Tides of Change
Small island nations, while often rich in sunshine, sand, and tropical excess, can also be described as some of the most petroleum-dependent countries in the world. As of July 2012, all islands within the Caribbean were net oil importers with oil providing upwards of 90 percent of primary energy needs, more than twice the global average. These small island economies are highly sensitive to the dependence on and volatility of foreign oil. Directly, a reliance on oil importation can cause a weakening trade balance and indirectly can play a major role in inflation.
The small island of Aruba, located in the southern Caribbean just 18 miles north of Venezuela, is no stranger to the economic impacts of oil dependency. What separates Aruba from other island nations is the distinct leadership and vision enacted by current Prime Minister (PM) Mike Eman. Prior to 2012, Aruba was spending on the order of 16% of its total economy in an effort to import 6500 barrels of diesel a day. Coupled with this reliance on oil, the citizens of Aruba had to endure a decade of tripling energy prices and associated rise in water and food costs.
While previous solutions to financial woes were focused on the maximization of tourist dollars, adding more hotels and incentivizing vacationers to the island, PM Eman had a different vision for Aruba. PM Eman argued that by keeping the number of hotel rooms constant, you could increase the relative scarcity and exclusivity of the island thereby increasing wealth for the hospitality industry. He argued that sustainable economic growth requires a diverse base. His widespread and novel outlook for the island included the transition to renewable energies, in an attempt to develop stronger communities and a sustainable economy while protecting the quality of the environment. In response to criticism regarding the economic feasibility of sustainability and renewable energy systems, PM Eman cited the following lines from the late Senator Robert F Kennedy:
“Yet the gross national product does not allow for the health of our children, the quality of their education, or the joy of their play. It does not include the beauty of our poetry or the strength of our marriages, the intelligence of our public debate or the integrity of our public officials. It measures neither our wit nor out courage, neither our wisdom nor our learning, neither our compassion nor our devotion to our country; it measures everything in short, except that which makes life worthwhile. (Robert F Kennedy Address, University of Kansas, Lawrence, Kansas, March 18th, 1968)”
In conjunction with The Netherlands Organization for Applied Scientific Research (TNO), Aruba commenced the development of the Aruban Sustainable Research Institute (ASRI). ASRI would serve to foster the testing of new technological inventions in the area of photovoltaic (PV) applications, wind energy generation, and other innovative technologies such as wave energy. Further, ASRI stood to promote the “Green Gateway” vision by serving as a regional hub for economic and technological relations between Europe and the Caribbean.
With ASRI operating as a developmental platform for Aruba’s renewable energy technologies, PM Eman at the Rio Earth Summit in 2012 announced that Aruba would plan to transition to 100% renewables by 2020. While most would not argue the environmental benefits of renewable technologies, many remain steadfast concerning the economic burdens of investing in renewable energies arguing that they simply are not profitable. With the US subsidizing solar and wind energy at $24.34 and $23.37 per mWh respectively (per 2008), these groups contend that renewables do not have the ability to produce large enough volumes of energy at competitive pricing for a developing economy. However, the model currently being set forth by Aruba begs to differ.
Partnering with the Rocky Mountain Institute, a US based energy group, and the NGO Carbon War Room, Aruba’s first step towards a sustainable economy was to transition away from outdated steam engines and adjust the nation’s desalinization process. While costing approximately 300 million dollars, Aruba was able to halve its fuel consumption and save approximately 85 million dollars alone in the first year. In its next step towards energy independence, Aruba signed a memorandum of understanding (MoU), a convergence of will between two parties, with BYD Company Limited outlining the measures that would be taken to ensure Aruba’s plans of becoming the first nation with a zero-carbon footprint. The MoU summarizes four principal objectives, including the transition of public transportation to electrical power, a substantial increase in both solar and wind energy generation, increasing renewable energy storage capacity as to make energy systems more dispatchable, and instituting a nation-wide plan for public re-education regarding sustainability. Under these policies, Aruba is currently on track to become energy independent by 2020.
