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the infrastructure to use natural gas, renewables, and energy efficient technology. This should in- clude incentives for existing power producers and consumers to participate in and support the transi- tion to a new energy matrix. In an era when many overseas development as- sistance programs are under pressure, most of the new energy infrastructure will have to be built by the private sector or by governments supported by lending from multilateral development banks. To achieve economies of scale, a long-term plan should lead states in Central America and the Caribbean to develop more compatible regulatory structures and investment frameworks. This would encourage the private sector, both within each state and abroad, to assume the costs (and profits) of implementing an alternative energy matrix. It will also require gov- ernments to invest in building up regulatory and oversight capacity so that one private monopoly is not simply replaced with another, but rather with a new competitive energy infrastructure. Given the extended timeframe required to build a new energy matrix, the possibility of an integrat- ed approach may prove beyond the reach of the present Central American and Caribbean gov- ernments, even with the international encourage- ment they have already received. However, there are still opportunities for individual governments and enterprises to invest in new energy sources such as natural gas-fired plants, geothermal, solar, and wind. Particularly in Central America, where SIEPAC makes it possible to sell electricity to con- sumers in neighboring states, countries with good business investment climates or support from mul- tilateral institutions might simply forge ahead and make cheaper energy available to their own con- sumers and others in the region. This would create a competitive dynamic where consumers in other countries put pressure on their own governments to make cheaper energy accessible, overcoming the resistance of entrenched business elites. The result might not benefit from the same level of econo- mies of scale as would be available through greater regional integration, but such actions would still benefit consumers, begin to break the region’s de- pendence on oil imports, and reduce their vulner- ability to external financial and political pressure. Changing EnErgy DynamiCs in thE WEstErn hEmisphErE Latin amEriCa initiativE, ForEign poLiCy at Brookings 5PDF Image | ElectraTherm Enters Canada’s Natural Gas Compression Market
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