The Tribune

By LARRY SMITH

PRIME Minister Perry Christie says climate change “threatens the existence of The Bahamas as we know it”. So what does the recent Paris agreement to tackle climate issues mean for The Bahamas – and the rest of the world?

In case you didn’t know, almost 200 countries spent two weeks at the end of last year crafting the world’s first universal agreement – one that signals the end of the fossil fuel era. The goal is to peak greenhouse gas emissions “as soon as possible” in order to keep global temperatures from rising more than two degrees Celsius above pre-industrial levels.

Christie was among those in Paris pushing for more – arguing that warming should be kept below 1.5 degrees. “The Bahamas and other small developing island states are seeing … life-threatening impacts, and the science tells us we can only expect more over time,” he said.

Unprecedented

recognition

Politically, the Paris agreement marks an unprecedented global recognition of the risks of climate change. Economically, it will push investment towards adaptation measures and clean energy. Beginning in 2020, industrialised countries will spend at least $100bn a year to help developing nations fund their transition to green technology.

The good news is that the agreement was unanimous – and the most significant effort to address climate change ever. However, it is also mostly aspirational. As the Economist magazine explained in generally favourable terms: “It requires countries to act on climate change, and to increase their actions over time, but it says nothing concrete about how much anyone has to do.”

The editors of the Economist acknowledged that public opinion and international pressure had produced the Paris pledges. “The hope is that similar bottom-up processes, rather than unenforceable UN (United Nations) mandates, will drive up the level of action in decades to come.”

As part of the conference process, The Bahamas submitted its plan to address climate issues in November. The plan says we will adapt to climate impacts while pursuing “a low-carbon pathway in conformity to growing international and public pressure for environmentally friendly development”.

Energy policy

But most of what it outlines is as vague and non-specific as that airy summation. For example, the government says it will “promote the use of less carbon-intensive fuels” by “meeting the National Energy Policy’s target of 30 per cent renewables in the energy mix by 2030”.

Unfortunately, we have no “energy mix” (being 100 per cent dependent on fossil fuels), and there is no discernible strategy to achieve such a goal. This is despite the fact that successive governments have been working on “energy reform” for a decade or more. Statements have been made about clean energy, but there are no concrete results.

On his return from Paris in December, Environment Minister Ken Dorsett gave us an idea of the government’s muddled thinking in this regard: “The debate so far has been about fossil fuels,” he confided to ZNS, “but there is evidence that we have natural gas in The Bahamas”.

Just to be clear, oil, gas and coal are all fossil fuels – and burning any of them makes a huge contribution to global warming. Dorsett was commenting on the government’s ongoing legislative efforts to promote oil drilling in Bahamian waters, which ironically came hard on the heels of the Paris agreement.

Two-faced

So we are in the decidedly two-faced position of not having made any concrete move towards clean energy, while Dorsett and Christie run around the world worrying about environmental threats. And to cap it all off, we are now promoting the development of fossil fuels in our own territory.

The Paris conference and the passage of the petroleum bills – both of which happened in December 2015 – mark a definite fork in the road for the islands of The Bahamas. The legislation sets rules for hydrocarbon exploration and production and creates an investment fund for anticipated revenues.

As opposition leader Dr Hubert Minnis pointed out in Parliament, “Our primary industry relies on the ocean, (which) is a direct source of livelihood and recreation for many. Petroleum drilling gone wrong could seriously impair (our) quality of life.”

Minnis argued that instead of oil, The Bahamas should focus on the environment: “We should seek to establish a UN-sponsored marine research and monitoring centre for the protection of regional fisheries – as many migratory fish pass through our waters.” He believes such a proposal could produce hundreds of high-paying jobs and help address poaching, illegal immigration and other issues.

Long Island MP Loretta Butler Turner painted an even more contrasting picture: “In the aftermath of Joaquin and with scientists predicting more severe hurricanes as a result of climate change, we have a grave moral responsibility to protect our people from the dire effects of rising sea levels and other challenges of climate change.” She said Bahamian reefs and fisheries risked major damage from oil pollution and the chemicals used to clean up spills, including genetic damage to marine life as was the case with the 2010 Gulf of Mexico catastrophe.

“We risk doing great harm to our tourism industry. We risk destroying our very way of life. We need a full public debate about how the oil industry can fundamentally change our country.”

Revenue strategy

And the Bahamas Petroleum Company (BPC) made the point even more strongly - calling the legislation “a clear expression of support for our industry”.

A publicly traded company, BPC has invested millions prospecting for oil here, and it currently has licences to drill in several areas (along with other foreign companies). Pulling the rug from under these investors would no doubt have some undesirable consequences.

