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CARICOM Spotlights Energy: Citizens Urged To Support Efforts

November 10, 2016 Webmaster

The painting by Candice Henry of Trinidad and Tobago, which placed second in CARICOM Energy Week art and photo competition last year.

THE CARIBBEAN Community (CARICOM) Secretariat is this month drawing public attention to the energy realities of the region while helping individuals to identify how to better conserve while cutting costs.

They are doing it through a slew of activities, all of which are being celebrated as part of CARICOM Energy Month and under the theme “Sustainable Energy for Sustainable Development”.

“There are really two main things we are trying to do. One is to really build awareness among the general citizenry around energy matters so people understand what energy conservation means and what are some of the things they can do to take better control of their energy system,” said Dr Devon Gardner, programme Manager for Energy at the CARICOM secretariat.

“The second thing is for them to really understand the energy situation in the region and what is being done on the macro scale to provide the right-size solutions that can be used to support the sustainable development of the countries of CARICOM,” he added.

To make that happen, among other things, there are three knowledge webinars planned on the subject, all of which target the regional public and a number of key stakeholders.

There are, too, a number of competitions one of them a photo and art competition and another a regional news reporting competition intended to get people thinking through energy issues as they affect them and the likely solutions.

According to Gardner, the observation of CARICOM Energy Month which also takes account of national-level activities, including kilo walk events set for, for example, Guyana and St Lucia is important. And this, at a time when CARICOM countries are collectively using some 13,000 Btu of energy to produce one US dollar of gross domestic product (GDP) compared to 4,000 Btu of energy used by Japan, for example, to produce the same one US dollar of GDP and the global average of 10,000 Btu.

“We live in an age where there is great participation in energy; energy investments and energy solutions are no longer top down. Thirty years ago, the utility made the decisions about what kind of power plants to use, determined how to deliver the energy and a person took what was provided. If you did not have it, you simply waited for the utility to give it to you, which is why you heard of rural electricity programmes and so on,” Gardner noted.

“We are in an age now where technology has changed; there a lot of options available for or small, individualised power generation systems as well as energy services that can be provided directly and in a cost-effective ways, such as solar water heaters. There is also greater awareness of people around what is possible though they might not know what those solutions are. It is incumbent on us to give them the options,” he added.

“It is a part of good governance, it is a part of what modern society requires,” Gardner said further.

Critically, he said information and exchanges this month will afford Caribbean stakeholders the chance to shape their climate future.

“Over the last twenty years or so, the whole issue climate protection and of sustainable development practice has risen to the fore on the global agenda. There is recognition that the climate fight can be impacted by an aggregation of climate actions at the micro level,” he said.

“The role of each individual in being able to fight or mitigate various climate effects has drive a lot of what energy month wants to provide, which is that each individual, in their own space, can do something, which when aggregated with the global efforts, is part of significant tool,” he added.

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Elon Musk’s Clean Energy Vision Includes a Strong Role for Utilities

November 8, 2016 Webmaster

Elon Musk has staked a claim on a distributed energy future, but recent comments suggest he’s not going to be a fundamentalist about it.

The billionaire has arguably done more than any other individual to accelerate electric cars and make distributed energy desirable. His vision, detailed explicitly in his Master Plan, seemingly renders the traditional role of the electric utility obsolete.

This stance has prompted many a think piece framing the future of energy as a battle between Musk and billionaire investor Warren Buffett, who owns several utilities via Berkshire Hathaway Energy and favors a more centralized approach of utility-scale renewables projects feeding the grid. The apparent dichotomy between their world views only strengthened when one of Buffett’s companies, NV Energy, succeeded in its efforts to charge rooftop solar customers more and pay them less for the electricity they put back into the grid. That development struck a blow to Musk-affiliated SolarCity, which subsequently pulled out of the state.

Of course, it’s likely that neither of these two visions will succeed entirely, and the future will be determined by some sort of compromise struck between them. That outcome appeared in a statement made Friday by none other than Musk himself.

