Category: Government

This 2016 photo shows erosion along the beach in Annotto Bay, St Mary, due to high waves.

A warning has been issued to governments across the Caribbean, including Jamaica, to do more to make countries resilient to climate change as there is a price to pay if nothing is done.

According to a report commissioned by the Commonwealth Marine Economies Programme, the Caribbean is “in the front line” and at greater risk from more severe impacts than many other parts of the world because of its geographic location as most regional states are smaller islands where people live close to and depend on the sea.

The Caribbean Marine Climate Change Report Card 2017, which was conducted by scientists and researchers, said more intense storms, floods, droughts, rising sea levels, higher temperatures, and ocean acidification are major threats to all regional economies and pose a danger to lives as well, both directly and indirectly.

“As the seas, reefs and coasts on which all Caribbean people depend are under threat, much more needs to be done to protect these resources, and the authors recommend building more resilient environments to prepare for, and protect against, climate change,” the report noted.

It has recommended developing a regional network of marine protected areas designed to future-proof marine biodiversity against climate change and stabilise shorelines to preserve natural barriers such as mangroves, salt marshes, and coral reefs.

STRONG HURRICANES TO INCREASE

The scientists warn that while the overall frequency of Atlantic storms may decrease, the strongest hurricanes are likely to increase. Global average sea level is projected to rise by a further 10-32 inches over the coming century a devastating amount for a country as low-lying as Cayman, where it could be even worse.

“In the northern Caribbean, sea-level rise could be 25 per cent higher than the global average due to other physical factors affecting land elevation,” the report states. “This projected rise in sea level and severe storms is likely to increase the risk of storm-surge events for Caribbean states, which will further exacerbate risks to biodiversity, settlements and infrastructure.”

The report also zeroed in on some countries in the region including Jamaica, Belize, St Vincent and the Grenadines, Guyana and St Lucia.

Where fishing is concerned, the researchers noted that if there is no action – permanent fishing camps on low lying offshore cays may be completely submerged by future sea level rise, and these are particularly vulnerable during extreme-weather events.

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JAMAICA HAS ratified the historic international climate change deal, dubbed the Paris Agreement, which was reached in France in 2015, following years of wrangling among countries over what its provisions should be.

This, as the world looks to combat the changing climate that threatens, through sea level rise, extreme weather events, increasing temperatures and associated impacts, to erode economies and jeopardise lives.

“The instrument was signed by the minister of foreign affairs (Kamina Johnson Smith) on the 30th of March and the document sent off to New York for deposit at the United Nations,” UnaMay Gordon, principal director of the Climate Change Division of the Ministry of Economic Growth and Job Creation, told The Gleaner Tuesday.

“It was deposited on the 10th of April. Therefore, for Jamaica, the agreement will enter into force on the 10th of May, 2017,” she added.

Jamaica’s ratification comes close to a year after its participation at the high-level signature ceremony in New York on Earth Day, April 22, 2016.

The agreement, meanwhile, aims to “strengthen the global response to the threat of climate change, in the context of sustainable development and efforts to eradicate poverty” through a number of actions.

Included among them is “holding the increase in the global average temperature to well below two degrees Celsius above pre-industrial levels and pursuing efforts to limit the temperature increase to 1.5 degrees Celsius above pre-industrial levels, recognising that this would significantly reduce the risks and impacts of climate change”.

The island joins other CARICOM members with the exception of Haiti and Trinidad and Tobago who have ratified the agreement.

In responding to the perceived delay in Jamaica’s ratification, Gordon said the island had a process that needed to be gone through.

PROCEDURAL MATTERS

“Once the instrument was signed (in New York last year), then we started that process. Jamaica, unlike some other countries, had a process of consultation with the stakeholders to ensure that people understood what we were doing,” she said.

“The document went to the AG (attorney general) for the opinion of the AG. We received the opinion of the AG in October 2016. In the opinion, the AG had given an undertaking that there were only some procedural matters and that Jamaica could proceed to ratify the agreement,” she added.

