very little to total global emissions of greenhouse gases (CARICOM, 2013). As a result of this, CARICOM is not yet legally obligated to reduce their greenhouse gas emissions (CARICOM, 2013). However, because current climate change is due to increasing greenhouse gases in the atmosphere mainly from fossil fuel emissions, and the negative impacts of climate change such as sea level rise and climate extremes are so detrimental to SIDS, CARICOM is seeking to take advantage of the opportunity to be a leader in "migrating to low carbon systems" (CARICOM, 2013). CARICOM ENERGY POLICY 2013 In 2003, CARICOM established a Task Force comprised of Grenada, Guyana and its energy- producing countries to work on producing an energy policy for the region (CARICOM, 2013). Initial recommendations were to address issues of energy security, pricing, purchasing and transportation agreements in relation to fossil fuels (CARICOM, 2013). The Task Force itself, later realized the need for a regional energy policy to also explicitly address energy investments, efficiency, diversity, and environmental impacts; including those related to
  • 3. Kelli Ashley Armstrong | kaa2161 Political Economy of Energy and Climate Change Policies | Professor Laurence Tubiana *MIDTERM DRAFT* 3 climate change (CARICOM, 2013). Ten years later, CARICOM Energy Policy 2013 was approved by the CARICOM Heads of Government. The vision of the CARICOM Energy Policy is "fundamental transformation of the energy sectors of the Member States of the Community through the provision of secure and sustainable supplies of energy in a manner which minimizes energy waste in all sectors, to ensure that all CARICOM citizens have access to modern, clean and reliable energy supplies at affordable and stable prices, and to facilitate growth of internationally competitive regional industries towards achieving sustainable development of the Community" (CARICOM, 2013). As it relates to actions for energy and climate change, the CARICOM Energy Policy is to "establish regional and national targets for the reduction of greenhouse gas emissions in the energy sector and implement appropriate mitigation actions relevant to the energy sector" (CARICOM, 2013). Member states are encouraged to work together to decide on emission reduction targets under the direction of the Caribbean Sustainable Energy Roadmap and Strategy (C-SERMS) which are modelled after commitments to international agreements, such as those under the United Nations Framework Convention on Climate Change (UNFCCC) and the Alliance of Small Island States (AOSIS) (CARICOM, 2013). Nationally Appropriate Mitigation Actions (NAMAs) to reduce emissions are also encouraged, but require national data on emissions, and are voluntary (CARICOM, 2013). Another objective is to "identify projects that could be funded from available sources under the global climate change agenda and make collective representation for funds to be disbursed" (CARICOM, 2013). STRATEGIES AND CHALLENGES CARIBBEAN SUSTAINABLE ENERGY ROADMAP AND STRATEGY (C-SERMS) According to the CARICOM Energy Policy, "the C-SERMS is conceptualized as an updateable, sustainable energy planning, management and implementation framework as well as a communication tool to be developed under the CARICOM Energy Programme (CCEP) in collaboration with CARICOM Member States and other partners" (CARICOM, 2013). The regional's disproportionate dependence on fossil fuels submits it to significant challenges with sustainable energy development due to "volatile oil prices, limited economic development, degraded local resources and failure to establish a precedent for global action to mitigate the long-term consequences of climate change" (CARICOM, 2013). In 2009, CARICOM Heads of Government agreed that a key climate change mitigation strategy was to increase the region's energy efficiency and renewables (CARICOM, 2013). A regionally coordinated approach was found to be feasible "to determine baseline energy efficiency opportunities and renewable energy resource potential"; since most energy challenges and opportunities are common among Member States (CARICOM, 2013; Worldwatch, 2013). For example, the capacity for
