Fiscal incentives promoting REEE measures in Trinidad and Tobago

Abstract

Purpose – Dependence on foreign energy supplies have resulted in some islands successfully harnessing alternative and renewable energy (RE) sources in order to provide a small degree of self-sufficiency. However, the development of Trinidad and Tobago's (T&T's) RE industry has stagnated largely due to the existence of substantial energy subsidies, which present cheap fuel and electricity prices thus providing a disincentive to RE investment. The purpose of this paper is to seek to re-enforce the necessity for an indissoluble government intervention in the establishment of well-designed, coordinated and innovative public-private partnerships for a successful RE industry in T&T. Design/methodology/approach – This paper is based on a review of relevant social and economic literary sources; the research topic has been meticulously investigated. Findings – Initial outcomes indicate that the principal facilitators of RE proliferation in the Caribbean, and more so T&T, will require: gradual reduction of the energy subsidy; declining project costs via fiscal incentives and grant financing; expectation of beneficial rates of return on investment through the guarantee of optimal prices for renewable electricity or the revenue gained from the sale of carbon credits; and capacity building, institutional strengthening and implementation of appropriate legislative and regulatory instruments which provide open access to the national grid. Research limitations/implications – With the exception of T&T, Caribbean nations are heavily dependent on oil and gas imports to meet their primary energy requirements. The investigation conducted has limited documentation on cases of a similar nature within the region. The outcome of the steps identified above are based on conjecture using information gained from international situations. Practical implications – The study helps clarify the crucial role of T&T's government in the successful development of the RE industry. Resources and earnings should be used to develop T&T's infant RE industry and hence reduce the carbon footprint of the nation. Originality/value – Past attempts by the government to promote RE an energy efficiency in T&T have been passive and prevaricated. In addition to outlining the existing fiscal initiatives available to the population, this paper provides short-, medium- and long-term recommendations for the sustainability of RE in T&T. While subsidy reform, among others, poses a challenge it is nonetheless imperative if T&T is to move forward. With the abundance of solar, wind and waste-to-energy resources there is great potential for a successful RE industry in T&T. More than just policy will be required to drive change; greater commitment by the government to ensure the sustainability and economic viability of T&T while also attempting to alter the mindset of the citizenry to act as effective stewards of the island's resources for the well-being of future generations.