Before showing off the fancy new solar roof product Tesla has been working on, Musk unveiled new versions of his Powerwall and Powerpack batteries, and ventured into big-picture territory.

“The solution is both local power generation and utility power generation — it’s not one or the other,” Musk said.

He went on to suggest that the breakdown in electrical generation will be two-thirds utility and one-third local. It’s worth noting that this forecast refers to an electrified future where the grid powers things like transportation and heating, which currently utilize fossil fuels. That means the pie of electricity consumption that gets divvied up will be significantly larger than it is today.

One-third might not sound like victory, but that would be a major coup for distributed energy, which is still very small compared to overall utility-scale generation.

That’s also an olive branch for the utility industry, which has been hearing rhetoric from some sectors of the solar industry that clean energy will eradicate customers’ need for an entrenched, monopolistic utility to make power for them. Musk is affirming that, with all the power we’ll need in a low-carbon, electrified world, there will be plenty of room for utilities to make money.

And that means there will be plenty of room for Tesla to make money off them.

Utilities are the target audience for Tesla’s larger battery, the Powerpack, which now starts at 50 kilowatts/210 kilowatt-hours and scales up indefinitely. Tesla has already made deals to deploy 80 megawatt-hours with Southern California Edison and 52 megawatt-hours with the Kauai Island Utility Cooperative, among others.

At an industry gathering of investor-owned utilities last year, Musk said he expects 80 percent to 90 percent of batteries the company sells to be Powerpacks, not Powerwalls. That makes a lot of sense, both because utilities need more batteries than homeowners do and because the economics are much better in the large-scale battery market than in residential storage, at least for now.

SolarCity, which has taken a strong stance on solar policy issues in key states like Arizona, has begun courting utility customers as well. The residential solar company launched a utility and grid services division in May, and has worked with Tesla on grid-scale solar-plus-storage plants.

Musk clearly sees room for both utilities and distributed energy providers to prosper in a clean energy future. Plus, why sell to one market when you can sell to two?

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‘We Want Investments And Jobs – But Not At Expense Of Public Health And Climate’

November 8, 2016 Webmaster

At least one local environmentalist has hit back at Sally Porteous, custos of Manchester, over her arguments urging the Government’s authorisation of a coal plant for a US multibillion-dollar investment into the Alpart alumina plant in St Elizabeth.

The Chinese-owned Jiuquan Iron and Steel Company (JISCO) is planning to spend US$3 billion or J$387 billion for the upgrade of Alpart’s alumina plant in Nain and expansion into a special economic zone. More than 3,000 people are expected to be employed over the six-year period of initial investment.

However, a proposal to use a coal-fired plant has angered environmentalists, forcing the Government to come out declaring that any decision on whether to use coal is almost two years away.

Speaking last week at a Gleaner Jobs & Growth Forum in Manchester, Porteous did not hold back.

“While I listen to, and respect, the environmentalists, I sincerely hope that it is not going to be a case of crying wolf and preventing an enormous opportunity for Jamaicans to get work.

“From what I understand, they will not be using coal from China, they will be using coal from Colombia. The Alpart plant itself would be run on oil, and the coal they are going to be using for the coal plant will not emit any worst emissions than oil,” she added, noting that she recently met with Chen Chunming, the JISCO chairman.

But Diana McCaulay, chief executive officer of the Jamaica Environment Trust (JET), said Porteous’ analysis is not deep enough, and so, too, is her view that coal is cleaner than oil.

“People are entitled to their views. But coal is a 19th-Century technology. It is time for us to move forward, and it is time for us to take the position that we want development and we want industry and we want business and we want jobs for our people, but not at the expense of public health and the climate.”

She added: “Jamaica is incredibly vulnerable to climate change. To say that you’re willing to take this risk for some short-term jobs, I find mystifying.”

Jamaica has been going through decades of low growth, double-digit unemployment and crippling debt levels that have created the circumstances for a loan agreement with the International Monetary Fund.”