As the installation and integration of renewable energy systems into Aruban infrastructure increases, the benefits continue to roll in. Electricity prices have dropped nearly 25% since 2009 and are finally stable with the nation observing a reversal in inflation as well. An indirect effect of these economic advances is an increase in childhood health, as it now costs less for families to pay for sports. Further, it seems as though tourists are keener on visiting a green island. In 2013 alone, stay-over visitors grew from 721,000 to 929,000 and the number of cruise ship passengers to the island were up by 400,000.
Despite clamor from some groups regarding the economic drawbacks of renewable energy, Aruba has demonstrated the ability to thrive under a transitional period to 100% renewables noting nothing but positive impacts on both a social and economic level. The impacts observed in Aruba raise the question as to why more countries, both developing and developed, are not following a similar plan to a zero-carbon footprint. While these small island nations posses a higher incentive to rid themselves of fossil fuel dependence, oil probably holds less of political presence on these islands than it does in more developed nations. And while the Caribbean emits less than 1% of total greenhouse gasses, they will face the brunt of climate change when it comes to rising sea levels and more frequent and intense hurricanes. In the near future, it will be interesting to observe whether smaller nations that have yet to fully develop their energy infrastructure and less of an overall oil presence will overtake developed nations in terms of renewable energy use.
Ten Island Challenge & Small Island Developing States (SIDS)
While change in the developed world may be slow, many nations within the Caribbean are eager to follow Aruba’s lead. In conjunction with Aruba, the British Virgin Islands, Dominica, St Kitts and Nevis, Grenada, St Lucia, Turks and Caicos, Providencia, and San Andreas have all joined the Carbon War Room’s ‘Ten Island Challenge’. The partnership has been implemented to identify and address both the technical and commercial barriers common to low-carbon energy installation in hopes of accelerating energy transition within the Caribbean.
The challenges preventing small island nations from investing in sustainable technologies are two-fold. First, many islands are locked into long-term utility contracts with foreign energy suppliers, often negotiated such that the utility companies can guarantee themselves a hefty profit. Some nations within the Caribbean pay upwards of four times per kilowatt-hour for electricity when compared to the United States or Europe. Secondly, it can be difficult for these small islands to acquire the capital needed to invest in renewable energies. While replacing imported oil with lower cost renewables will ultimately pay for itself, banks are much more likely to provide a loan if repayment is based upon increased revenue from hospitality and tourism. As a result, the Caribbean as a whole has implemented very little in terms of renewable energy to date.
The Carbon War Room (CWR) describes itself as a global nonprofit, whose goal is to accelerate the adoption of business solutions that reduce carbon emissions and promote low-carbon economies. Partnered with the Rocky Mountain Institute (RMI), an independent non-profit think-tank, CWR and RMI aim to identify each island’s optimum energy strategy. The idea is to develop a framework that drives the employment of renewables while catalyzing the flow of capital to development. All with the ultimate goal of increasing renewable capacity across the region and laying the foundation for future project planning, design, and implementation.
The Caribbean is not the only alliance of small islands that are shifting their attention to sustainable development. Other low-lying coastal countries around the globe are beginning to recognize the unique vulnerabilities inherent to their homeland in regards to impending climate change and an overall reliance on fossil fuels. Thus, a collection of 58 nations, coined Small Island Developing States (SIDS), comprising islands from Africa, the Caribbean, Indian Ocean, and the Pacific have partnered in a coalition to collaborate on methods of improving energy efficiency and developing other forms of clean power.
A Sustainable Future
Despite isolation, limited resources, both technological, financial, and human capital, small island nations are writing their own stories in regards to a sustainable future. Unlike developed nations who often work independently to suit specific national needs, these smaller scale developing nations have recognized communal challenges among their island nations and have unified to strive for a greener future.
The ability to cross political lines and work towards a joint goal may be more instinctive to island nations given their unique cultural backgrounds. The vibrant and distinct cultures of SIDS promote a family environment endorsing more intimate relations in business. These environments stimulate a ‘how can I strengthen the group’ type atmosphere which will go a long way in leading SIDS to a sustainable future. In contrast, more developed nations seem to be founded upon a capitalistic mind set of ‘what can you do for me or how can I profit from this’ which may in fact hinder the future sustainability of the world given the power these developed juggernauts possess. It is backwards to think but extremely probable that sometime in the near future, SIDS may develop into the model for a sustainable and profitable future despite the huge limitations handicapping each of their individual nations.