  • 4. Kelli Ashley Armstrong | kaa2161 Political Economy of Energy and Climate Change Policies | Professor Laurence Tubiana *MIDTERM DRAFT* 4 energy production from renewables is realized in Belize, Jamaica, Suriname, and St. Kitts & Nevis; however, it was discovered that other Caribbean countries also have great potential for exploitation, but lack capacity for development (CARICOM, 2013; Worldwatch, 2013). Regional cooperation is also imperative to achieve the warranted transformation of the Caribbean energy sector (Worldwatch, 2013). To this end, a sustainable energy roadmap was developed to guide the region in its transition to a more sustainable energy sector (CARICOM, 2013). In 2010, it was agreed that the roadmap would also include a coherent strategy to give further direction to Member States, and ensure their engagement and participation in implementation (CARICOM, 2013; Worldwatch, 2013; CCEP, 2013). A summary and recommendations for policy makers on the first phase of C-SERMS was produced by the Worldwatch Institute (Worldwatch, 2013). In the report, based on initial assessments, Worldwatch identifies energy challenges across sectors, including power, transportation and tourism; the largest energy consumers in CARICOM Member States (Worldwatch, 2013). Worldwatch also explores the feasibility of energy reform including the further development of current energy-producing renewables being used by Member States, in addition to geothermal and biomass. As a result of their assessment, Worldwatch put forward ambitious short, medium and long term regional and national targets for energy sustainability (Worldwatch, 2013). They are outlined in the table below: 2017 2022 2027 Regional Sustainability Targets (%) Renewables 20 28 47 Energy Intensity Reductions 33 CO2 Emissions Reductions* 18 32 36 National Sustainability Targets (CO2 Emissions Reductions only) (%)** Antigua and Barbuda 62 The Bahamas 53 Barbados*** 61 Belize*** 62 Dominica 100
  • 5. Kelli Ashley Armstrong | kaa2161 Political Economy of Energy and Climate Change Policies | Professor Laurence Tubiana *MIDTERM DRAFT* 5 Grenada 100 Guyana 82 Haiti 44 Jamaica*** 51 Montserrat 100 Saint Kitts and Nevis*** 100 Saint Lucia 100 Saint Vincent and the Grenadines 78 Suriname*** 43 Trinidad and Tobago*** 29 Source: Table created by author, adapted from Worldwatch (2013). * carbon dioxide emissions reduction in the power sector against ‘business-as-usual’ (BAU) ** estimated carbon dioxide emissions reduction in the power sector against BAU in 2027 ***energy-producing Member States (CARICOM, 2013). Recognising that "sustainable energy development is limited by policy and data gaps, administrative ineffectiveness and often inefficient and uncoordinated implementation efforts", Worldwatch noted that while the the targets are ambitious, they are feasible if the commitments are upheld with a long term vision of sustainability, supported by already existing national, regional and international policies, best practices and good governance (Worldwatch, 2013). According to Worldwatch, there are unique "information, finance, policy and capacity barriers" at national and regional levels, but regional coordination through the CARICOM Energy Policy and C-SERMS are "critical steps toward a more comprehensive sustainable energy plan for the region" (Worldwatch, 2013). NATIONALLY APPROPRIATE MITIGATION ACTIONS (NAMAs) Given that not every country can feasibly mitigate greenhouse gas emissions in the same manner due to financial, capacity or other constraints, the critical importance of NAMAs is recognized as a key element to reducing emissions in developing countries; providing them the opportunity to “structure and promote their emission reduction efforts” (UNEP Risoe Centre, 2013). While this is widely understood, the international climate negotiations under the UNFCCC, from which NAMAs were derived, have yet to officially define them or clarify
  • 6. Kelli Ashley Armstrong | kaa2161 Political Economy of Energy and Climate Change Policies | Professor Laurence Tubiana *MIDTERM DRAFT* 6 mechanisms and guidelines for Measurements, Reporting and Verification (MRV) (UNEP Risoe Centre, 2013). As stated in the UNEP Risoe Centre’s guide to Understanding the Concept of Nationally Appropriate Mitigation Action, “it is expected that clarity on some of these aspects will emerge from bottom-up based experiences of countries when developing and implementing NAMAs” (UNEP Risoe Centre, 2013). In an attempt to do just that, representatives from Latin America and Caribbean (LAC) countries were hosted at a “regional workshop on promoting international collaboration to facilitate the preparation, submission