NOT FIRST TIME

It is not the first time a local official has waded into controversy over securing needed investment for the country. Last year January, in the face of a hotel investment being derail over breaches, Robert Pickersgill, then environment minister, in lifting a cessation order remarked that he took note of the “the substantial value of the project to the Jamaican economy, which outweighs all other consideration”.

In September, Mining Minister Mike Henry said a decision on the coal proposal was at least 18 months away.

Global environmental advocacy group Greenpeace has said constructing the plant would violate the Paris climate agreement aimed at limiting global warming.

Porteous maintained that the Chinese investment represents an opportunity to bring well-needed economic growth to central Jamaica.

“This is the centre of the island’s only chance for revival. We have nothing else. We’re not near a beach, the north coast is taking care of itself very, very well, and I can see very great business going into Kingston.

“We have the opportunity of a lifetime with JISCO coming to take over that plant,” she said.

The Manchester Chamber of Commerce said it is already taking steps to get the parish ready to claim some of the spinoff benefits.

“We’re currently in discussions with investors to try and lure them and encourage them to come into the development of the parish to aid in the development of the parish, especially as it related to three main areas,” said Michael Gottshalk, the chamber’s manager of communications and public affairs.

He said housing to accommodate the expected influx of workers, entertainment and parking are at the top of the list.

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Canadian Government Makes 100% Renewables Commitment

November 8, 2016 Webmaster

The Canadian federal government has committed to powering all of its buildings and operations using renewable energy sources by 2025. The goal is in support of a broader target to reduce the government’s greenhouse-gas (GHG) emissions by 40% by 2030.

Catherine McKenna, the federal minister of environment and climate change, announced the new commitments while speaking at the Canadian Wind Energy Association conference in Calgary on Wednesday. In a press release from the government, McKenna commented, “We are taking action on climate change by greening our government’s activities and are doing our part to make further progress toward Canada’s emissions target. We will do more as we develop our pan-Canadian climate plan – a plan that will create good jobs for the benefit of Canadians, especially the middle class and those striving to join it.”

In its release, the government notes that although the GHG-reduction target is set for 2030, it aspires to meet the goal by as early as 2025. By that date, the government continues, Public Services and Procurement Canada – the government’s principal landlord – will be purchasing 100% of its electricity from clean energy sources. The government notes that its Department of National Defense will be buying a significant amount of renewable electricity for its installations in Alberta. This will meet most of the electricity requirements for installations in Calgary, Cold Lake, Edmonton, Wainwright and Suffield.

John Gorman, president and CEO of the Canadian Solar Industries Association (CanSIA), has lauded the government’s new initiatives.

“The federal government’s commitment to purchasing 100 percent renewable electricity from sources, such as solar energy, as early as 2025 makes a significant contribution to Canada’s innovation and environmental protection agenda in two ways,” said Gorman in a statement.

“Firstly, they have the purchasing power to make a difference. Not only will their actions directly displace significant levels of greenhouse gas emissions, it will also give rise to new businesses and infrastructure.

“Secondly,” he continued, “being a part of the global response to climate change will bring changes to the decisions that are made by all consumers for goods, products and services. By leading by example, the government of Canada is demonstrating that every one of us has a role to play in making the right decision for future generations.”

In addition to renewable energy procurement, the government says it will make strategic investments in vehicle fleets and infrastructure. For example, the government says it will invest in revitalizing the heating and cooling plants in the National Capital Region, which provide services to more than 85 buildings and facilities. That investment is expected to modernize six separate facilities and reduce their emissions by more than 45%, according to the government.

The announcement did not provide many details regarding planned renewable energy procurements, including solar’s potential role; however, the government says it is establishing a new team, called the Center for Greening Government, to track the government’s emissions centrally, coordinate efforts across agencies and drive results to ensure the objectives are met.