“But we thought as a division that we should do the consultations. So we had focus groups, individual sit-downs and so on with stakeholders from finance, forestry, energy, etc, to find out if they were in agreement with the AG’s opinion to go ahead, and all of them had no objection,” Gordon said further.

No objections were received up to February this year and a Cabinet submission made.

“Cabinet gave the approval to ratify,” Gordon said. “We are now a full party to the agreement and have to implement at the national level.”

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The search for oil offshore southern Jamaica continues as a second series of exploration activities, specifically 2D seismic surveys, are expected to begin before the end of this week.

The exploration activities, which are being underatken by Tullow Oil — an independent oil and gas exploration and production company based in the United Kingdom — as part of a Production Sharing Agreement that it signed with the Petroleum Corporation of Jamaica (PCJ) in 2014, are forms of marine surveys conducted to identify sub-surface structures that may contain hydrocarbon (oil and gas) deposits.

The search is expected to cover a marine area of approximately 32,065 square kilometres of the Walter Morant area, comprising of 11 individual blocks.

In 2015, Tullow Oil conducted a series of exploration activities, including a bathymetric (sea floor) survey, soil sampling and an environmental survey, to assess priority habitats and species, fishing activity and seabed habitats in the area. Tullow Oil acquired 3,000 kilometres of 2D seismic data in the first quarter of last year and is now planning to acquire an additional 670 kilometres of 2D seismic data to further develop an understanding of the area.

The upcoming surveys will be conducted by seismic company Seabird Exploration, through the use of its specially outfitted vessel, the Harrier Explorer, and will focus on gathering data on an area between Blower Rock at Pedro Banks and the offshore seas south of Clarendon.

“We’ve seen some of the sheens from the oil seeps that helps us understand that there might be a source kitchen and that is one of the components necessary. You need to have a kitchen… and we are hoping to go ahead and confirm that, through the seismic programme,” Non-Op Business Unit Manager at Tullow Oil Eric Bauer told the

Jamaica Observer yesterday during a tour of the Harrier Explorer, which was docked at the port of Kingston.

Minister of Science, Energy and Technology Andrew Wheatley, who got a tour of the vessel, stated that he was impressed that they have reached the stage where they are going into 2D seismic studies, which he said will help further the search towards finding prospective oil or gas deposits in the selected area.

“We are cognisant of the fact that it’s a process, but we just want to use the opportunity to keep the Jamaican public informed. It’s a partnership between Government and Tullow, but also a partnership between the Government and people, because we want our citizens to be aware.

“We are now at the stage where we are doing the 2D seismic study and this is going to take around six days for the collection of data, and that data will be analysed over a one-year period and if it is positive enough, we move to the 3D seismic survey,” he told the press.

He explained that the 3D seismic survey gives a more detailed idea as to the layer of land, and if that comes up positive, then they will move towards the actual drilling of the first exploration well.

Wheatley also expressed his appreciation to both Tullow and Seabird Exploration for their efforts to balance environmental consideration along with the country’s own development, through their environmental protection efforts and by forming relationships with fishermen and other relevant stakeholders.

Party chief for the Harrier Explorer, David Healy, also underscored the importance of local involvement, highlighting that one of the two support vessels that will be accompanying the Harrier Explorer is a local one.

“We will need both as it’s very important to have not just somebody who knows the job that we do… but local knowledge is very important as well. So it’s always important for us to bring in as many local people as we can, because they know (the) area, what’s happening and when it happens,” Healy explained.

“When you speak to people, we don’t want them to think that we are just going to come in there and destroy their fishing areas or anything of the sort, we also have to protect our own stuff, and so it’s beneficial to both of us if we can work together, so it’s good support,” he said.