and implementation of NAMAs in 2013 (UNFCCC, 2014). Representatives were reminded that their countries had the opportunity to participate in the NAMA process in two ways: politically and technically. (UNFCCC, 2014). Politically, meant that a country would submit NAMAs by responding to an open invitation by the Conference of the Parties (COP) (UNFCCC, 2104). Technically, meant that a country would submit to the NAMAs’ online registry “for recognition of NAMAs seeking support for their preparation and/or implementation” (UNFCCC, 2014). Representatives were also reminded that under Workstreams 1 and 2 of the Ad Hoc Working Groups on the Durban Platform for Enhanced Action (ADP), countries had pledged to increase their pre-2020 mitigation efforts to the highest possible, and were invited to begin preparing their contributions to post-2020 mitigation efforts (UNFCCC, 2014). Representatives were therefore encouraged to identify and submit their NAMA pledges after communicating with the LAC Secretariat (UNFCCC, 2014). In the plenary discussions, the importance of aligning NAMAs with other national processes for the development of low-emission strategies and policies on sectoral and inter-sectoral levels was highlighted (UNFCCC, 2014). However, the challenges that were raised had some representatives perceiving NAMAs as burdensome, as opposed to an accelerator for sustainable development (UNFCCC, 2014). The challenges identified by representatives were not at all unfamiliar; the availability of resources, institutional capacity, funding, private sector engagement, data, and guidance were all discussed (UNFCCC, 2014). Fortunately, solutions were too. A common suggestion was for the LAC Secretariat to play a more active role in certain areas such as “defining financing mechanisms”, “strengthening a regional institute for NAMA support”, and “engaging the private sector in [NAMA] processes” (UNFCCC, 2014). It was agreed that private sector engagement should also be supported by national governments to further promote understanding and thereby investment (UNFCCC, 2014). To further encourage funding, it was also mentioned that countries should be open to co-financed projects and seek out multiple potential donors during the design process of NAMAs, so as to avoid “wasted efforts if support for implementation is limited” (UNFCCC, 2014). Countries were also encouraged to make national resources available to donors when required; South-South collaboration was suggested for addressing data issues that could fill in key assessment gaps and incentivize project funds in a more timely manner (UNFCCC, 2014).
  • 7. Kelli Ashley Armstrong | kaa2161 Political Economy of Energy and Climate Change Policies | Professor Laurence Tubiana *MIDTERM DRAFT* 7 REGIONALLY APPROPRIATE MITIGATION ACTIONS (RAMAs) According to representatives, international donors seek to support “a wide range of NAMAs but are keen to innovative models and actions that are replicable and provide economies of scale” (UNFCCC, 2014). This presents a prime opportunity for CARICOM to work along with project sponsors to develop RAMAs with a focus on the energy sector. According to World Bank Institute (WBI), the overall goal of RAMAs is to “explore how NAMAs can be scaled up to achieve economies of scale and lower transaction costs. Existing therein, is potential co-benefit for small countries to avoid resorting to Clean Development Mechanisms (CDM) from which they fail to benefit” (UNFCCC, 2014). For example, a representative from Belize made a presentation on “the potential of utilizing existing CDM-related institutional agreements for the coordination of NAMA-related activities”; however, due to the “stringency of CDM verification processes”, the use of them for NAMAs raised concern and was cautioned against by other representatives (UNFCCC, 2014). At the LAC regional workshop on NAMAs, the WBI gave a presentation on a RAMA Framework for Solar Photovoltaics (PV) in the Caribbean (UNFCCC, 2014). The goal of the pilot project is to “source financial, technological, institutional and legislative support from international agencies and provide a platform for an exchange of experiences among participating entities” since the cost of renewables “has decreased dramatically in many regions”; assisting CARICOM with an opportunity for regional sustainable energy security (UNFCCC, 2014). EVALUATIONS AND RECOMMENDATIONS DataBank data from the World