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Bridgetown Initiative to help raise funds to finance renewable energy switch

by Marlon Madden
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By Marlon Madden

Barbados’ transition to becoming 100 per cent clean energy-reliant is expected to cost around BDS$14 billion (US$7 billion), Minister of Foreign Affairs and Foreign Trade Kerrie Symmonds has disclosed.

This revelation came on Thursday, as officials expressed hope that the  Bridgetown Initiative will help raise funds needed by climate-vulnerable and developing countries to build resilience and respond effectively to climate shocks.

Symmonds said it made no sense for countries to be attending global conferences and leaving with promises from rich nations that they would provide funding and the promises are never kept. 

“The fact of the matter is that the transition we need so desperately to have is a very costly transition,” he said, while indicating that the wind energy transition needed in Barbados was likely to cost some BDS$3 billion.

“The totality of that which we need to do to transform this island into being entirely fossil fuel-free and renewable energy-driven will be in the vicinity of US$5 billion to US$7 billion,” said Symmonds.

Speaking during the virtual Vice-Chancellor’s Forum on the Bridgetown Initiative, which was organised by the UWI, Cave Hill Campus, the minister said: “Above and beyond the cost of the transition, we have to treat to the issue of accessibility to some of the technologies and this is a major issue.”

The senior government minister cited delays associated with sourcing electric vehicles and battery storage technologies among the challenges.

While questioning if the Bretton Woods Agreement which gave rise to the World Bank and the International Monetary Fund (IMF) was still serving any purpose, Symmonds suggested that the same level of debt restructuring given to some countries following the second World War be given to developing countries.

“We ask for similar types of treatment, recognising that the transition towards renewable energy and adaptation and resilience-building comes at substantial cost,” he said.

In addition to suggested reform of the IMF and World Bank, the Bridgetown Initiative is proposing the establishment of a global fund that mobilises private finance and financial reserves of rich nations to mitigate climate change shocks. It also suggests restructuring sovereign debt to free up finances and prevent fiscal crises in small island developing states and other low and middle income countries.

The Bridgetown Initiative is expected to raise some US$5 trillion dollars to assist vulnerable countries affected by a climatic event.

Symmonds said that in addition to public funding, companies that rake in “egregious profits” from activities that contribute to climate change should be made to pull their pockets.

“It is only fair that if we are talking about trying to finance adaptation and climate resilience that we also have to speak to the private sector enterprise. In circumstances where people are making unprecedented and what could be called egregious profits, for them to leave some of that money on that table with regard to trying to assist the planet in making the adjustment,” said Symmonds. 

Professor Justin Robinson, Professor of Finance and Pro Vice-Chancellor for the Board of Undergraduate Studies at the University of the West Indies, Cave HIll Campus, said despite a general global consensus on what was to be done, the world was “failing quite badly” in its efforts to lower carbon emissions and build climate resilience. 

“Our current policies and on the current trajectory, we can see warming of between 2.7 to 3.1 degrees celsius, which would really be a disastrous outcome especially for us in these climate-sensitive parts of the world,” he warned.

He said a major part of the reason the world was failing to adequately address the climate crisis was the fact that the required “dramatic transformation” was extremely expensive.

In fact, Robinson pointed to a McKinsey study that he said indicated that the funding required for countries to achieve net-zero transition to the year 2050 was about US$9.2 trillion annually.

In addition to the need to switch to renewable forms of energy and electric vehicles to achieve lower global temperatures, countries would also need to drastically lower emissions from factories, and stop the sale of fossil fuel boilers, among other measures.

“Part of the reason we are so badly off-track is that this is a massive transition in the way we live, but also a massively expensive transition,” said Robinson.

He said while monies have been promised by rich, developing nations to help fund climate change mitigation measures in developing countries “the money has actually not been delivered”.

Welcoming the Bridgetown Initiative, Robinson indicated that small-island and climate-vulnerable states were simply unable to raise the level of financing needed without plunging further into debt. 

marlonmadden@barbadostoday.bb

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