Seated from (left) Audrey Sewell, permanent secretary in the Ministry of Economic Growth and Job Creation; Milverton Reynold, managing director of the Development Bank of Jamaica; Gillian Hyde, general manager of JN Small Business Loans, and Allison Rangolan McFarlane, chief technical director, Environmental Foundation of Jamaica sign a Memorandum of Understanding (MOU) to facilitate the administration of the Climate Change Adaptation Line of Credit (CCALoC). The CCALoC will provide financing to Micro, Small and Medium Size Enterprises in the tourism and agri-business sectors across Jamaica, to increase resilience to climate change in these sectors. The signing took place at the Office of the Prime Minister in St. Andrew last year. Looking on are Minister with Portfolio in the Office of the Prime Minister with responsibility for Economic Growth and Job Creation, Daryl Vaz and Therese Turner-Jones, general manager of the Inter-American Development Bank Caribbean Department.

Jamaica National Small Business Loans (JNSBL) is looking to vamp up interest in its US$2.5-million adaptation to climate change line of credit, catering exclusively to small and medium size enterprises (SMEs) from the agriculture, tourism and related sectors.

“In the coming months, JNSBL will be strengthening its efforts through collaborations with related parties in the tourism and agro value chain to further promote the special loan facility,” said Jacqueline Shaw Nicholson, JNSBL’s communications and client services manager.

“We will also support the education of persons on matters of climate change as well as adaptive and mitigation techniques available to them,” she told The Gleaner.

So far, SMEs have drawn down on J$19.5 million of the available funds to finance the installation of rainwater harvesting systems, drip irrigation systems, water recirculation systems, solar water heating system, and energy smart system.

The first loan was approved in December, following the official launch of the line of credit earlier in the year.

“JNSBL is pleased with the take up of the loan facility so far, with 51 per cent to the Tourism sector and 49 per cent to the agro sector in disbursements,” said Shaw Nicholson.

For those persons wishing to drawn down on the funds, criteria for selection include not only that they be operating a tourism or agro-related business, but also that proposed projects must enhance their capacity to cope better with the increased changes and effects of climate change.

“Collateral is required and can include machinery and equipment of trade or to be purchased, motor vehicles that can be comprehensively insured or registered titles as well as lien on deposits, guarantors are also acceptable,” revealed Shaw Nicholson.

The maximum loan amount that can be awarded is $5 million, with an interest rate of four per cent per annum on the reducing balance.

However, Shaw Nicholson said, “borrowers can also utilise other loan facilities available at JNSBL to further support project implementation where needed”.

The line of credit is one of two financing mechanisms under the Pilot Programme for Climate Resilience. The other is the Special Climate Change Fund (SCCAF) that is being administered by the Environmental Foundation of Jamaica (EFJ).

The SCCAF finances adaptation and disaster risk-reduction projects and cover associated programme management cost.

It is accessible by community-based organisations, other civil-society groups and select public-sector agencies specifically for “clearly defined high-priority activities, particularly related to building the resilience of the natural environment and contributing to livelihoods protection and poverty reduction”, according to project documents.

The EFJ recently awarded 18 grants to the tune of $84.9 million to undertake projects designed to boost the ability of communities to respond to climate change threats.

Counted among those threats are increased and/or more severe extreme weather events, such as hurricanes and droughts, which destroy agricultural and tourism livelihoods.

Climate change also brings warmer temperatures, which, too, have negative implications for not only human livelihoods but also marine life. This is given, as one example, the negative effects of increased sea surface temperatures on coral reefs.

It is a look at these implications that, at least in part, provides the basis of JNSBL’s decision to pursue administration of the line of credit under the PPCR.

“Increasingly, agro-related activities were experiencing negative changes in production yield, both in quality and quantity, which affected their ability to earn as per usual. We, therefore, wanted to assist with educating our clients and staff on matters of climate change and assist them to obtain the systems and techniques necessary to adequately respond to matters of climatic variability,” Shaw Nicholson said.

“JNSBL is also cognisant of the wider threat climate change poses to food security and as a part of our own mandate to support economic sustainability, JNSBL wanted to provide well needed support to the MSME sector to adequately mitigate and adapt for sustainability,” she added.

