One of the adages that we have all grown up with is “start wrong, end wrong”. It is as true for a building as it is with life and certainly with the development of public policies. It is obvious to most of us that if the foundation of a structure is not sound the building itself will be structurally unsound and, over time, become dangerous to those that live or work in it. This will either cause the building to be condemned and demolished or may result in a catastrophic collapse resulting in loss of life and human suffering.
There are many external factors that may impact upon a poorly designed or constructed building. Right away our minds leap to the more obvious ones such as hurricanes or earthquakes but there are many other factors such as slow erosion of subsoil or unforeseen adjacent construction that causes a disequilibrium and ultimately failure in the supporting structure.
In recent years there have been some dramatic examples of buildings collapsing because they started wrong. Public policies are no different but not as obvious. When they collapse there is no dramatic crashing of masonry and steel and no cloud of dust with ambulance sirens wailing in the distance. Instead there is a drain on the public purse and a decline in our quality of life. All too often we start wrong to achieve what is seen as a laudable objective and this is where expediency and mendicancy plays an insidious role.
We have a problem, a solution is offered with funding and strings attached, we need the foreign exchange inflow that would arise from the external funding and we swallow the bait. The hook is set and then comes the ongoing cost of maintaining the project and there is no certainty that we have solved the initial problem.
That scenario is played out over and over again and one old example that comes to mind is the solar powered air conditioning system installed many years ago at the Ministry of Agriculture. Today it is the taxpayer funded installation of solar electrical generating systems.
Our problem is the escalating cost of energy and the outflow of foreign exchange to meet the cost of generating that energy. The foreign exchange component is a combination of the capital cost of the generating and distribution equipment and the oil that is presently imported as fuel for conversion into electrical energy or to be used in the combustion engines of cars, trucks, busses, farm equipment and fishing boats. Global oil production has a finite lifetime and has become increasingly expensive to recover from deep wells and depleted reservoirs. It is also subject to geopolitical price shocks. Solar energy on the other hand is free. But there comes the rub. How do we leap from an increasingly scarce resource and escalating prices to free energy?
If government has to subsidize the installation of solar generating systems it must be evident that the economics of transitioning from oil based generation to solar generation does not look appealing to the market place. The idea seems good but the technology has not yet been developed to create the efficiencies that would make economic sense. There still is no free lunch.
In steps the external funding agency that would provide soft loans or grants or any combination thereof. It would be an immediate infusion of foreign exchange. This then becomes the driver of a policy decision that would put the factories to work in China, the U.S., or Europe by providing a market for solar panels, inverters and batteries at our expense while transferring the burden of future investment in the generation of energy to the businesses and householders of Barbados. A short term gain in foreign exchange is soon replaced by a long term hard currency drain as the capital cost of energy generation escalates and becomes increasingly fragmented, difficult to manage and unreliable.
In addition to this, the electric company will still be required to have the installed capacity to provide electric power to meet the demands of the island thus the national capital cost of generating electricity will be increased as more and more redundant systems are installed.
A switch from Oil to natural gas seems to be the better solution in the near to medium term.
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