Full Title: Changing Energy Dynamics in the Western Hemisphere: Impacts on Central America and the Caribbean
Author(s): Harold Trinkunas
Publisher(s): Brookings Institution
Publication Date: 4/2014
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Central America and the Caribbean are potentially great beneficiaries of the energy revolution in the Americas and rapid progress in energy technology. Nevertheless, Central America and the Caribbean have the highest electricity costs within the Western Hemisphere along with the highest dependency on oil as an energy source. These are also the regions with the lowest average GDP per capita in the Americas.
Many countries in the region depend on subsidized financing from Venezuela to pay for oil products through the regional mechanism known as Petrocaribe. Continued Central American and Caribbean dependence on Petrocaribe is not beneficial in the long run as it creates disincentives for the adoption of new technologies and investment in new sources of energy. Additionally, it makes Central American and Caribbean states politically dependent on Venezuela for their energy security and therefore vulnerable to political pressure.