Notably, these new initiatives are just the latest signs of hope that the Canadian government has provided to the country’s fledgling solar industry, which had only about 2.5 GW of cumulative installed capacity by the end of 2015. Canadian Prime Minister Justin Trudeau has committed Canada to the Paris Agreement, and in June, he united with U.S. President Barack Obama and Mexican President Enrique Pena Nieto to set a goal of achieving 50% clean power generation in North America by 2025. Furthermore, in October, the government introduced a nationwide carbon pollution pricing plan.

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NWC can produce more power than JPS – Chang

November 3, 2016 Webmaster

Dr Horace Chang says if given the green light from the utilities regulators, the National Water Commission (NWC) could generate even more power than the Jamaica Public Service (JPS).

Chang, who has responsibility for water in the Ministry of Economic Growth and Job Creation, said that currently the NWC’s biggest expense is its electricity bill, which averages around $450 million monthly.

“Of course, if the water supply company is allowed to generate its own power without any kind of guidance or regulation, we could end up producing more power than JPS. If we have hydropower, we can produce so much; we have lands we can produce solar power and not only remove ourselves from the grid in terms of supply sources,” Dr Chang argued.

He was addressing the final day of the three-day 14th Annual Conference of the Organisation of Utility Regulators last Friday, held at Secrets Resort and Spa in Montego Bay, St James.

He called on the utility regulators to examine the relationship between utilities.

“Can exception be made [in] how you do it and in what way it is done that it doesn’t end up superseding the other? That’s maybe the biggest question,” Dr Chang said. “Regulators have to create the framework in which the company itself can move forward; the broader policy of ownership is decided by the Government.”

The water minister explained that under the current arrangement, if the NWC or the National Irrigation Commission were to “produce power for itself and reuse it”, they would have to first be awarded a licence by the Office of Utilities Regulations.

“Under the current regulator, if you produce power, move it from one venue to the next, you need a licence. And if you are doing a licence, it has to be competitively awarded and that creates challenges,” he argued.

“Certainly, I think we can produce power on site, which we intend to do in a couple of our local outlets, but that raises some challenges.”

Another challenge he highlighted was wheeling, which refers to the scheduling of the energy transfer from one balancing authority to another. Since the wheeling of electric energy requires use of a transmission system, there is often an associated fee which goes to the transmission owners.

“The challenge here is not only wheeling for commercial purposes [and] home users, but since a water company can produce water in large amounts, the question of wheeling within the head of the utility becomes relevant. It is something that needs to be addressed,” Dr Chang said.

“The real impact of water is, it also has a social impact, but it has to be produced at an economical rate. And power becomes one of the big cost factors. For irrigation, in fact, we might not be able to provide our southern plain — which is our major provider of food supply — with irrigated water if we don’t have the right to produce some of the power for ourselves, because farmers cannot afford to pay the JPS bills.”

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No Ratification Of Paris Agreement Before Next Year

November 3, 2016 Webmaster

Armed with comments from the Office of the Attorney General (AG), Jamaica is looking at next year to ratify the Paris Agreement, which sets the framework for the global response to climate change.

“We have received the comments of the AG, which point out the obligations the country would have under the agreement. We now have to complete a series of consultations with the various stakeholders that would have a critical part to play in meeting those obligations,” revealed Colonel Oral Khan, chief technical director in the Ministry of Economic Growth and Job Creation.

“So we are going to be entering into that period of consultation before we seek the formal approval to ratify. We do not anticipate any hurdles; it is just now a process that we have to go through to ensure that we do not leave anybody behind. When we ratify, everybody must understand their obligations,” he added. Among other things, Jamaica will need to satisfy the United Nations Framework Convention on Climate Change (UNFCCC) requirement for nationally determined contributions (NDCs) to reducing greenhouse gas emissions, which fuel global warming.

“We already submitted our INDCs (Intended Nationally Determined Contributions) and we are to confirm they are to move from INDCs to NDCs. So we have to formally notify the UNFCCC of our NDCs,” Khan explained.

