Effective policy for renewables expansion in the Caribbean

I thoroughly enjoyed being part of Latin America and the Caribbean Climate Week 2021 held virtually this week. I am always so proud to see the Caribbean demonstrating such strong leadership, technical expertise, and progressiveness in climate negotiation. We may be challenged by size, scale, access to finance, and particularly climate-vulnerable economies, but rather than resigning to our plight, we are serious about our own mitigation targets and lobbying for climate vulnerable communities the world over.

What was clear to me from Climate Week is that the Caribbean is going to COP 26 with some clear goals: to put the pressure on more ambitious NDC targets from larger emitters; to prioritize negotiations on adaptation, loss & damage; to secure commitments for blended forms of adaptation finance; and to support consensus on a carbon market mechanism; and to push from commitments to action.

My very own Jamaica is forging the way on finance, working with partners to integrate climate analytics into investment and insurance risk assessment tools, so that we can talk about climate risks in more standard, specific financial terms, and develop financial instruments to suit the need. This investment prioritization tool will be presented for the first time at COP 26. Go Jamaica!

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Latin America and the Caribbean Climate Week 2021

Speaking of climate finance, while we know that renewables and storage are a big part of building economic and physical resilience for the islands, the question remains how to grow these markets faster? What actually works? My latest study, which conveniently also came out this week, uses a fixed effects method to understand correlation between energy policies implemented across the Caribbean and their impact on expanded RE capacity. I did this study with colleagues at UC Berkeley and RLI. I think this is an important study because the Caribbean is usually lumped into “Latin America & the Caribbean” on policy studies, so the nuance of how policy measures behave in our specific contexts can often be lost. Alongside other factors, this can limit our ability to optimize policy design, target public finance, and send efficient signals to the private sector. 

Visualizations of regression results showing significance of correlation between five policy instruments and capacity growth for solar, wind and total RE across 31 islands of the Caribbean (Source: Kersey, Blechinger, and Shirley, 2021)

To our knowledge, this is the most rigorous statistical analysis on RE policy done for the Caribbean, and the most comprehensive and up-to-date database of RE policies currently active in the region. Our study finds that feed-in-tariffs and net-metering policy have actually been the most effective policy mechanisms in unlocking RE growth in the region thus far. We share hypotheses and specific case studies in the paper. The full RE policy database is available (contact me if interested). I hope applied studies like this can be useful data and insight for our policy-makers, working hard to create a future where we do not just survive, but thrive in a changing climate. Onward Caribbean people!

Find our article here: https://doi.org/10.1016/j.enpol.2021.112340