Bank covers the time period 1960 to present, but like many other databases, has many gaps for Caribbean nations and for the region as a whole. This lack of data on the energy sector in the Caribbean was pointed out by the WorldWatch Institute in their C-SERMS Phase I Report. However, some broad analyses of CARICOM Energy Policy 2013 can be made using this data. This is particularly true for Trinidad & Tobago, Jamaica and Haiti. These CARICOM member states have the highest indexes for the energy sector in this dataset. However, no matter what the suggestion for NAMAs or RAMAs, carbon leakage is likely to occur. Therefore strategies to mitigate the impacts of this will need to be as innovative as the NAMAs and RAMAs themselves, if sustainable energy targets are to remain equitable. As Low et. al. writes “carbon leakage may arise where countries implement asymmetric policies. When an industry in one country assumes additional costs in order to reduce greenhouse gas emissions and those same industries in other countries incur lesser (or zero) costs, this may affect geographical patterns of investment, production and trade. If climate change related changes in relative costs result in a shift of economic activity to less carbon-
  • 8. Kelli Ashley Armstrong | kaa2161 Political Economy of Energy and Climate Change Policies | Professor Laurence Tubiana *MIDTERM DRAFT* 8 constrained jurisdictions, the cost-augmenting environmental effects of the more constrained activity will be invalidated or at least diminished. Emissions would not be reduced, but simply shifted […]”. GDP Intensity GDP intensity (PPP$ per kg of oil equivalent use) has been increasing in the region; and quite sharply in the last decade (DataBank). This is more than likely reflective of rising oil costs which directly impact GDP expenditure in the CARICOM’s developing member states, due to the heavy reliance of energy consumption on imports (CARICOM, 2013). Though a little higher for Jamaica and Haiti, alternative energy sources are less than 1% throughout the region (DataBank). Combustible renewables are particularly high in Haiti because of local charcoal production. This finding, then begs the question: Will these countries and the other CARICOM member states be able to reach their energy targets? Smaller Caribbean states that have been recommended to shift their energy sources to more than 100% renewable energy by 2027 include Dominica, Grenada, St. Kitts & Nevis, and St. Vincent & Grenadines (WorldWatch). This recommendation was made due to extremely high potential for geothermal energy on those volcanic islands that is relatively, and in some cases absolutely, untapped (WorldWatch). However, these countries also have medium to high potential for solar, and for some, wind also (WorldWatch). Given all this unrealized potential, a capacity-building issue is evident. However this issue is not at all unique to small states in the Caribbean, but the Caribbean at large. According to C-SERMS most countries have potential for solar, but the best energy resource projects would more than likely come from an energy mix that includes wind and hydro. Therefore, energy resource projects would be good for RAMAs. Especially for the benefit of smaller and poorer nations with limited resources, pooled funding for the necessary infrastructure and capacity-building to harness this renewable energy would also then be easier to request. The fear that the increase in renewable energy might lower oil costs in Caribbean markets and back fire on the sustainable energy strategy, should other issues take priority for funding (and they will) is a rational one. Trinidad & Tobago is an oil-producing country, and Haiti is a multi- hazard environment, that often suffers from disasters. Hourcade and Crassous reiterate, “A low-carbon strategy is a likely ‘no-regrets’ option, but ‘no-regrets’ is not without effort. The role of scientists is to provide guidance about where the stumbling blocks are on the pathway and what could be a well-designed policy mix […] that minimizes the risks of high transition costs”. Noting that “unilateral action is likely to be inefficient”, Stavins also notes that the “ultimate test of any greenhouse policy instrument [is for it to prove itself] scientifically effective, economically rational and politically feasible”. The CARICOM Energy Policy 2013 and its Phase I C-SERMS will have to pass this test to be successful.
