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PARIS, France, July 12, 2006 (Refocus Weekly)
There is considerable interest in the potential
for biodiesel, solar thermal and geothermal systems, and eliminating
tariffs would reduce a burden for rural residents of developing
countries.
Tariffs on renewable energy systems are 15% or higher on an ad
valorem basis in many developing countries, says the Organisation
for Economic Co-operation & Development in ‘Liberalisation of Trade
in Renewable Energy & Associated Technologies: Biodiesel, Solar
Thermal and Geothermal Energy.’ The paper examines the implications
of liberalizing trade in the three technologies on consumers in
developing countries, which is where “many renewable fuels and
renewable energy technologies are making, and are likely to make,
their greatest contribution.”
The resources for biodiesel, solar thermal and geothermal are widely
distributed around the world, and the technologies are “in many
cases, less sophisticated than other renewable energy technologies,”
and the report examines remaining barriers and how the benefits of
reducing those barriers would be distributed.
Production of biodiesel has been increasing rapidly in recent years,
and will continue to expand at a rapid rate this decade as planned
capacity comes on stream, with much of the new capacity being built
in OECD countries but with several developing countries (Brazil,
China, India and Malaysia) “poised to join the ranks of major
producers.” Liberalizing tariffs on biodiesel would lower prices and
encourage a faster rate of substitution of this relatively
clean-burning fuel for petroleum but, “for trade in biodiesel to
reach its full potential, complementary changes in domestic policies
will also need to be put in place to safeguard the environment.”
Solar thermal water heaters have been sold for decades, and there
are hundreds of manufacturers, including some in developing
countries. Water heating is the first or second residential
application in most countries, and “any change in policy that
reduces costs of these devices will benefit the environment by
substituting clean energy derived from the sun for other, less
benign energy sources.”
“Barriers to trade in solar thermal water heaters are highest among
developing countries, including those with the climate conditions
most favouring their use,” it adds. The potential for geothermal is
substantial, although limited to specific regions, and lowering
tariffs “would help a number of other countries similarly reach
their full potential and thereby reduce dependence on more-polluting
fossil fuels.”
“Manufacturers located in OECD countries would benefit from
increased trade in equipment, but so would a growing number of
companies based in developing countries,” it states. “For the
maximum benefits of trade liberalization in biodiesel, and solar
thermal and geothermal technologies, to be realized, however,
additional reforms may be required in importing countries’ domestic
policies, especially those affecting the pricing of liquid fuels,
competition in the electricity sector, and protection of the
environment.”
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