The FINANCIAL -- “The Government should start moving the educational system forward. They should balance what the country can absorb in terms of investments, cost of investment and taxation necessary to pay for those investments,” John Hofmeister, former president of Shell Oil, business and civil society leader in the U.S. Energy Sector, told The FINANCIAL in an exclusive interview. Mr. Hofmeister came to Georgia to discuss the importance of clean energy with government leaders and NGO members.
Mr. Hofmeister founded and heads the NGO Citizens for Affordable Energy, which promotes sound U.S. energy security and sustainability solutions. Mr. Hofmeister draws on his 35 years of business experience as a member of corporate and public sector energy advisory boards in the U.S., including the United States Energy Security Council. Currently, Mr. Hofmeister is a Distinguished Sustainability Scholar at the Global Institute for Sustainability at Arizona State University, where he teaches energy strategy and policy development.
“We already met The Deputy Minister of Justice, Deputy Minister of Energy, Minister of Energy, Minister of Economy and Sustainable Development, Minister of Defence, Minister of Environment and Natural Resources Protection, also Non-Governmental Organizations’ members.
The main purpose of our meeting was to describe the role that Arizona State University would like to take in facilitating a dialogue with the Georgian Government, business leaders, NGO leaders, USAID and the U.S. Embassy.
Our aim is to create outcomes that achieve sustainable development for the economy, energy system, infrastructure, human resource and social development.
We are trying to understand the past and the present so we are still at an investigatory stage. We are still learning and we don’t pretend to know the answers in Georgia. But rather we need to build credibility so as to bring the knowledge and intellectual capacity of Arizona University.
Q. What do the leaders of your country do to protect nature?
A. The U.S. has around 40 years of history in addressing the future of energy both combining environmental protections to try to make sure that the land, the water and the air in the U.S. is being remediated from past abuse, but also trying to protect from future abuse. Business needs to be able to grow, building new plants and new products, and the most important word is combination - where people can work in harmony, to respect the regulations, to protect the environment while still building the economic base of the country to provide jobs. In addition the education of the public about the need of economic growth and need of environmental protection is very important. People can balance the risks associated and it’s a very key thing to balance the risks.
Q. Who will pay in the end for this clean energy?
A. In the end the consumer pays. The only way the consumer can afford energy in a developing market place is if they have good jobs. So you can’t develop an energy system that has to be purchased and paid for with huge capital investment, if the consumers of the country are not employed and are not paid well enough to both afford what they need in their life, and still buy electricity. The Government must not put too much debt on the taxpayers and consumers.
The only way a consumer can afford energy in a developing market place is if they have good jobs.
Q. How should citizens be involved in transforming dirty forms of energy into clean ones?
A. This is the hardest thing to do in involving citizens. But if the Government won’t involve citizens it would be a great problem for the future. Citizen engagement requires two things.
One, they should be informed; there should be discussion, debate then a decision. There shouldn’t be a decision taken before discussion. Involving citizenry is a critical success factor in any democracy. If some parts of society do not want any more debts, do they also want low growth? Do they want the economy to grow?
The Government should have an answer to these questions. Do people want to pay higher rates for solar energy? Arizona State University will be helpful to demonstrate how dialogue can be robust, peaceful and serious, but outcome decisions can be made by the government. So they must be sure that the public is willing for such changes.
The second thing that citizens must do is be active in both expressing their views and voting. It’s critical for democracy to express your point of view and to vote. The ultimate power in a democracy is the vote. If a government only makes decisions in their office and doesn’t involve the public, then if the people don’t like the government they vote them out and vote for another government and it’s critical for people and government to reach consensus. To stay in power a government needs to support people but all the people need is to be willing to vote on what they believe is the right thing for democracy to work. My great fear is that people don’t vote maybe because they don’t know but we are all capable of knowing and we are all entitled to vote in a democracy.
Involving citizenry is a critical success factor in any democracy.
Q. What should the Government do with high costs associated with solar or wind energy and low salaries?
A. What the Government has to realize is to make time the friend of the country. Time is the friend the Government has - you can go fast, you can go slowly. The Government has to decide what the right speed is. The Government should balance what the country can absorb in terms of investments, cost of investment, taxation necessary to pay for those investments. The country doesn’t have the capacity to do all that now so they must choose what must go first.
The EU has made some investments in Georgia. The USA has made some investments in Georgia which is all to the good. But still the Government has to decide what the right balance is. Because the country is growing you need jobs, well-paid jobs.
The US has benefited from investments in educations. It has led to the creation of new and different products which have created the value that people want to buy. Its combination of good government, human capability and private sector investment benefits the country as a whole.
Q. How should it be decided which sector is a priority?
A. The Government should find a balance between the resources of the country and the needs of the country. You might want to do everything at the same time: infrastructure, education, social welfare. But you just don’t have enough money so you have to decide what comes first. Infrastructure spending as a stimulus for larger economy creates economic values to create more jobs. Now you must start an educational system to move forward. Growing the economy is the first priority and the more efficient way to grow economy is through infrastructure, then comes education.
You have got to educate the public. You shouldn’t start a project that you can’t finish. So my advice is that the Government should take small steps, not big steps. And Georgia is coming from a painful history of the Soviet era, and so taking very large steps too soon can build expectations that can’t be met. And therefore incremental steps should be taken over time.