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A JPS workman installs power lines in the Springfield housing development in Clarendon on August 17, 2016. The Jamaican Government plans to divest its near 20 per cent holdings in the power utility.
Opposition spokesman on mining and energy, Phillip Paulwell, says if the Government divests its nearly 20 per cent stake in Jamaica Public Service Company (JPS) at this time, the asset would fetch the least possible value.

However, Dennis Chung, the chief executive officer of the Private Sector Organisation of Jamaica (PSOJ), says if Government wants to divest its shares in JPS it might make sense, noting the valuation of the shares would be based on future prospects of the business.

Governor General Sir Patrick Allen, delivering the Throne Speech in Parliament on February 9, said the Government will this year begin the process of privatising its minority shareholding in JPS.

“The Government will take steps to ensure that there is broad retail and institutional participation and Jamaican owners in the divestment process,” he said, adding that an enterprise team will be appointed to lead it.

JPS is primarily owned by Marubeni of Japan and Korea East West Power Company, each of which holds 40 per cent interest.

Paulwell said the Government’s expressed plan to offload its shares in the power utility “doesn’t mean it’s going to happen as we have seen from last year’s Throne Speech”.

Notwithstanding that, “I am opposed to the divestment of the shares at this time because we would get the least possible value on those assets in JPS, largely because everybody is aware that 290 megawatt of JPSCo capacity will become scrap metal in a matter of time when the new 190MW plant is established.”

The 190MW plant to which he referred is the proposed gas-fired power station at Old Harbour Bay, St Catherine, on which construction is slated to start in early March.

“For me, the Government should participate in the new 190 (megawatt) plant which will preserve and enhance its value, and after that plant has been established, that’s the time you can think about selling the shares,” Paulwell told the Financial Gleaner.

$2-billion debt

“If you were to sell the shares now, we would end up not getting much because we owe JPSCo so much money now; so nothing will go to the government’s coffers, because any money we make from the sale will have to go and clear our debt with JPS,” he said.

He noted that the Government currently owes the JPS more than $2 billion in bills, including for street lighting.

“So if it were to sell the shares now it will be at a depressed value. The net effect would not mean anything coming into Government’s coffers,” said the energy spokesman.

What the Government needs to do is to participate fully in construction of the 190-megawatt plant, Paulwell said. “It will cost them about US$20 million in equity,” he said, noting that for that plant, the JPS has a 20-year power purchase agreement which guarantees that project a significant rate of return on the investment for 20 years.

“That is one of the safest investments you could make. Why would the Government not be a part of that? And at that time it could contemplate on how to dispose of its shares,” said Paulwell.

“And, in any event, if it’s going to do that, the Jamaican people must be the people to whom those shares are sold,” he said.

Chung indicated that in making the decision to divest its shares in JPS, the Government must know what is happening.

He said he did not see it as a big deal to divest the shares and make Jamaicans a part of the ownership.

Referring to Paulwell’s opposition to the sale at this time, Chung noted that valuation of the shares would be done based on what is expected in terms of business.

“If you know, for example, that you have a contract to sell twice what you sold this year, then you can build that knowledge into the valuation,” he said, adding that the valuation would also be based on future prospects.

He noted that shares are traded at a price-earnings ratio and sometimes can be valued at many times more than the book value of an entity.

“So it’s based on information that people have,” he said, adding that if investors believe they are going to make a killing “out of this thing, going forward, then you value the shares accordingly”.

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The Governor General said the Government will seek to ensure that Jamaicans have ownership in the island’s sole electricity generation and distribution company, Jamaica Public Service Company (JPS)

Sir Patrick disclosed this morning that the Administration will this year sell its remaining stake in JPS.

The Government owns 19.9 per cent of the light and power company.

The Governor General said an enterprise team is to be set up to lead the divestment.

The opposition has objected to the Government’s divestment of its JPS shares.

Opposition Spokesman on Energy, Phillip Paulwell, has described the move as ill-advised and untimely.

Paulwell argued that the sale would deprive the company of the opportunity to maximise the expected increase in its assets.

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Special Climate Change Adaptation Fund administrators from the Environmental Foundation of Jamaica and beneficiaries show off the cheque representing the most recent awards at the signing ceremony last Monday.

