In general, the proposed Climate Change Trust Fund Act is in keeping with sound environmental policy, but the draft law should be carefully revised with an eye toward lightening the outsized burden that it places on the tourism industry.
Moreover, the act will be effective only if it is accompanied by comprehensive reform designed to build a greener territory.
Under the proposed legislation, an independent trust would administer a sizeable fund earmarked to help the territory weather the effects of climate change.
Because those effects are potentially disastrous for the Virgin Islands, this forward-thinking step is needed.
Though research varies widely, many scientists predict that the sea level will rise by two feet or more in the next century. Related threats to the VI are various: shrinking beaches, flooding, destruction of coral reefs, and damage to the fishing and farming sectors, among others.
To mitigate such pressures, the draft act calls for the trust to raise $8-10 million per year through a variety of levies, the cleverest of which are designed to provide incentives for going green. A proposed carbon tax, for example, would exempt hotels and yachts that use alternative energy to reduce their carbon footprint.
But other suggested taxes seem less carefully conceived. A proposed $20-per-visit levy on diving, for example, is likely to increase the cost of that sport disproportionately.
Moving forward, it will be extremely important to set up a revenue regime that is practical, fair and easily administered.
To our thinking, this means taking some of the pressure off of tourists, who would foot the vast majority of the cost under the draft law. Instead, we would like to see a more balanced approach that is shared by tourists and residents alike.
Additionally, at a time when the tourism industry is struggling to recover from a worldwide recession, the government should consider a phased approach to the law.
Transparency will be crucial as well. The trust’s board, five of whose eight members will be from the private sector, will oversee a substantial amount of money, and the potential for conflict of interest is ripe.
Legislators, then, should ensure that transparency and good fiscal governance are watchwords in the final piece of legislation.
We are pleased that the Ministry of Natural Resources and Labour has been holding consultations with certain stakeholders. In the near future, the rest of the community should get a chance to weigh in at public meetings open to anyone who is interested.
Ultimately, though, the success of the proposed law will depend on the territory’s commitment to sound environmental policy across the board. The proposed carbon levy, for instance, would be illogical unless government updates existing regulations that prohibit most uses of alternative energy.
As they consider the new bill, then, leaders should commit to reforming related legislation that is outdated. They also should pass the comprehensive environmental management act that was recommended by the Law Reform Commission in 2008.
If the proposed Climate Change Trust Fund Act is carefully revised and implemented in conjunction with such large-scale reforms, the territory will be well on the way to preparing for the imminent threats associated with climate change.
Otherwise, tomorrow’s children could inherit environmental problems that may well be unmanageable.