PROCEDURAL MATTERS

There are, too, a number of procedural matters to deal with “such as some reporting requirements that will have to be met”, he noted. Jamaica’s adaptation strategy and action plans are among those items that will need to be reported on. Already, the island has identified a number of priority sectors for these plans, including water, health, tourism, human settlement and coastal resources, in addition to agriculture, forestry and energy.

“We will have to keep the UNFCCC updated on our steps to implement and in preparing those annual reports that we have to make,” Khan said.

At the same time, the chief technical director indicated that ministries, such as the Ministry of Science, Energy and Technology, will have “a significant role to play”.

“A lot of our targets in the NDCs are things that fall under the energy policy in terms of switching to renewable energy and so on,” Khan noted. Once the consultations are finalised, they will report to Cabinet for the required approval to proceed with the instruments of ratification.

“We have to satisfy the Cabinet that we have engaged all the stakeholders so they have a fair appreciation of what is involved,” Khan said. He has, however, cautioned that the process will take some time.

“We can’t just wish it and it is done,” Khan told The Gleaner. “The time of the year we are in and approaching and with members of our Climate Change Division participating in the COP (the 22nd Conference of the Parties to the UNFCCC in Morocco), that kind of slows our process down in terms of our resources to undertake and lead in some of the consultations.”

Added Khan: “So for the month of November, we are going to be pretty much tied up and the environment in December will not be conducive to consultations. So we could end up seeing the process drag into next year.”

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Holness: ‘Get It Right’ On Energy

October 27, 2016 Webmaster

Prime Minister Andrew Holness addresses the opening ceremony of the Organisation of Caribbean Utility Regulators Conference in Montego Bay, St James, yesterday.

Asserting that “we must get it right”, Prime Minister Andrew Holness has urged utility regulators to take seriously their role in helping the Caribbean ease its dependence on oil and embrace technologies and renewables key to energy diversification.

The regulators’ role, he said, is linked to the creation of partnerships with investors who want returns, consumers and governments pushing for the economic development of their countries.

Holness was addressing the opening ceremony for the 14 Organisation Of Caribbean Utility Regulators (OOCUR) conference at the Secrets Resorts & Spa in Montego Bay, St James.

A variety of issues are set for discussion over three days by the more than 160 regional and international experts.

However, Holness, noting the importance of energy to the region’s development and the current high levels of dependence on oil, made it clear that the issue should be at the top of the agenda.

“Energy is clearly the mission-critical frontier,” he said, pointing to the role of Jamaica’s Office of Utilities Regulation (OUR) in helping Jamaica introduce liquefied natural gas (LNG) as part of the energy mix.

“The OUR approved the funding for the conversion of the Jamaica Public Service Bogue plant to enable the move from heavy dependence on oil to diversifying to LNG. I applaud the OUR in this regard for being a strong regulator and helping to make this move a reality – to take Jamaica on this new platform. This is a great example of collaboration among Government, regulator, and utility,” Holness added.

A shipment of LNG supplies arrived in Jamaica last week Saturday, and in two weeks, is expected to be in full use.

TAKE ROLE SERIOUSLY

The prime minister emphasised that regulators have to take seriously their role in helping the Caribbean Community implement the Caribbean energy policy that was approved in 2013.

That policy promotes a shift in sustainable energy through increased use of renewable energy sources and energy efficiency, among other things.

“OOCUR, you have your work cut out for you as not only is Jamaica focused on diversifying its energy mix, so, too, is CARICOM, and we must get it right in the region. Access to affordable energy is a necessary requirement for addressing sustainable development in the region,” Holness said.

He also argued that while there is need for partnership with all stakeholders in the provision of utilities, the providers must insist on self-regulation to ensure that standards are upheld and service delivery is at a high quality.

Earlier, Albert Gordon, chairman of OOCUR, said the conference was happening at a time when regulation was becoming more important for sustainable development.

The conference schedule has placed heavy emphasis on renewable energy and investment.