WITH A changing climate that threatens to wash away entire communities and derail livelihoods, local civil society organisations and small businesses are being empowered to respond – with capital.

This is thanks to financing made available through the Pilot Programme for Climate Resilience (PPCR).

There exist two financing mechanisms, according to Dr Winsome Townsend, project manager for the Adaptation Programme and Financing Mechanism under the PPCR.

One is the Special Climate Change Fund (SCCAF) that is being administered by the Environmental Foundation of Jamaica.

The SCCAF, according to project documents, is “to finance adaptation and disaster risk-reduction projects and cover associated programme management costs”.

“Grants from this trust fund will be accessed by community-based organisations, other civil-society groups and selected public-sector agencies, for clearly defined high-priority activities, particularly related to building the resilience of the natural environment and contributing to livelihoods protection and poverty reduction,” the documents revealed.

Last Monday, the first 18 beneficiary organisations were awarded sums to the tune of $84.9 million to undertake projects designed to enhance resilience at the community level.

“There was a call for proposals in October last year and out of that, about 80 proposals were received and about half that amount were shortlisted. They were further assessed and out of that, an initial 18 were approved,” said Townsend.

“Twelve were pending approval. Those 12 have now been approved. So out of that first call, approximately 30 have been approved,” she added.

PROJECTS TO BE PURSUED

Projects to be pursued include water harvesting and greenhouses, aquaponics systems and food processing, as well as various ecosystem restoration initiatives.

Townsend said another call will be issued later this month or early March.

The second mechanism is a line of credit, intended “to provide loan financing to support adaptation measures of farmers and other businesses in the agricultural sector, and small hoteliers and other businesses in the tourism sector”.

Five projects have been approved to the tune of some $25 million, Townsend said. However, the overall level of interest in the line of credit – administered by JN Small Business Loan – is not immediately clear.

“Because it has started soft, we don’t know yet. We can’t at this time make any determination as to the level of enthusiasm,” Townsend said.

Still, she is hopeful for its success, given what is at stake.

“It is not just the Government who needs to put in measures in terms of climate change adaptation, but everybody, including citizens. Of particular interest is the private sector because businesses are under threat from climate change, and so the private sector needs to respond to these threats,” she said.

“The micro, small and medium-size businesses are at greater risk because of their capacity to respond. They are not as resilient as the more established or bigger enterprises,” Townsend noted.

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The push to get 30 per cent of Jamaica’s electricity from renewable sources by 2030 is not a pipe dream and will be achieved, Government Senator Matthew Samuda has insisted.

The senator said that energy generated currently from renewable sources is 10.5 per cent of net electricity generation.

Speaking last week in the State of the Nation Debate in the Senate, Samuda noted that energy minister Dr Andrew Wheatley, upon taking over the portfolio last year, increased the 2030 target in the national energy policy to 30 per cent from 20 per cent.

GDP Growth

According to Samuda, the target “certainly complements the top line objective of 5 in 4″, referring to the Government’s objective of achieving a GDP growth of five per cent by the end of the 2020-2021 fiscal year.

“This (energy target) is not a pipe dream, nor is this lip service being paid to the nation’s energy supply. I am happy to state here today in this chamber that Jamaica will target a further 100 megawatt (MW) of renewable energy for the grid, with a new invitation for proposals to be made public in the very, very near future.”

Added Samuda: “This project will have a transformative effect on the sector, and indeed, the country. These projects will, no doubt, strengthen a pillar for competitiveness and development, which is cheap, reliable, and clean energy.”

Last year, an additional 80MW of generating capacity from renewable sources was connected to the national grid, Samuda noted.

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WITH ECONOMIES under threat due to climate change and prevailing high production costs, the recent Caribbean Sustainable Energy Forum (CSEF) served as a call to urgent action to realise energy efficiency and energy sustainability within CARICOM.

Kim Osborne of the Executive Secretariat for Integral Development at the Organisation of American States, said it is past time that talk be translated into action.

