Renewable Energy Development in Small Island Developing States of the Pacific

Abstract

Small Island Developing States (SIDS) of the Pacific over the last decade have established some of the most ambitious renewable energy targets in the world. The promotion of renewable energy has been motivated by a desire to lessen dependence on fossil fuels, given the adverse economic impacts of high oil prices on these countries. Efforts to attract development assistance and to strengthen the position of Pacific SIDS in climate change negotiations have likely also played a role. This paper explores the development of renewable energy resources in the Pacific through a public policy lens. The ambitious renewable energy targets established by Pacific SIDS are argued to be appropriate in some cases, but in other cases are criticised on economic grounds. A potential trade-off is identified between the risk mitigation benefits and poverty alleviation benefits of different renewable technology investments, with questions raised about whether support for the former rather than the latter by development partners is appropriate. A number of institutional and financial challenges to the development of renewable energy resources in Pacific SIDS are also discussed.