Turks and Caicos Islands

5.2. Energy Supply and Distribution
5.2.1. Policy
As evident from current energy documents in many countries both in the Caribbean and outside, tourism is
not central in the consideration of wider strategies to reduce energy use (Brewster, 2005; Haraksingh,
2001). Yet, as this document has shown for Turks and Caicos, its share in energy use and emissions is
considerable, and likely to grow in the future, leading to growing vulnerabilities in a business-as-usual
scenario. At the same time, the sector holds great potential for energy reductions and should thus be one
of the focus points of policy considerations to de-carbonize island economies. It is vital for governments to
engage in tourism climate policy, because tourism is largely a private sector activity with close relationships
with the public sector at supranational, national, regional and local government levels, and through politics,
there is thus an outreach to all tourism actors. Furthermore, governments are involved in creating
infrastructure such as airports, roads or railways, and they also stimulate tourism development, as
exemplified by marketing campaigns. The choices and preferences of governments thus create the
preconditions for tourism development and low-carbon economies. Finally, there is growing consensus that
climate policy has a key role to play in the transformation of tourism towards sustainability, not least
because technological innovation and behavioural change will demand strong regulatory environments.
The Climate Change Green Paper identifies a number of actions related to energy use in the tourism sector
in the short, medium and long term. In the short term it recommends that the tourism industry is
encouraged to reduce energy use and build eco-friendly designs. In the medium term it calls for the
adoption of greener technologies at tourism facilities and in the long term for attaining Green Globe, Green
Key and Green Hotel certifications (Climate Change Committee, 2011b).
As described earlier and pointed out by OECD (2010), emissions of greenhouse gases essentially represent a
market failure where there is little incentive to innovate. It has been shown that the fairest and most
efficient way of reducing emissions is to consider increased fuel prices, i.e. to introduce a tax on fuel or
emissions. Carbon taxes may be feasible for accommodation, car transport and other situations where
tourism activities cause environmental problems. Taxation is generally more acceptable if taxes are
earmarked for a specific use, which in this case could for instance include incentives for the greening of
tourism businesses. Tax burdens would then be cost-neutral for tourism, but help to speed up the greening
of the sector. If communicated properly, businesses as well as tourists will accept such instruments, and the
economic effect can be considerable. The Maldives charge, for instance, US $10 per bed night spent in
hotels, resorts, guesthouses and yachts, which accounts for 60% of government revenue (McAller et al.,
2005).
Only limited legislation appears to have been passed in Turks and Caicos, including an additional fuel tax of
50 cents per imperial gallon of fuel, half of which (25 cents) was implemented up to April 2011 (FP Turks
and Caicos, 2011b). According to Castalia (2011) the Turks and Caicos Islands’ legal and regulatory
framework does not provide adequate rules and incentives for more sustainable production and
consumption of electricity. For example, there is no obligation for utilities to purchase renewable energy
from third parties when it costs less, no metering or tariff arrangements to integrate such providers and the
Building Code and Development Manual do not address energy efficiency. The report also highlights that
the existing tariff structures do not encourage efficient use of energy, which is interesting, since the
proposed Energy Conservation Policy put forward aims to introduce new technology in order to lower
electricity costs. As reported in Section 4.2.1, this is not in line with suggestions by supranational
organizations to increase the cost of energy in order to reduce consumption (OECD & UNEP, 2011). PPC has
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