Economics versus energy transition at Colombia summit

T&T’s par­tic­i­pa­tion this week in the First Con­fer­ence on Tran­si­tion­ing Away from Fos­sil Fu­els comes at a crit­i­cal junc­ture, as de­bate in­ten­si­fies over how the coun­try can bal­ance its eco­nom­ic de­pen­dence on oil and gas with the glob­al push for a struc­tured and fi­nanced en­er­gy tran­si­tion.

“As soon as the eco­nom­ics gets bad for oil and gas, peo­ple get in­ter­est­ed in re­new­ables. As soon as oil and gas be­come more af­ford­able, peo­ple drop it.”

That was the blunt as­sess­ment from en­er­gy ex­pert An­tho­ny Paul, as he sat down for an in­ter­view with the Sun­day Busi­ness Guardian last week.

The in­ter­view came on the heels of the First Con­fer­ence on Tran­si­tion­ing Away from Fos­sil Fu­els, which takes place in San­ta Mar­ta, Colom­bia, from April 28 to 29.

In 2007, Paul was asked by the Unit­ed Na­tions De­vel­op­ment Pro­gramme (UNDP) to con­sid­er how this coun­try could se­ri­ous­ly move away from oil and gas to­wards re­new­able en­er­gy.

His study was com­pre­hen­sive.

“The fo­cus of the study was, why are we do­ing nat­ur­al gas or pow­er? What are the ben­e­fits? Nat­ur­al gas gives you a whole lot of ben­e­fits. Rev­enue, tech­nol­o­gy, and in­dus­tri­al­i­sa­tion. It al­so gives us forex. Now, can we go about us­ing re­new­ables to get not on­ly the en­er­gy, but those things as well? The rea­son I tell you that is be­cause peo­ple move in­to the most eco­nom­i­cal­ly vi­able form of en­er­gy,” he said.

T&T is un­der­stood to have a seat at the ta­ble at the con­fer­ence, and ac­cord­ing to in­dus­try ex­perts, this coun­try’s pres­ence is not an oxy­moron giv­en its sta­tus as an oil and gas-based econ­o­my, but rather an op­por­tu­ni­ty to help shape a tran­si­tion away from fos­sil fu­els.

Ef­forts to as­cer­tain who would be rep­re­sent­ing this coun­try, as well as what T&T hopes to gain from the con­fer­ence, from En­er­gy Min­is­ter Dr Roodal Mooni­lal, were un­suc­cess­ful.

Colom­bia and the Nether­lands will host the con­fer­ence, which is de­signed as a space for coun­tries, sub­na­tion­al gov­ern­ments and oth­er stake­hold­ers that recog­nise the need to im­ple­ment a tran­si­tion away from fos­sil fu­els in a just, or­der­ly and eq­ui­table man­ner, in line with cli­mate goals and the best avail­able sci­ence.

Paul warned of the chal­lenges the con­fer­ence faces.

He stat­ed, “Politi­cians put eco­nom­ics first, then the so­ci­ety and the com­mu­ni­ties, and then the en­vi­ron­ment, and the politi­cians have five-year time­lines. So­ci­eties, com­mu­ni­ties, es­pe­cial­ly in­dige­nous and poor ones, look at the longer term, but the pow­er re­sides in the short-term stake­hold­ers. The pow­er to make choic­es re­sides in the politi­cians and the oil com­pa­nies, so it’s that im­bal­ance in pow­er, in my mind, that even­tu­al­ly de­ter­mines the out­come. Look­ing at tran­si­tion­ing from fos­sil fu­els to re­new­ables, you re­al­ly have to look at how to swing the pen­du­lum from that bal­ance of pow­er.”

Paul, who is al­so chair­man of the Lloyd Best In­sti­tute, was equal­ly crit­i­cal of the re­gion for not do­ing enough re­search in­to what the best tran­si­tion for the Caribbean is.

Hav­ing pub­lished a pa­per in 2008 ti­tled “To­wards a Strat­e­gy for Mov­ing Trinidad and To­ba­go to Re­new­able Tech­nolo­gies,” he said, “The re­search on re­new­able tech­nol­o­gy is be­ing dri­ven by peo­ple in the north us­ing their cli­mate and their cir­cum­stances. Peo­ple in the south are the ones who will be most af­fect­ed. We’re not do­ing the re­search. We’ll be con­sumers of their prod­ucts. We will buy so­lar pan­els. We will buy wind­mills. You have to buy parts. What that means? You have to get for­eign ex­change.”

In­stead, Paul said the re­gion should be do­ing re­search in­to things like bio­fu­els which can bet­ter be adapt­ed to its cir­cum­stances.

He added that the on­ly suc­cess­ful out­come of the con­fer­ence will be one which moves con­ver­sa­tion to ac­tion.

