Barbados aims to become the most environmentally advanced green country in Latin America and the Caribbean. That goal stems from Protocol VI (2011-2013) of the Social Partnership between the Government, and workers and employees’ representatives of Barbados (“the Social Partners”). The Protocol describes the Social Partners as fully subscribing to the concept of a low carbon resource-efficient green economy. It further notes their support of the promotion of all aspects of a green economy in Barbados.
The above goal is a further attempt to comply with Barbados’ international obligations to mitigate global warming and climate change. It is sufficient to note that since acceding to the United Nations Framework Convention on Climate Change (“UNFCC”) in 2000, and since ratification of the Kyoto Protocol in 2000, Barbados has engaged in various initiatives toward fulfilling its international obligations under those instruments. Most notably, Barbados has proven its energy efficient capacity to the world. It is ranked as fifth (5th) in the world for solar water heater penetration. This distinguished achievement is a good foundation from which to make the above goal a reality.
Barbados’ goal of a low carbon resource-efficient green economy has boosted investment attraction. A few incentives are readily available for utilization. For example, the present Government has set up a Smart Energy Fund to assist small and medium size enterprises and entrepreneurs with financing at subsidized interest rates of 3.5% for renewable energy-generating and energy-conservation projects.
As Minister of Finance the Hon. Christopher Sinckler noted in the last budgetary proposal, a strong focus on Renewable Energy (“RE”) is a vital component of restructuring the Barbadian economy in the near future. In his address to the nation, future incentives were promised for businesses generating and distributing electricity from a renewable energy source, business producing, distributing and/or installing renewable energy systems for electricity generation and energy efficient products.
Proposed incentives include provisions for building materials and supplies for construction of a facility dedicated to the generation and sale of electricity from a renewable source will be duty free and VAT free. Also, that developers and manufacturers and installers of RE products will be granted an income tax holiday of ten (10) years.
In July of this year, the Barbados Chamber of Commerce and Industry, in association with the Association of Chartered Certified Accountants hosted a business seminar to underscore the urgency of a more aggressive effort aimed at helping Barbados achieve its goal of becoming the leading sustainable green economy in the Caribbean. One of the seminar’s main objectives was to examine the feasibility of exploiting the incentives proposed by the Minister of Finance. William L.A Hinds, government representative at the seminar, acknowledged the apparent setbacks involved in gaining access to those incentives. For example, budgetary proposals have to endure the legislative process before becoming enforceable. The next general election is to take place in the not too distant future. It is unknown whether Government policy on greening the Barbados economy may be modified if a new government assumes authority.
Barbados’ green goal is nothing less than impressive; however, this goal will only be realized where insistent efforts are made to guarantee that it comes to fruition. This would dictate that the necessary incentives are put in place. Doing so will motivate investors to more readily contribute positively to the economy. Further benefits of such efforts would include a more diversed economic portfolio.
It is predicted that notwithstanding the obvious setbacks of the legislative process, or the outcome of the next election, it is more likely than not that sensible energy policies will continue to be adopted. This prediction is made especially in light of Barbados’ international obligations (noted above) which are to be honoured even if there were to be a change in administration. It is sufficient to note that, it in the interest of greening the economy, policy makers should embrace the implementation of practical incentives for local and foreign investors.
Taking Barbados’ potential a step further, the jurisdiction could very well establish a blueprint for the region not only in terms of RE policies and programs but also implementation of RE generation whether it be from wind, waste, sun or water. Barbados has already drawn a lot of interest from RE companies both far and near as they recognize the island’s strategic advantage as the regional leader in RE and its status as the region’s logistical hub. This combined with the existing incentives and the potential for even more incentives has Barbados well-positioned as a model jurisdiction for RE that could result in a beneficial domino effect for the island’s economy.