Sociologist from Malta

Friday, January 21, 2011

The cost of fuelling expectations

Michael Briguglio

The Times, Friday 21 January 2011

How realistic, sustainable and just are the policies of the three political parties on the increases in energy prices?

Let’s start off with Labour. I believe it is fuelling unrealistic expectations with regard to prices of utilities and gas. In an age of transnational politics in a global economy, I simply cannot understand why Joseph Muscat keeps persisting in his silence on the global recession and the global increase in energy prices.

Austerity measures are taking place in every corner of the world irrespective of the ideologies of governing parties in specific nation states. A friend of mine who believed such measures do not take place in Left governments must be shocked when reading about austerity measures in Bolivia, Cuba and Cyprus, to name three. Social democratic governments – the same political family as Labour – are doing the same; Spain and Greece immediately come to mind. And, of course, the same can be said of centre-right governments and other coalitions as is the case with Italy, Britain and Ireland.

The facts are simple; no national borders can stop economic and ecological realities related to scarce resources such as oil and gas. Given that the global demand for such resources is rising faster than their availability, it is more than obvious their price will increase. Besides, given that such energy – especially oil – causes a lot of CO2 emissions and pollution, an added cost is incurred on society in relation to adaptation to climate change, health costs and so forth.

And no nation state can simply act as though it has unlimited budgets. If Labour prefers thinking otherwise, so be it. But I would expect much better from a party that is presenting itself as the government-in-waiting.

What about the Nationalist government? It can absolve itself from the global increases in the price of energy. On the other hand, however, it is clear that sustainability – whether related to economic, environmental or social factors – is not a priority for the government.

Were this the case, more public funds would have been invested in alternative energy. It is true that, after many years of passivity, the Nationalist government introduced some reforms such as grants for the purchase of solar water heaters and photovoltaic panels, together with the introduction of the feed-in-tariff. But, surely, it is clear these policies are not a priority for the government, especially since the grants are very restrictive and limited.

Given that Malta has ample solar and wind resources, one would expect government invests massively in such energy, for example by ensuring thousands of solar water heaters are installed on rooftops. One would also expect clear policies ensuring people who live in apartments can have access to such energy. Thousands of people who live in apartments are denied access to the roof (save for a conventional water tank) in view of Malta’s penthouse policy.

Increased investment in clean energy is not only beneficial to the environment but is also beneficial to the economy and to society. Green jobs will be generated and less money will be spent on imported energy.

The Nationalist government has also shied away from introducing simple and workable fiscal incentives for businesses that make use of sustainable energy and/or generate green jobs.

State authorities do not help much in the shift towards a sustainable Malta. The Malta Environment and Planning Authority, for instance, could have imposed tough conditions on energy-thirsty projects such as Mater Dei Hospital, Smart City, MIDI and Fort Cambridge, for example by obliging them to use their rooftops for solar energy. This would have eased pressure on Malta’s demand for oil, which is what feeds the ever-expanding Delimara power station.

Enemalta, on the other hand, is an incredibly unaccountable monopoly and nobody seems to know how much we are paying for its inefficiencies. Unfortunately, the regulatory authorities – which are supposed to act as independent regulators – do not help much. More often than not they are headed by appointees whose first loyalty is towards ministers rather than consumers.

On Xarabank last Friday, Prime Minister Lawrence Gonzi said, through the Malta Council for Economic and Social Development, the government is evaluating whether some form of mechanism can be introduced to make up for increased hardships.

In this regard, as a Green party, Alternattiva Demokratika augurs any form of compensation should not reward wasteful practices. Taxpayers should not pay for capricious consumption of dirty energy, particularly when its price keeps increasing and when this keeps adding more pollution.

We suggest a realistic assessment of the cost of living adjustment is carried out in order that the yearly compensation truly reflects the rise in inflation. Hence, an updated methodology should replace the current one on which COLA is based.

AD also reiterates that Malta needs an increase in the minimum wage.
It is true this can add costs to employers but this can also help bring about more productivity and, above all, put more money in the pockets of low-income earners who are truly hardly hit by the global recession.

Even though the days of utopia are long gone in an age of uncertainty, risk and anxiety, this does not mean we should remain idle in the irreversible context of escalating costs of dirty energy. Rather than fuelling unrealistic expectations and giving handouts, which will only suffice till the next energy hike, it would be better to equip consumers with real choices in an energy market and with realistic compensation for cost of living increases. In such a scenario, we Greens believe the government should ensure regulators are really autonomous and that sustainable energy is prioritised over the rest.

The author is chairman of Alternattiva Demokratika – the Green party.

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