Revenue benefits may accrue from a hydrocarbon industry in The Bahamas many years down the road. But the costs must also be weighed – in the context of climate change risks. And remember that during this period, the world will increasingly be turning away from fossil fuels.

Some argue that if drilling proceeds, as expected, our biggest challenge is to agree on a strategy to use the money to fund a transition to a low-carbon economy and adapt to climate change impacts – in line with the commitments made in Paris.

This could be presented as a valid reason to drill. But the gross lack of transparency and accountability displayed by this government in particular – and all Bahamian governments to one degree or another – does not inspire confidence that such a course could ever be implemented.

Recent revelations at the majority government-owned Bank of the Bahamas are clear evidence of the level of financial irresponsibility our system tolerates. The sovereign wealth fund formed to manage oil revenues will be run by a five-member board consisting solely of representatives from government agencies, who are all appointed by the Prime Minister.

Meanwhile, Christie talks airily about making “the necessary shifts in investments, and business models toward sustainable development and renewable energy”.

Butler-Turner’s response is “they talk clean energy overseas, while pushing unclean energy here at home. The Prime Minister jets around the world pretending to be a committed environmentalist, while at home he’s pressing the case for oil drilling.”

Energy transition

But let’s leave local politics aside for the moment and look at the broader issue of switching to a clean energy economy. In 2014, the world was getting 14 per cent of its energy supply from carbon-free sources. By 2050, that figure will have to be 90 per cent if we are to achieve the climate goals set out in Paris last month, experts say.

Technologies are available now to achieve this (and new technologies will continue to be developed), but the biggest drawback to a transition is the magnitude of global subsidies underpinning fossil fuel use. Current energy prices are well below levels that reflect their true costs, according to recent estimates by the International Monetary Fund (IMF).

Fossil fuels benefit from global subsidies of more than $5 trillion a year, the IMF says, representing more than six per cent of global GDP. Most of these subsidies arise from the failure to charge for the cost of environmental damage – and about one-quarter of the total is from climate change impacts. Tax concessions for producers and consumers, and other local factors, account for the rest.

Unfortunately, many of the subsidies the IMF highlights go toward finding new reserves of oil, gas and coal – which we know must be left in the ground if we are to avoid catastrophic, irreversible climate change. Experts say that if we get the pricing of fossil fuels right, the argument for subsidies on clean energy will disappear.

Oil subsidies

The United Kingdom, for example, supports its coal, oil and gas industries to the tune of $4.2bn a year. And in the United States, the total annual value of state and federal fossil fuel exploration, production and consumption subsidies is $32.8bn.

In fact, governments across the G20 countries are providing $452bn a year in subsidies for the production of fossil fuels, according to Oil Change International, a research and advocacy group focused on facilitating the transition toward clean energy. The subsidies include direct spending and tax breaks, investments by state enterprises and public finance from state-owned institutions.

In The Bahamas, we have the ongoing environmental disaster at the Clifton power station, which the government is currently spending $20m to address. And who knows how much has been spent over decades to clean up spills and avert disasters around the country?

The government exempts the Bahamas Electricity Corporation (BEC) from taxes, guarantees its debt and allows cronies (including the former BEC chairman himself) to ignore bills. These are all subsidies. And the problem is compounded by the lack of any strategy to facilitate clean energy or any plan to promote energy efficiency.

Policy goals

What we do have is a still secret – and likely to remain secret – agreement with a US company to manage BEC, and a national energy policy that sets out four goals.

The first is for Bahamians to become “well aware of the importance of energy conservation, use energy wisely and continuously pursue opportunities for improving energy efficiencies, with key economic sectors embracing eco-efficiency”. I can think of no initiatives or benchmarking to achieve this goal.

The second is to modernise energy infrastructure. The third goal is for The Bahamas “to become a world leader in sustainable energy”. And the fourth is to achieve “high levels of consultation, citizen participation and public-private sector partnerships” in the advancement of energy sector reform.

These last two objectives defy reality to such a degree that we have to wonder if the policy’s authors were on crack when they wrote it.

The bottom line here is that the world – and The Bahamas – must transition to a clean energy economy within the next few decades or we and our children will be in big trouble. The good news is that such a transition is not an impossible dream.

Microsoft used to have close to a 100 per cent share of the worldwide personal computing market. Now, in terms of total devices shipped, Microsoft’s share is about 14 per cent and it no longer rules over the tech world. The same will be true of fossil fuels. As climatologist and former NASA director James Hansen points out: “Either we will change our ways or they will be changed for us.”

• What do you think? Send comments to lsmith@tribunemedia.net or visit www.bahamapundit.com.