Summary of Guest Editorial by David Gumbs, James Fletcher & Justin Locke
Read the editorial in full here.
The global economy is on lockdown and the predictions are staggering. What is becoming increasingly clear is that the world after COVID-19 will look very different than it did before COVID-19. The long-term realities of the coronavirus are already clear in one regional economy: The Caribbean. Over the past three decades, nearly every economy in the region transformed to depend on tourism, and today the Caribbean economy is primarily reliant on this single sector. The region is also subject to repeated crises, with ten Category 5 hurricanes hitting the region in the last 15 years, and five of those occurring in the last 3 years. The coming 2020 hurricane season is predicted to be 140% above average. Because of these disasters and the Caribbean’s focus on a single, volatile sector, it is likely to be the first domino to fall in the post-COVID-19 world.
Similar to after the 2008 financial crisis, bailouts and stimulus packages can be expected across the globe. Any multilateral stimulus should be designed to help the Caribbean transition to a new resilient economy that is anchored in sustainable development. The foundation of the future is clean energy. It is on top of this foundation that new diverse industries such as modern agriculture, information technology, financial services and manufacturing can be built.
Nowhere is the business case clearer or the need for the clean energy transition more urgent than the Caribbean region. This is due to a confluence of three factors, namely: (1) Caribbean countries have some of the highest electricity costs in the world because of their reliance on a centralized, fossil fuel electricity system architecture, (2) they are highly exposed to disruption from natural hazards, some of which are becoming more prevalent and severe due to climate change, and (3) they all have excellent, under-utilized renewable energy resources.
As a result of this unique set of ingredients, the Caribbean region has a clear pathway to become the world’s first economy built on sustainable, resilient and renewable energy.
The International Monetary Fund, World Bank, Inter-American Development Bank and the Caribbean Development Bank should work with Caribbean leaders to create a dedicated stimulus package aimed at enabling the energy transition as rapidly as possible. Global philanthropy also has a role to play through impact investing designed to catalyze fully commercial private sector investment in clean energy. In the process, clean energy investment in the Caribbean can serve as a guide for future stimulus packages all over the world, as the long-term impacts of COVID-19 manifest regionally. Investments into the clean energy sector present Caribbean countries with an opportunity to: (i) bring stability and assurance to an otherwise volatile energy sector; (ii) urgently create new jobs; (iii) reduce and stabilize electricity costs to attract new industries; (iv) improve the competitiveness of agro-processing and other manufacturing sectors; (v) enhance resiliency; (vi) shrink the region’s carbon footprint and fast-track commitments to the Paris Climate Agreement; (vii) decrease leakage of foreign exchange, and (viii) diminish dependence on imported fuels.
In order to achieve this, the international community and philanthropy must support Caribbean governments to:
- Focus on re-tooling workers to give them the skills needed in the clean energy sector, modern agriculture, manufacturing, and information technology
- Boost incentives for electric vehicles (EVs) and design policy measures to unlock EV supply chains as well as investment in EV charging infrastructure
- Forgive overdue electricity bill payments for the poor and local businesses affected by the shutdown
- Backstop electric utility credit and access to low-interest credit while providing liquidity to government-owned utilities to sure up their finances and work with investor-owned utilities to incentivize public-private sector investments – while providing the necessary assurances that accounts receivable will be paid in full
- Create clean energy lines of credit designed to backstop power purchase agreements and capital leases to crowd-in private sector investment in renewable generation, and
- Put people to work immediately in the construction sector by undergrounding overhead transmission lines so that they will not be knocked down by the next storm.
Collectively, these actions will help create thousands of jobs, reduce regional emissions and reduce long-term dependence on imported diesel, helping the Caribbean to create a new foundation for a diverse, resilient and sustainable economy.
This may be a once in a lifetime opportunity to demonstrate a new vision for the region’s climate future and become an example for the world – transforming its citizens into controllers of their destiny and leaders of the clean energy era.