Jamaica and many other small-island states of the Caribbean are heavy importers of oil, which increases their vulnerabilities to external shocks such as sharp oil price rises. Except for Trinidad and Tobago, the only net exporter of oil and natural gas, all other Caribbean countries are net oil importers.

“For importers other than Suriname, around 87 per cent of primary energy consumed is in the form of imported petroleum products. Imports are mostly diesel fuel for electricity generation, gasolene for transportation, and liquefied petroleum gas used as cooking gas in households,” experts noted in a paper titled ‘Caribbean Energy: Macro-Related Challenges’ released in March by the International Monetary Fund.

This, they said, has led to consistently high electricity rates, which affects the competitiveness and development of CARICOM nations.

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US Vote Could Impact Caribbean’s Climate Future

October 27, 2016 Webmaster

Republican Walter ‘Mike’ Hill makes a point during The Gleaner’s Editors’ Forum on Tuesday. Next to him is Democrat Moises ‘Moe’ Vela, and Judith Weddeburn of the 51% Coalition.

Jamaica and the Caribbean’s bid for a secure climate future is likely to be impacted by the outcome of the November 8 United States (US) presidential election.

However, whether the impact will be negative or positive remains to be seen, though the sentiments of representatives of the Republican and Democratic parties – present in Jamaica this week – provides an indication of the possibilities.

Republican Walter ‘Mike’ Hill, member of the Florida House of Representatives, has denied the existence of climate change.

“I do believe in climate change; it’s called summer, winter, spring and fall. It is not anthropogenic; it is not man-made,” he told The Gleaner‘s Editors’ Forum on Tuesday afternoon.

“Our climate is being affected primarily by two major forces – our sun and our oceans. Me driving my car to and from work is not changing our climate,” he added.

Hill went further to reveal his aversion to the Paris Agreement – which the US ratified on September 3 – and to the provision of financing to support climate change adaptation and mitigation, whether in the Caribbean or elsewhere.

REPUBLICAN ‘NO’

“I would say no to signing that agreement (the Paris Agreement) because it would be much too expensive to not only the American taxpayers, but the other countries that are imposed upon for what has been proven scientifically to be very minimal improvement in a reduction of carbon dioxide into the air, which, by the way, is not a poison. Our plants need it (carbon dioxide) in order to survive,” he said.

The Paris Agreement was brokered last year at the 21st Conference of the Parties to the United Nations Framework Convention on Climate Change, held in France.

The agreement – which is to come into force on November 4 – has as its goal: “holding the increase in the global average temperature to well below 2 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”.

Democrat Moises ‘Moe’ Vela, who served in President Barack Obama’s administration as the director of administration and senior advisor in the Office of Vice-president Joe Biden, was of a different view from Hill.

“Senator [Hillary] Clinton has long been on the record, as I have been, as a matter of fact; we respect and we recognise the intelligence of our scientists from around the world. You don’t have to read 500 scientific reports to understand climate change is truly impacting our world,” he said.

“Secretary Clinton will continue to work with other leaders around the world as she has as secretary of state and as senator … to recognise the impact that climate change is having on our world,” Vela predicted.

CHILDREN OF THE WORLD

“I personally don’t have children, but I care enough about the children of the world, and I know she does as well… to give them an Earth that is sustainable … . We have got to address climate change so that the children of the world have a brighter future,” he said.

While admitting to having no authority to speak for Clinton “on the finance matter”, Vela said: “I would hope that the financials would flow from the United States to address climate change in the Caribbean basin and around the world.”

Meanwhile, Hurricane Matthew hammered the Caribbean recently, leaving hundreds dead, billions of dollars in infrastructural damage, and despair in countries such as Haiti, Cuba and The Bahamas – a grim reminder of the threat climate change presents to especially small-island states.

That threat includes not only warmer temperatures, but also rising sea levels, coastal erosion and extreme weather events, including more frequent and/or intense hurricanes and droughts.