“There is always the challenge of maintaining a healthy balance between dialogue and implementation. Several studies and reports have noted that our region faces an ‘implementation deficit’, but I would venture to say that the region also suffers from a ‘dialogue surplus’,” she noted.

She was addressing participants at the Caribbean Sustainable Energy Forum (CSEF), held in The Bahamas last week.

“There is a serious mismatch between meetings and results in our region. My point here is twofold: that dialogue is not an end to itself, and that dialogue that does not lead to action and to results is meaningless,” Osborne added.

At the same time, she said that energy must not be looked at in isolation, but rather in the context of sustainable development.

“In the normal course of things, energy is not provided in a vacuum. It impacts and is impacted by several factors, such as poverty, water availability, disaster risk, climate change, health, education and human resource development, human rights, and coastal and marine management,” Osborne said.

“I am proposing that to the fullest extent possible, an integrated approach should be adopted towards the goal of sustainable energy management,” she added.

For his part, Dr Devon Gardner, programme manager for energy with the CARICOM Secretariat, emphasised three things – partnership, integration and action.

“The partnerships are not just for the CSEF, but with the World Bank and the United States Government, we are able to implement the Caribbean Sustainable Energy Road Map ad Strategy (C-SERMS) platform … . Because of partnerships, we have been able to work with the member states,” he said.

UNITY MAKES SENSE

On integration, he noted: “The CARICOM secretariat is really there to serve the member states. We do what the member states require to get the job done. The CARICOM is a group of countries within the Caribbean that we want to do some things together because it makes sense for us to work together to achieve mutual and shared objectives. And the role of the secretariat is to help the member states to realise this objective.”

Added Gardner: “We believe that all that CARICOM desires – from economic development to climate resilience to social resilience to security – is underpinned by having a strong energy sector … . We see energy as a critical part of the regional integration tool.”

In the end, Gardner said there was no question of realising C-SERMS energy targets that include 47 per cent renewable power capacity by 2027 without urgent action.

A number of regional leaders – among them Dr Regilio Dodson, Minister of Natural Resources in Suriname – have noted their support for an integrated and unified approach to the energy efficiency and sustainability in the region.

“We should work together … . We have to actively promote success stories … and learn from each other and go together and try to determine what is for our region the best way forward,” he said.

“If we work together to get this going and get the cooperation between CARICOM countries going, then we will have our energy security in our own hands, ” he added.

Among the topics explored over the three days of discussions at CSEF 2017 were ‘The CARICOM Energy Policy Road Map and Strategy: Shifting the C-SERMS from Concept to Action'; ‘The Regulator Within the Integrated Resource Planning Process'; and ‘The CARICOM Energy Transition: Lessons from the Last Five Years’.

The forum also saw the meeting of regional working groups on key thematic areas, including information and knowledge management, finance, capacity building and research, as well as policy and regulations.

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Opposition spokesman on Mining and Energy, Phillip Paulwell, is describing as ill-advised and untimely the latest proposal by the Government to divest its 19.9 per cent stake in the Jamaica Public Service Company Ltd (JPS).

Paulwell, who said that Finance and Public Service Minister Audley Shaw recently alluded to the divestment of the Government’s shares at this time, argued that the transaction would deprive the country of the opportunity to maximise the expected increase in the value of the energy company’s assets when the energy diversification and modernisation exercise is completed.

“While we recognise and appreciate the fact that the divestment would serve to broaden the ownership base of assets in the country, we urge the Government not to squander the country’s assets on the whim of expediency, but to be guided by the cost-benefit analysis of the divestment,” Paulwell insisted.

Despite the Opposition’s reservations to divest the JPS shares at this time, Paulwell recommended that every effort should be made to ensure that Jamaicans are given the opportunity to acquire the publicly held shares in the company.

The previous People’s National Party administration had taken a policy decision to divest itself of commercial assets once the opportunities arise.

In 2016, the Development Bank of Jamaica had advised that the Government was committed to selling its stake in the JPS, the island’s sole power distributor.

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