  • 9. Kelli Ashley Armstrong | kaa2161 Political Economy of Energy and Climate Change Policies | Professor Laurence Tubiana *MIDTERM DRAFT* 9 CO2 Intensity Despite the rising oil costs and GDP intensity, regional CO2 intensity (kg per kg oil equivalent energy use) is decreasing (DataBank). This reflects increasing efficiency; which is good news for regional emissions reductions targets recommended by WorldWatch for C-SERMS Phase I. However, CO2 intensity is stable in Trinidad & Tobago, and increasing in Jamaica and Haiti (DataBank). For Trinidad & Tobago, this is not so disappointing, given that they are an oil- producing developing nation who has been able to keep CO2 emissions relatively stable in the current energy climate. However, it is recommended that Jamaica and Haiti employ NAMAs to reduce their CO2 intensity. According to DataBank, Trinidad, Jamaica and Haiti have the highest sectoral CO2 emissions in the region. In particular, CO2 emissions from transport and other1 sectors are increasing. Therefore, it is recommended that NAMAs be directed at the transport sector. Assuming that these emissions account for those derived from air and sea transport, NAMAs directed at the transport sector will need to be sensitive towards this since tourism is a major industry throughout the Caribbean; even though it is also a major consumer of energy (WorldWatch). This is in light of the fact that, depending on the level or attitude of desperation (as may be necessary in some states), such an initiative may prompt entry into complicated unilateral agreements with international institutions that represent various airlines and cruiselines; perhaps even those involved in shipping. While this would be ambitious, at the same time, it may also discourage travel to these countries so as to avoid taxes on CO2 intensity. As Hourcade and Crassous note, “Even those decision makers most inclined to climate-friendly policies know that some of the suggested measure entail non-negotiable short-term economic and social costs: early scrapping of existing capital stocks, adverse impacts of carbon prices on the purchasing power of low-income populations, and impacts on competitiveness […] the current state of the art can portray conceivable low-carbon futures that are technically and economically consistent. However, although models produce carbon prices and income levels for each point in time over a projected period, it is more doubtful whether these values represent the transition period in a realist manner. Transition problems may magnify mitigation costs over the short-term: propagation effects across sectors, inertia of capital stocks, political constraints to compensation, heterogeneity of decision routines in the industrial sector, or ‘misperception’ of the general equilibrium effects” (Hourcade and Crassous). Stavins also speaks on the issue by saying that, “countries differ dramatically in institutional structures, resource endowments, levels of industrialization; and their policy makers will inevitably consider alternative instruments in intensely political environments”. 1 CO2 emissions from other sectors, less residential buildings and commercial and public services, contains the emissions from commercial/institutional activities, residential, agriculture/forestry, fishing and other emissions not specified elsewhere that are included in the IPCC Source/Sink Categories 1 A 4 and 1 A 5. (Source: http://data.worldbank.org/indicator/EN.CO2.OTHX.ZS.)