On the outcome of the US presidential election and the implications for local efforts to bolster climate change readiness, chief technical director in the Ministry of Economic Growth and Job Creation Colonel Oral Khan said the island would wait to see.

“I think the US elections have generated a lot of interest beyond just questions of climate change, and we cannot escape taking note of the some of the things that are being said, but we will await the outcome, and through diplomatic channels, we will continue to press for what the Paris Agreement calls for,” he told The Gleaner.

AWARENESS INITIATIVE

Hill and Vela are in Jamaica this week as part of an initiative of the United States Embassy in Kingston and the 51% Coalition, with Panos Caribbean as implementing partner.

The initiative is designed to “raise public awareness and advance understanding of the US presidential election process, with an examination of lessons and implications for Jamaica and the Caribbean, in the interest of responsible and democratic governance,” according to information out of Panos.

In addition to Hill and Vela being present on the island for a round of media interviews and public engagements, there have also been a series of Dinner and a Debate viewing events. Those events saw Jamaicans exposed to the cut and thrust of the US presidential debates between Democratic Party candidate Hillary Clinton and Republican Party candidate Donald Trump.

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Caribbean Islands Urged To Ratify Paris Agreement

October 21, 2016 Webmaster

CARICOM Secretary General Ambassador Irwin LaRocque (left) with Dr James Fletcher, who led CARICOM negotiators, in discussion with regional heads of government and ministers at the Paris Climate Talks last year.

With the Marrakech climate change talks now only weeks away, the few CARICOM member states that have not yet ratified the Paris Agreement – Jamaica among them – have been urged to do so.

The appeal has come from Dr James Fletcher, former head of the CARICOM Task Force on Sustainable Development.

He predicted that the failure to ratify will see those islands running the risk of not having a say in the first meeting of the parties to the global deal next month.

“Given that the Paris Agreement will enter into force in the Marrakech meeting … if you haven’t ratified the Paris Agreement, then really you cannot be at the table determining rules and procedures and everything else,” he cautioned.

“If you have not ratified the agreement, then you don’t have a voice at the meeting. There will be CARICOM countries there (who share similar challenges) and who will speak on your behalf, but I don’t think it is a position you want to be in because you cannot articulate your own concerns,” added Fletcher, also the former minister of sustainable development for St Lucia.

Ten CARICOM countries have so far ratified the agreement. They include Antigua and Barbuda, Barbados, The Bahamas, Belize, Dominica, Grenada, Guyana, St Kitts and Nevis, St Lucia, and St Vincent and the Grenadines.

They are among the 81 countries to have ratified the agreement, which prescribes the way forward for the planet in its battle against the changing climate.

Caribbean islands and other small-island developing states (SIDS) are counted among those most vulnerable to climate threats.

Those threats include extreme weather events, the likes of Hurricane Matthew, which barrelled across the region recently, leaving in its wake death and destruction in places such as Haiti, Cuba and The Bahamas.

In Haiti alone, the death toll is registered at more than 900, with millions of dollars in loss and damage to infrastructure.

Meanwhile, Fletcher – a respected regional statesman reputed for his work in climate change and other development issues, including energy – is buoyed with the progress on the Paris Agreement. Still, he cautions that there are still miles to go to where the region needs to get in its readiness for climate change.

“We are very encouraged by how quickly this agreement has come into force … It really is awesome for me that the community has rallied to this cause and there seems to be an urgency that, at least philosophically, we need to move in a particular direction,” he said.

LACK OF URGENCY

“What is worrying to me is that there does not seem to be an urgency where climate action is concerned. If you look at the level of ambition for the level of greenhouse gases, it is still not taking us below 2.7 degrees Celsius. Nobody has come out and said, for example, that they will reduce their emissions by another 25 per cent,” Fletcher added.

This, he noted, is what is required if the world is to realise one of the objectives of the Paris Agreement, to hold “the increase in the global average temperature to well below 2 degrees Celsius above pre-industrial levels and to pursue 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”.

