What it takes to go green – stakeholders look to energy transition

IT’S NOT easy going green, but someone has to do it.

For this region, seeking to transition to renewable “green” energy means a lot of things. It means compliance to trade conditions that would have us manage resources that other countries were able to exploit without regulation.

It means sharing responsibility for climate change, irrespective of the region’s miniscule contribution to the world’s carbon footprint. It also means sharing the workload to reverse the effects of climate change, despite the fact that the Caribbean is the most vulnerable to its effects.

At the Caribbean Sustainable Energy Conference at the Hilton Trinidad and Conference Centre, Port of Spain, from June 2-4, the nuances of the Caribbean’s position on climate change and energy transition slipped out in an exchange during one of the sessions including founding chairman of the Caribbean Energy Chamber Melanie Chen, IDB managing director of the Caribbean Darryl White and Republic Bank group sustainability officer Tisha Marajh, with Dr Thackwray “Dax” Driver as the moderator.

In the conversation, panellists touched on the fact that not only will emission-reducing strategies such as energy-efficient practices increasing the use of renewable energy be beneficial to reduce the environmental impact of climate change but could have positive economic effects.

On the other hand it was highlighted that, with the globe shifting toward energy-efficient taxation modules such as as the carbon border adjustment mechanism (CBAM), not engaging in energy efficiency could have a negative environmental and commercial impact on this region.

Risk and reward

Responding to questions from the audience, the panel agreed that not doing what it can to transition to cleaner energy and reduce its emissions through energy efficiency could go beyond the environmental impact in the future, to an economic impact now.

Chen said in the tourism industry, some of the booking platforms monitor and rate hotels on the measures they take in energy efficiency.

“If they couldn’t disrupt or were not up to speed on it, they would not be able to get on some platforms. So it has a direct commercial impact. It is not just sort of a nice thing to be energy efficient, it is now a commercial reality.”

She noted that other initiatives such as the European Union CBAM – which will come into effect in January 2026 – would also increase the renewable energy used in regional manufacturing.

“They did that not because they were trying to penalise the rest of the world, but because they have pushed to have a much higher percentage of renewable energy in its energy matrix.

“In order for the rest of the world to export to the EU, they will have to have the same conditions that the EU manufacturers have.”

While the European CBAM is set to take effect from next year, the UK CBAM, which will have different ratings and compliance mechanisms, will be implemented in 2027. Other countries, such as the US, have noted intentions to implement their own CBAM-like policies but they have been put on pause amid the Trump administration’s “drill baby drill” agenda.

Chen said energy efficiency simply makes economic sense as it is a form of low-hanging fruit that will have a positive impact on the region’s emissions and finances.

She said programmes such as the Caribbean hotel energy efficiency action programme (CHENACT) has proven that modest refitting of hotels such as energy-efficient lighting can yield up 20-30 per cent savings.

“In some cases facilities could save up to US$1 million annually while the sector’s total emissions reduction potential exceeds 835,000 tonnes of carbon dioxide.”

Energy efficiency is also becoming a deciding factor in selecting hotels, especially with more environmentally-conscious guests.

Chen said in TT, as commercial and residential electricity has increased by 28 per cent since 2013, energy efficiency can reduce the burden of energy demand and enhance grid resilience.

“It will (also) reduce our natural gas consumption which could be used in the downstream sector for export and gain more foreign currency income.”

On the other hand Preeya Mohan, senior fellow at the Sir Arthur Lewis Institute of Social and Economic Studies at the University of the West Indies (UWI) said non-compliance with CBAM could affect the way TT interacts with foreign markets for trade.

“As exporters, we want to get into the EU market, we need to comply with their CBAM regulation. If we do not comply, they will not accept our exports,” she said.

In a presentation, she said based on studies done at UWI on the impact of the EU CBAM, 30 per cent of TT’s exports to the EU will be affected by the CBAM tax regime, which could equate to about 13.5 per cent of the country’s GDP.

She added the product scope is expected to expand to all products under the EU emissions trading system (ETS).

“If that happens it means 69 per cent of our exports will be affected by these taxes.”

She added that about 14 per cent of TT’s exports go to the EU.

In a conversation with Business Day, she explained that CBAM will increase the cost of imports given that a tax will have to be paid on the country’s exports into the region, based on its carbon content.

“If exporters are not able to provide that information, they will be charged a default tax value, which is the average tax value of carbon content for that particular product across the globe, calculated by the EU.

“It's really in the interest of our exporters to measure their emissions and calculate that tax value so that it's the lowest possible value.”

She said people ought not to consider CBAM and its regulations as a risk or a threat but as an opportunity to take responsibility for the region’s climate future.

“We want a healthy environment, we want to reduce emissions so that we can breathe better air and so that we're not impacted by climate disasters.

“We say we want to do these things, but nothing happens. CBAM now comes as an external force that is literally forcing us to make the adjustments.

“The CBAM provides that impetus for us to monitor and report the emissions and then to reduce the emissions.”

Responsibility to change the culture

During the panel discussion another issue that significantly affects energy efficiency in the region – responsibility and culture – also came up.

In one of his first slides in his presentation, White showed the disproportionate impact of climate change on SIDS as compared to other regions.

He, however, noted that stakeholders may only be aware of the disproportionate effect of climate change in retrospect, after a disaster.

He added to that the fact that with regard to regulatory costs and the cost of fuel, the government usually absorbs the impact.

“I think it was Mia Mottley who said it, and even before her the Dominican prime minister. They said our carbon footprint is miniscule but we get the full brunt of it all. The interesting thing is the key stakeholders are us, but the key polluters do not come from the Caribbean states,” he said.

“That doesn’t negate the fact that we need to transition,” Driver retorted. “That communicates an argument in investing in resilience.”

Chen said while it is true that the Caribbean represent a small percentage of emissions, it is not perfect.

“If we look at carbon dioxide emissions for hotel rooms, the Caribbean tourism sector is actually the second worst in the world. We need to understand that, yes, we are small and we do not produce as much carbon as compared to China, but on certain measures we are not as great as we think we are.”

She added that despite the fact that the EU and IDB provided recommendations to the hotel and tourism industry more than ten years ago, very little was implemented. This is despite the fact that many islands have the highest electricity rates in the world at about 30-40 cents per kilowatt/hour.

Speaking to Business Day, Chen said while large organisations like Yara, Ansa and Phoenix Park Gas Processors Ltd (PPGPL) are already doing their part, people can also play an immediate role in reducing the region’s carbon footprint and GHG emissions at no real cost.

“It’s a low burden, but high impact strategy,” Chen said. “In other words what we’re trying to say to people is you don’t need to run your air conditioning at 65 degrees Fahrenheit (18 degrees celsius). Just by turning off the lights in the house during the day; nighttime for security yes, but during the daytime just switching them off. Or turning off the fan when you leave for work.

“You don’t need to have it blasting and have the windows open. You just need to be judicious about energy usage.”

Founding chamber president and CEO Eugene Tiah said a change in behaviour could see a reduction in energy demand in TT by 10 per cent.

“Currently 260 cubic feet of gas per day is used for electrical power production. If we are able to save 10 per cent of that it would be equivalent to 26 million standard cubic feet per day.

“A typical ammonia plant, a full ammonia plant, uses about 45 to 50 million standard cubic feet per day, so you could have enough gas for another half of an ammonia plant. So it's significant,” he said.

Both Tiah and Chen noted that the region has adopted an attitude which suggests it is not responsible for climate change.

“We have it in TT because of low energy prices, but across the Caribbean the mindset is we are the victims. It is the developed world that created this problem.

“Well no. It is also our problem.”