  • 10. Kelli Ashley Armstrong | kaa2161 Political Economy of Energy and Climate Change Policies | Professor Laurence Tubiana *MIDTERM DRAFT* 10 However, if this is not an issue, NAMAs can focus on developing the local public transportation sector by increasing provision and efficiency of services so that they are attractive to Caribbea citizens and tourists alike. As Low et. al. point out, “Environmental and comptetitiveness aspects of the situation can be delinked by possibly increasing greenhouse gas emissions policies in one sector and not the other. For example, if a steel industry moves to a less constrained country, they can adjust greenhouse gas emissions policies by making them more stringent in the forestry sector. The only way to ensure the absence of inter-sectoral consequences would be with an internationally uniform climate mitigation policy such as carbon tax or a unified carbon price based on auctioned emission permits. Neither of these policies are likely to see the light of day. [The objective is to] maximize climate change policy effectiveness, [and] minimize international friction [by] raising cost of imports and using subsidies; [or] weakening climate change efforts and undermining the trade system. Mutually beneficial tradeoffs should be identified, and potential clash points and uncertainties should be reduced and managed” (Low et. al.). As an incentive, taxes may be implemented on imports for private vehicles. This was done in the Bahamas to increase government revenue and encourage citizens to purchase private vehicles from local dealerships. However, the incentive for Trinidad, Jamaica and Haiti would be to increase government revenue so that they can better be able to improve public transportation services. By organizing these sectoral improvements to pay for themselves at little to no cost to their governments who are already strapped for funds to achieve sustainable development goals, will release some of the burden on the respective countries’ budgets. Considering that the design and implementation of NAMAs and RAMAs to compliment C- SERMS will take time, targets will have to flexible enough to accommodate for this but still stringent enough so that pathways to long-term targets are still achievable. As mentioned by Tubiana and Guerrin, “Flexibility accommodates new framework conditions, information and preferences affecting the initially targeted optimum; inclusive of exogenous events, high unforeseen interactions between instruments, and policy learning. Whereas, Stability (or rigidity) reduces policy uncertainty by increasing credibility of policy framework, incentivizing long term investment decisions and hedging policy outcomes in the long term against political volatility. Flexibility versus stability (or rigidity) suggests the need to find mutually reinforcing equilibrium, considering interactions between instruments, time periods and governance levels. [As for approaches to] Broad versus deep [scopes], limit exceptions then increase stringency” (IDDRI Sciences Po). DISCUSSION While CARICOM may not be as seasoned or developed as say, the European Union, when it
  • 11. Kelli Ashley Armstrong | kaa2161 Political Economy of Energy and Climate Change Policies | Professor Laurence Tubiana *MIDTERM DRAFT* 11 comes to regional policies, it has a fair track record for the progressive policies established since their establishment in 1973 (CARICOM, 2014); notably a regional energy policy with ambitious targets, despite the fact that they are not legally obligated to reduce their emissions given their small contribution to the world’s total (CARICOM, 2013). Given the increasing costs of carbon as well as development on energy investment, efficiency, diversity, and environmental impacts, the security of a sustainable energy future CARICOM desires will need both mitigation and adaptation. In some senses, taking advantage of renewable energy resources does both. Taking into account, the limited capacity of the small island developing states that make up much of the Caribbean, this strategy is certainly wise, but necessitates additional data and research to establish as best as possible what kind of policy mix is optimal for CARICOM. Potential for emissions reductions via NAMAs is realized for the transport sector for CARICOM’s biggest emitters. As warranted by the NAMA process, this recommendation not only aligns with C-SERMS targets, but does so on inter-sectoral levels; having benefits in both transportation and tourism sectors. This is critical because tourism is one of the largest sources of income for the Caribbean, and so as much sensitivity as feasible – as well as innovation to mitigate it – must be employed so as to prevent carbon leakage and its damaging effects on national economies. From a regional perspective, RAMAs in the energy sector provide economies of scale and can significantly lower energy costs if funding and capacity-building to support infrastructural developments and improvements are strategically coordinated by CARICOM and its member states. The regional political economy in the Caribbean is progressive and willing to make the necessary changes to its energy sector so that its people have an opportunity to benefit from being more energy secure. As noted by the World Watch Institute, most of the institutional frameworks needed on the regional, as well as the national levels are already in place or are being developed. So long as regional coordination continues and improves to overcome information, finance and policy barriers as a united front, the sustainable development CARICOM and its member states desire; particularly for its energy sector, will lead them from a sustainable path to a sustainable future. READINGS AND REFERENCES “Summary for Policy Makers”. Climate Change 2013: The Physical Science Basis. Contribution of Working Group I to the Fifth Assessment Report of the Intergovernmental Panel on Climate Change [Stocker, T.F., D. Qin, G.-K. Plattner, M. Tignor, S.K. Allen, J. Boschung, A. Nauels, Y. Xia, V. Bex and P.M. Midgley (eds.)]. Cambridge University Press, Cambridge, United Kingdom and New York, NY, USA, 1535 pp. IPCC, 2013. “History of the Caribbean Community (CARICOM)”. CARICOM Secretariat, 2011. Accessed 17 March 2014. http://www.caricom.org/jsp/community/history.jsp?menu=community. “West Indies Federation”. CARICOM Secretariat, 2011. Accessed 17 March 2014. http://www.caricom.org/jsp/community/west_indies_federation.jsp?menu=community.