About the Contributors
David Gumbs is the former Chief Executive Officer of the Anguilla Electricity Company, Ltd (ANGLEC). David is a graduate of the University of Hartford with a Master of Science in Accounting and Connecticut College with a Bachelor of Science in Economics and Africana Studies. David is a Certified Public Accountant (CPA) with more than twenty years’ operational and managerial experience. Some of David’s former roles include Chief Financial Officer at ANGLEC and Senior Director, Treasury and Financial Analysis at Sodexo, Inc. Under David’s leadership, ANGLEC embraced renewable energy technologies and achieved one of the region’s highest penetration levels in 2016. He successfully negotiated several solar PV and waste-to-energy power purchase agreements for the integration of alternative energy sources into ANGLEC’s generation portfolio. David implemented an aggressive public relations and marketing strategy that strengthened the company’s brand and customer satisfaction scores and improved the company’s performance. He brought efficiencies and cost savings to the organization by incorporating industry-leading solutions such as advanced metering, grid automation, work order automation, and vehicle fleet management into ANGLEC’s operations. Recognizing the Company’s exposure to severe hurricanes, David launched the Company’s first aggressive undergrounding initiative in 2018. Most notably, David led the historic Hurricane Irma recovery efforts restoring the grid to 100 percent in 100 days. Hurricane Irma devastated the island—destroying over 60 percent of its infrastructure. Under David’s leadership and in collaboration with colleagues throughout the region and various partners, including CARILEC, the UK Government, and the Government of Anguilla, the island’s grid was restored in record time—earning him much recognition.
James Fletcher is a former Minister for Public Service, Information, Broadcasting, Sustainable Development, Energy, Science, and Technology in Saint Lucia. He served in that position from December 2011 to June 2016. During his tenure, James led Saint Lucia on an aggressive path toward the modernization of the energy sector with a strong push toward the use of renewable energy. He has been very active in international climate change negotiations. He played a leading role in the Caribbean’s “1.5 to Stay Alive” climate change campaign. During the COP21 negotiations on the Paris Agreement in 2015, he was a member of a small group of 14 ministers from various countries around the world who were selected to assist the COP President in achieving consensus on the more contentious elements of the agreement. Prior to his tenure as a Cabinet Minister, he served as the Director of Social and Sustainable Development at the Secretariat of the Organisation of Eastern Caribbean States, the Cabinet Secretary in the Government of Saint Lucia, and the Permanent Secretary in the Ministry of Agriculture, Forestry, and Fisheries. James Fletcher currently manages his own company, SOLORICON, which provides consulting services in sustainable energy, climate change, water policy, public policy, and agriculture. In 2017, he wrote and published a book entitled Governing in a Small Caribbean Island State. He also authored the Regional Strategic Action Plan for Governance and Building Climate Resilience in the Water Sector in the Caribbean. He coproduces and hosts a weekly television program called PSI—People Solutions Ideas. Dr. Fletcher holds an Honours Bachelor of Science degree in Biochemistry from the University of Ottawa, Canada, and a Doctor of Philosophy degree in Crop Physiology from the University of Cambridge, England.
Justin Locke is a Senior Director at Rocky Mountain Institute (RMI). He co-leads RMI’s Empowering Clean Economies Program and is the senior lead for the Islands Energy Program (https://rmi.org/our-work/global-energy-transitions/islands-energy-program/). Justin also is responsible for international strategic partnerships and resource mobilization with the multi-lateral and bilateral community at RMI. Justin previously held the position of Infrastructure (Disaster Risk Management) Specialist at the World Bank where he managed the Caribbean adaptation and infrastructure portfolio. Before his tenure at the World Bank, Justin worked for the United Nations Development Program (UNDP) in the Pacific Region holding the role of Development Specialist at the UNDP Regional Pacific Center based in Fiji, which provides technical assistance to over 14 Pacific island countries. He also held the position of Community and Recovery Specialist for the UNDP Multi-Country Office based in Samoa where he managed the Polynesian subregion portfolio. He holds a master’s degree in Public Administration in International Management from the Monterey Institute of International Studies in Monterey, California and a bachelor’s degree from the University of California, Davis.