“At the end of this con­fer­ence, what does it take away? Is it a state­ment? Is it an ac­tion plan? If so, are there re­sources ded­i­cat­ed to con­duct these ac­tiv­i­ties? Mean­ing peo­ple as­sign re­spon­si­bil­i­ties and fi­nance to do it. With­out those, it is a talk show,” Paul said.

Mean­while, po­lit­i­cal di­rec­tor of the Fos­sil Fu­el Treaty Ini­tia­tive Gillian Coop­er al­so said that, giv­en geopo­lit­i­cal de­vel­op­ments, par­tic­u­lar­ly the Iran con­flict, the con­fer­ence has be­come even more crit­i­cal.

She stat­ed, “The in­ten­si­ty around us means that the out­come is even much more im­por­tant to see a path­way out of it. From my stand­point, work­ing as the po­lit­i­cal di­rec­tor of the Fos­sil Fu­el Treaty Ini­tia­tive, we al­so feel that le­gal in­stru­ments are go­ing to be re­al­ly im­por­tant to be able to cre­ate the con­di­tions where­by, in par­tic­u­lar, glob­al south coun­tries have a stronger voice in the mul­ti­lat­er­al land­scape on the needs that they re­quire eco­nom­i­cal­ly to be able to tran­si­tion.”

She went fur­ther, say­ing, “I would like to see greater at­ten­tion on those kinds of in­stru­ments to ad­dress the gov­er­nance around the man­age­ment of the phase-out so that we have an or­der­ly tran­si­tion and it’s not some­thing which dis­ad­van­tages some and cre­ates a dis­or­der­ly tran­si­tion which could on­ly harm coun­tries such as ours.”

Ear­li­er this year, Coop­er and her team held a re­gion­al con­ven­ing in St Lu­cia to de­ter­mine the Caribbean’s po­si­tion ahead of the con­fer­ence in Colom­bia.

The con­ven­ing brought to­geth­er civ­il so­ci­ety ac­tors, gov­ern­ment of­fi­cials and stake­hold­ers from around the re­gion.

At the con­ven­ing, gov­ern­ment of­fi­cials called for a clear un­der­stand­ing of what tran­si­tion­ing ac­tu­al­ly re­quires of the econ­o­my and so­ci­ety. They al­so called for in­ter­na­tion­al com­pen­sa­tion for leav­ing re­sources un­tapped, while stress­ing that reskilling is vi­tal for the tran­si­tion.

Coop­er said of T&T’s in­volve­ment, “I think that the role of coun­tries like T&T, which is a small state, but al­so cli­mate-vul­ner­a­ble it­self, but al­so eco­nom­i­cal­ly de­pen­dent on its fos­sil fu­el rev­enues, their voice is re­al­ly crit­i­cal in this diplo­mat­ic space. It is in­creas­ing­ly dif­fi­cult for coun­tries such as T&T to be able to tran­si­tion from fos­sil fu­els, par­tic­u­lar­ly when it oc­cu­pies such an im­por­tant, crit­i­cal space in the eco­nom­ic make­up of the coun­try.

“At the mo­ment, where there is an op­por­tu­ni­ty to talk about the tran­si­tion from fos­sil fu­els and to har­ness in­ter­na­tion­al co­op­er­a­tion that is re­quired for coun­tries to be able to tran­si­tion - be­cause most coun­tries can­not do this alone.

“The kind of rules gov­ern­ing fi­nanc­ing and en­er­gy it­self are stacked against coun­tries like ours. It’s im­por­tant for them to be able to re­al­ly talk hon­est­ly about what are the re­quire­ments that a coun­try such as T&T would need to be able to gain that in­ter­na­tion­al sup­port to be able to tran­si­tion, ad­dress­ing is­sues around debt, around in­vest­ment, around the kind of mech­a­nisms re­quired in the eco­nom­ic de­vel­op­ment of the coun­try to be able to di­ver­si­fy their economies.”

She added that what hap­pens in Colom­bia will be close­ly watched in­ter­na­tion­al­ly.

“The world will cer­tain­ly be watch­ing what comes out of the con­fer­ence. They will be wait­ing to see what the out­comes are and how that then feeds in­to oth­er mul­ti­lat­er­al spaces where this con­ver­sa­tion is go­ing on, and that’s not just in cli­mate spaces, but it’s cer­tain­ly in eco­nom­ic de­vel­op­ment, re­gion­al, all sorts of oth­er fi­nan­cial spaces, mul­ti­lat­er­al spaces where fi­nanc­ing is dis­cussed. I would imag­ine that based on what they see, then they’ll make a de­ci­sion as to how they would want to en­gage,” she stat­ed.

As the con­fer­ence ap­proach­es, the ques­tion re­mains whether T&T will move be­yond di­a­logue and de­fine a clear path for­ward, or con­tin­ue bal­anc­ing eco­nom­ic de­pen­dence on fos­sil fu­els with grow­ing pres­sure to com­mit to a struc­tured and fi­nanced en­er­gy tran­si­tion.