Puerto Rico has an opportunity to pursue transformational structural reform through a “green-growth” plan, which would create a sustainable independent economy, versus recreating the dependent relationship that prevailed through Section 936, said a trio of economists from the Political Economy Research Institute at the University of Massachusetts Amherst.
Under “Austerity vs. Green Growth for Puerto Rico” plan proposed by Amanda Page-Hoongrajok, Shouvik Chakraborty and Robert Pollin, Puerto Rico would the possibility of establishing a viable domestic energy infrastructure that could significantly slash the price of electricity and free the island from spending between 4 percent and 6 percent of its GDP every year on imported petroleum and natural gas.
“The investments in energy efficiency, renewable energy, and climate adaptation/resilience will produce a large-scale expansion in job opportunities, with new job creation growing per year from about 25,000 to as high as 80,000 as investment projects continue between 2020 and 2050 and as imported energy purchases steadily decline,” the report states.
Building a domestic clean energy infrastructure would also create widespread opportunities for new business ventures, including small-scale community-owned and cooperative enterprises.
“By committing itself to embracing the global climate stabilization project through steadily driving down CO2 emissions to zero as of 2050, Puerto Rico will also enhance its reputation as a desirable tourist destination,” the economists concluded.
Still, this green-growth project cannot launch successfully under anything close to the austerity conditions now prevailing on the island, they stated.
“The devastation due to [last year’s] hurricanes makes matters significantly worse. Puerto Rico’s creditors simply have to accept the fact that major debt write-downs are necessary,” the economists warned.
The scholars stated that Puerto Rico has two options to pull out from its current economic depression — either “accept deepening economic and social decline within a framework of inadequate investment to rescue the island from the hurricane devastation and the proposed ongoing austerity policies,” or “begin building a viable independent economy within the framework of green growth.”
In their analysis, the economists took into consideration the government’s Fiscal Plan and structural reform program, which they said could be integrated into their proposed green-growth framework.
“Transforming the island’s energy infrastructure is clearly the single most important priority,” the economists said in the report. “But the transportation system can also be overhauled within the green-growth project through expanding public transit and subsidizing the local market for high-efficiency private vehicles, including hybrids and electric cars.”
“Waste management can be utilized for generating clean sources of bioenergy. Incorporating small-scale hydro power projects into the island’s water management system can produce cheap electricity. Climate adaptation and resilience measures can also be incorporated into all of these targeted investment areas,” the economists noted.
The proposed green-growth program could also “significantly reduce Puerto Rico’s vulnerability to severe hurricanes such as Irma and María.”