  • 12. Kelli Ashley Armstrong | kaa2161 Political Economy of Energy and Climate Change Policies | Professor Laurence Tubiana *MIDTERM DRAFT* 12 “Objectives of the Community”. CARICOM Secretariat, 2011. Accessed 17 March 2014. http://www.caricom.org/jsp/community/objectives.jsp?menu=community. “CARICOM Member States”. CARICOM Secretariat, 2011. Accessed 17 March 2014. http://www.caricom.org/jsp/community/member_states.jsp?menu=community. “Institutions of the Community”. CARICOM Secretariat, 2011. Accessed 17 March 2014. http://www.caricom.org/jsp/community/institutions.jsp?menu=community. “Council for Trade and Economic Development (COTED)”. CARICOM Secretariat, 2011. Accessed 17 March 2014. http://www.caricom.org/jsp/community_organs/coted.jsp. “Caribbean Community Climate Change Centre (CCCCC)”. CARICOM Secretariat, 2011. Accessed 17 March 2014. http://www.caricom.org/jsp/community/ccccc.jsp?menu=community. “Caribbean Community Energy Policy 2013”. CARICOM, 1 March 2013. Accessed 14 March 2014. http://dms.caribbeanclimate.bz/M- Files/openfile.aspx?objecttype=0&docid=5562. Martin et. al. “An assessment of the economic and social impacts of climate change on the energy sector in the Caribbean”. ECLAC, 2013. Accessed 16 March 2014. http://www.eclac.cl/portofspain/noticias/documentosdetrabajo/8/49708/Energy.pdf. “The Economics of Climate Change in the Caribbean - Summary Report 2011”. ECLAC, 2011. Accessed 16 March 2014. http://www.eclac.cl/publicaciones/xml/9/45509/LCARL.299.pdf. "Report of the Roundtable: Towards a climate change policy for the Caribbean". ECLAC, 2010. Accessed 16 March 2014. http://www.eclac.cl/publicaciones/xml/9/40419/LCARL.268.pdf. "The Economics of Climate Change in The Caribbean". Caribbean Development Report Volume III. ECLAC, 2011. Accessed 16 March 2014. http://www.eclac.cl/publicaciones/xml/2/45412/LCARL.346.pdf. "A Study on Energy Issues in The Caribbean: Potential for Mitigating Climate Change". ECLAC. 2009. Accessed 16 March 2014. http://www.eclac.cl/portofspain/publicaciones/xml/8/38238/lcarl233.pdf. Auth, Katie, Mark Konold, Evan Musolino and Alexander Ochs. "Caribbean Sustainable Energy Roadmap and Strategy, Phase 1: Summary and Recommendations for Policy Makers". WorldWatch Institute, June 2013. Accessed 16 March 2014. http://www.worldwatch.org/system/files/nPhase%201%20C-SERMS%20Summary%20for%20Policymakers%20(1).pdf. “Caribbean Sustainable Energy Roadmap and Strategy”. CARICOM Energy Programme (CCEP), 24 May 2013. Accessed 17 March 2014. http://www.cc-energyprogramme.org/index.php/component/content/article/2-uncategorised/26-caribbean-sustainable-energy-roadmap-and- strategy. Benitez, Pablo. “A Regional NAMA Framework for Solar PV in the Caribbean”. World Bank Institute, December 2013. Accessed 20 March 2014. http://unfccc.int/files/focus/mitigation/application/pdf/wb-benitez-regional_namas_for_caribbean.pdf. “Report on the Latin America and Caribbean regional workshop on promoting international collaboration to facilitate the preparation, submission and implementation of nationally appropriate mitigation actions, Mexico City, 10 to 13 December 2013”.UNFCCC, 21 February 2014. Accessed 20 March 2014. https://unfccc.int/files/focus/mitigation/application/pdf/report_mexico__final_21feb.pdf. Sudhir, Sharma and Denis Desgain. “Understanding the Concept of Nationally Appropriate Mitigation Actions”. UNEP Risoe Centre, May 2013. Accessed 20 March 2014. http://www.uneprisoe.org/PUBLICATIONS.aspx. “Energy and Climate Partnership of the Americas”. CCEP, 28 February 2012. Accessed 20 March 2014. http://www.cc- energyprogramme.org/index.php/component/content/article/2-uncategorised/40-energy-and-climate-partnership-of-the-americas-ecpa. “SIDS-DOCK”. CCEP, 28 February 2012. Accessed 20 March 2014. http://www.cc- energyprogramme.org/index.php/component/content/article/2-uncategorised/46-sids-dock.
