Why sustainable development is so damn hard: Philippines edition

Subsidized power leads to energy waste 4

phillipp.jpgPhilippines president Gloria Macapagal-Arroyo spoke at the opening plenary of the Clinton Global Initiative. Unintentionally, her remarks illustrated the challenge of sustainable development.

First the good news -- green power:

We are endowed with geothermal power and it fits very well with our Green Philippines program. We want to use clean energy, we want to have energy independence, and geothermal power gives us clean energy and energy independence. Just before coming here yesterday, I was in an island in Santro Philippines, in a geothermal field. In fact the biggest wet field of geothermal power in the world. And what we did was we presided over yesterday a turnover of a build, operate, and transfer project from the private sector to the government sector. I had a similar turn over a few weeks ago, and the private sector has been able to get, the investors have been able to get their money back before they turn it over to the national government. So it's been a well paying proposition for them, too.

Now the bad news (which she thought was good news) -- subsidized power:

Yesterday, I also announced, for the second time, an initiative where we are encouraging economic zones to be set up around the geothermal sites, because not only can geothermal fields give us power, they also give us jobs because the local governments earn royalties from the geothermal power. And they, by law, they can only use most of it for electricity. So they subsidize the electric bills of the constituents. So now we are creating economic zones there, so that businesses, like electronics, for instance, power incentive electronics firms, will locate there. So aside from the subsidized power bills from the local governments, they will also have the usual investment incentives. So these areas, which are usually far from central Manila, will now have industries, as well as power.

Subsidized power means overused power means wasted power. No country, and certainly not the Philippines, has renewable power to waste -- especially not in the age of global warming. What an unfortunate law that forces local governments to waste energy.

This post was created for ClimateProgress.org, a project of the Center for American Progress Action Fund.

Joseph Romm is the editor of Climate Progress and a senior fellow at the Center for American Progress.

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  1. Jason D Scorse's avatar

    Jason D Scorse Posted 12:58 am
    04 Oct 2007

    Yes...subsidies=increased usewelcome to Econ 1- but seriously, this is why subsidies, even for good things, are problematic and not a first-best option.

    I teach environmental economics and blog at http://www.voicesofreason.info.
  2. Delay And Deny's avatar

    Delay And Deny Posted 1:35 am
    04 Oct 2007

    I wouldn't even have a Phillipines

    Under the Bailo Population Plan which calls for:
    One child per couple worldwide
    Population will be cut drastically.
    Places like The Philippines would be reverted back to natural habitats...there would be no need for tons of electricity.

    John Bailo


    Sutext:
  3. mihan's avatar

    mihan Posted 3:52 am
    04 Oct 2007

    wha?"places like The Philippines"? So, you're a racist, too? If anything, "places like the Philippines", (where plant and animal food sources and fresh water are abundant and there is no need to heat homes) should stay on the map and most of the US should revert back to natural habitat.
    Good god, I can't believe I fed it.
  4. Colin Wright Posted 4:37 am
    04 Oct 2007

    Why isn't the U.S. gov't doing this?It's hard for me to judge the merits of this example. But encouraging industrial growth around geothermal power plants seems to me like a good idea.
    Already, aluminum production is leaving places like the US and heading to hydro-rich areas like Siberia. But if we are going to need millions of wind turbines, it would be good to have aluminum smelters here. (We have plenty of geothermal resources in the West.)
    I don't know if the Phillipines has a supply of bauxite, but if they did they could vitually guarantee themselves supply of a very useful metal, and perhaps a light-industrial manufacturing base. This may not make sense with the current neoliberal, cheap-energy, outsourcing paradigm, but in does to those of us promoting a relocalization paradigm, particularly one that foresees a decent standard of living.

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