THE BLOG
03/31/2014 09:08 am ET | Updated May 31, 2014

Aruba: Building a Sustainable Resort Island

This past Friday, the Earth Institute was honored to host Aruba's Prime Minister Mike Eman, who inspired us with a talk entitled "Aruba's Vision for Creating Sustainable Prosperity." His vision includes transitioning to renewable energy, developing a sustainable economy and creating the conditions for stronger communities. Prime Minister Eman is working to move the government of Aruba completely off fossil fuels by 2020. With the establishment of a Renewable Energy Research and Education Institute, and partnership with the Carbon War Room, Aruba plans to reduce its dependence on fossil fuels and rely on alternative sources of energy, such as wind, solar and wave energy. His goal is to become the first fully sustainable island on earth.

In the past, whenever Aruba needed to address its pressing financial needs, the answer was to add more hotel rooms and bring in more tourists. Since the mid-1980s, Aruba's gross domestic product has increased from about $400 million to nearly $3 billion (not controlled for inflation). However, Prime Minister Eman believes that his small island of about 100,000 people may have reached a point where a different approach must be considered. His strategy includes improving education, enhancing community development, and reducing imports of fossil fuels while protecting the quality of the natural environment.

In my view, it is possible that by keeping the number of hotel rooms constant, the relative scarcity might increase the exclusivity of the resort and possibly increase wealth by increasing the price of hotel lodging. It is also likely that sustainable economic growth may require a more diverse economic base. It is never wise to rely on a single source of revenue to ensure economic well-being.

Three major renewable energy projects are already underway in Aruba. The first is a wind farm that now supplies 20 percent of the island's electricity. A second wind farm is now being planned that will increase renewables to 40 percent. A plan to cover the airport's parking lot with solar cells will provide shade for cars and also generate 5 percent of the island's electricity. In an island with no fossil fuels and no supply of freshwater, renewable energy is critical. Water is obtained by desalinating ocean water--an energy-intensive process. A waste-to-energy plant is planned that will provide a solution to the island's waste problem while also providing another source of renewable energy.

To encourage the development of renewable energy, Aruba has reduced the import duties on renewable energy equipment like windmills and solar cells, as well as on electric cars. The community development agenda is being promoted by a Disney-style "street car," to bring cruise ship tourists from the waterfront to the traditional downtown, and by an effort to beautify streetscapes with plantings, lighting and modern street furniture.

A challenge faced by this tiny island is that it may be difficult to obtain the capital required to invest in sustainable infrastructure. Traditional sources of finance, such as the International Monetary Fund, are more likely to provide loans if repayment is funded by revenues generated from additional resort construction and added numbers of tourists. Banks and traditional lenders like to bet on a proven track record of success, not on a new and innovative strategy. Yet it is clear that Prime Minister Eman is focused on improving the quality of life for the island's residents, and that an island only twenty miles long cannot add many more tourists without damaging the island's environmental quality and quality of life. By replacing expensive imported oil with lower priced renewable energy, the capital costs of the new infrastructure could be funded by the savings generated by lower energy prices. However, for that to happen someone, or some institution, must still demonstrate the courage and foresight to lend the capital required.

It is clear that the prime minister is hoping to achieve a new kind of progress that could well include economic growth, but that the goal is not economic growth for its own sake. In concluding his talk at Columbia, Eman quoted (from memory) the following lines from a speech given by Senator Robert F. Kennedy during his 1968 presidential campaign:

Yet the gross national product does not allow for the health of our children, the quality of their education, or the joy of their play. It does not include the beauty of our poetry or the strength of our marriages, the intelligence of our public debate or the integrity of our public officials. It measures neither our wit nor our courage, neither our wisdom nor our learning, neither our compassion nor our devotion to our country; it measures everything, in short, except that which makes life worthwhile. (Robert F. Kennedy Address, University of Kansas, Lawrence, Kansas, March 18, 1968)

Aruba's impressive and visionary leader is attempting to undertake a sustainable economic pivot. He is not rejecting economic growth, but is seeking a new form of increased production and consumption that does not mirror the development pattern of the past. Tourism will continue to dominate Aruba's economy, but other elements of the economy will need to be built to take advantage of the island's location, weather and other natural and human resources.

Since the start of the 21st century, Aruba's tourism industry has undergone significant growth:
  • Hotel rooms grew from 6,980 in 2000 to 8,000 in 2013.
  • Stay-over visitors grew from about 721,000 to 929,000.
  • Cruise ship passengers grew from about 289,000 to 689,000 passengers.

While I am certain that more resorts might be squeezed into this small place, perhaps an unspoken element of this "sustainability pivot" is the concern of local political leaders that continuing the strategy of the past could result in a degraded resort. The standard line of thinking is that economic development and economic growth is self-justifying and that unthinking growth is self-correcting. But it is not. Beaches and resorts valued for their beauty could be polluted and degraded by over-crowding and other forms of excess.

We know that changes in technology and in local social, cultural and political conditions can transform a local economy. We saw that here in New York City. During the last quarter of the 20th century, New York City was transformed from a manufacturing, shipping and commercial city, to the post-industrial global capital it is today. Technologies such as containerized shipping made the city's west side docks obsolete. The concentration of education, communications, technology, health care and finance drove lesser value-added businesses to less expensive locations. Many small manufacturers could no longer survive. Unlike the political leadership in Aruba, New York City's political leaders had no idea what was going on, and as a result, New York nearly went broke in the mid-1970s.

Prime Minister Eman and his colleagues have taken a look around and realize that an exclusive reliance on tourism and fossil fuels is short-sighted. Rather than replicating the successes of the past, they are searching for a different path to succeed in the future. They recognize the importance of a strong economy, but like Bobby Kennedy in 1968, they are looking for a broader and more inclusive definition of success. It is inspiring to see this ambitious agenda emerge. In some ways we might view this as a sustainability pilot project. We should watch closely to learn from Aruba's experience, wish them well, and offer whatever assistance we can as they work to reduce their dependence on fossil fuels.