  • 13. Kelli Ashley Armstrong | kaa2161 Political Economy of Energy and Climate Change Policies | Professor Laurence Tubiana *MIDTERM DRAFT* 13 “A Low Carbon Development Strategy (LCDS): Transforming Guyana’s Economy While Combating Climate Change”. Office of The President, Republic of Guyana, June 2009. Accessed 20 March 2014. http://www.lcds.gov.gy/images/stories/Documents/LCDS.pdf. Clapp, Christer, Gregory Briner and Katia Karousakis. “Low-Emission Development Strategies (LEDS): Technical, Institutional and Policy Lessons”. Organisation for Economic Co-operation and Development (OECD)/International Energy Agency (IEA), 22 November 2010. Accessed 20 March 2014. http://www.oecd.org/environment/cc/46553489.pdf. >> Reference to Guyana’s Low-Carbon Development Strategy, pg. 26 "Caribbean Carbon Neutral Tourism Program: Assessment of Financing Mechanisms for Low Carbon Development in the Tourism Sector". Caribbean Community Climate Change Centre (CCCCC), June 2012. Accessed 14 March 2014. http://dms.caribbeanclimate.bz/M- Files/openfile.aspx?objecttype=0&docid=5424. Bahamas Information Services (BIS) Updates. “Bahamas Legislation to Regulate Vehicle Emissions”. TheBahamasWeekly.com, 12 March 2014. Accessed 20 March 2014. http://www.thebahamasweekly.com/publish/bis-news- updates/Bahamas_Legislation_to_Regulate_Vehicle_Emissions33727.shtml. “Environmental Health (Vehicle Emissions) Regulations, 2013”. Environment Health Services Act (Chapter 232). Department of Environmental Health, Ministry of Environment and Housing, Bahamas Government, 2013. Accessed 20 March 2014. http://www.thebahamasweekly.com/uploads/14/Vehicle_Emissions.pdf. DataBank. “World Development Indicators”. The World Bank. Accessed 17 May 2014. http://databank.worldbank.org/data/views/reports/tableview.aspx#. Hourcade, Jean-Charles and Reanud Crassous.“Low-Carbon Societies: a challenging transition for an attractive future”. Climate Policy 8 (2007). Pizer, William A. “Optimal Choice of Policy Instrument and Stringency under Uncertainty: The Case of Climate Change”. Resources for the Future (1997). Stavins, Robert A. “Policy Instruments for Climate Change: How Can National Governments Address a Global Problem?” Resources for the Future (1997). IDDRI Sciences Po. “Session 4: Emissions reductions policies”. SUMA K4165: Political Economy of Energy and Climate Change Policies, Columbia University in the City of New York. 6 February 2014. Low, Patrick, Gabrielle Marceau and Julia Reinaud. “The Interface Between the Trade and Climate Change Policy Regimes: Scoping the Issues”. World Trade Organization Economic Research and Statistics Division. 12 January 2011.