“I would like to see greater pledges from major emitters to reduce their emissions and more pledges where finance is concerned,” the former minister noted.

“There is a lot that has to be done where SIDS are concerned. (We are in a time when we) have hurricanes hitting multiple countries and travelling in pairs. So the situation is ominous; the projections are all showing that our area will be one of the hardest hit by climate change, and we don’t have the funds to adapt,” he said.

“We are really are saying to our residents that they are in for a very bleak future when we should be saying, having signed the agreement, we can now assure that the climate finance is going to flow and action is going to be taken to reduce greenhouse gases to get us close to 1.5,” added Fletcher, who will be in Marrakech next month to support CARICOM.

“We are not in a good place where bending that temperature curve is concerned, and making finance more readily available to SIDS is one way to get there,” he said.

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Millions More! – Parliament To Be Asked To Approve New Oil Hedge

October 21, 2016 Webmaster

Governor of the Bank of Jamaica (BOJ) Brian Wynter and Financial Secretary Everton McFarlane have come out defending the costly ‘insurance’ Jamaica has taken out against oil prices as the expiration date nears and a new one is being prepared for Parliament’s approval.

Hedging is an investment position used to reduce substantial losses that could be incurred based on actual or perceived fluctuating developments.

Last year June, Jamaica entered an arrangement with Citibank, which covers the period from June 2015 to December 2016, and for which the bank has been paid approximately J$3.3 billion (US$27.9 million) in premiums. The arrangement involved three contracts.

Under the arrangement, Jamaica would get a payout if oil prices exceed US$66 per barrel. Up to yesterday, the West Texas Intermediate crude rate used under the hedge put the latest oil prices at US$51.60 per barrel.

McFarlane told Parliament’s Public Administration and Appropriations Committee (PAAC) yesterday that the Parliament would be approached to approve funds to extend the hedge as no provision was made in the 2016-2017 National Budget, approved in May.

“In the coming Supplementary Estimates, we are looking to find the resources so that we’re covered a longer period of time,” he said. He added in a Gleaner interview later that “the details as to the period to be covered and the level of coverage are to be finalised in short order.”

He said the resources would come from budgetary reallocations.

NUMBER OF BARRELS DECLINING

The BOJ Governor also noted that with just two months to go under the last contract, the number of barrels has been declining.

“We’re not covering the full monthly amount now. This is the tail end of what was being hedged over a year ago. It’s a little under 200,000 barrels per month, whereas when you’re covering (fully), you’d be up there at about 700,000 or 800,000 barrels per month,” he said.

Concerns had been raised that because prices have remained low, Jamaica was losing millions under what some critics held was an unnecessary hedge.

PAAC member Franklyn Witter, using similar concerns, questioned whether the risks that gave rise to the hedge still existed.

“You have a projection over the medium term for oil to remain within $52 per barrel, so given that projection, why do you think it would be important to continue with the hedge?”

McFarlane responded that the risks still existed and that “Jamaica’s interest in continuing the hedge is based on the loss of foreign exchange that can entail or the budgetary loss that may arise in the event of significantly higher prices”.

Wynter, meanwhile, noted that investors have questioned how Jamaica would cope when oil prices increase even if other risks are low.

“There are several different answers to give. One answer is to build the Net International Reserves up by an extra billion so that we have it sitting down. The other extreme is to pay the $20 million or $30 million, still a lot of money, which, if nothing happens, you lose the premium, but if that event occurs, you get the payout that someone else has to have to pay you.

“We do look at what makes more sense,” he added. “Accumulating reserves is good for all sorts [of] reasons, but it’s also costly. So what we’ve done is try to strike the balance.”

The hedge has been funded by a special consumption tax on fuel.

The Private Sector Organisation of Jamaica has supported it.

No date has been given for the tabling of a supplementary budget, which the Finance Minister Audley Shaw has indicated will be coming.

In January, while on opposition benches, Shaw said the administration may have been ill-advised in pursuing the hedge.

Gleaner

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