COP 17 – The case of South Africa


Good evening Mr. President, would you like to address climate change, or maintain current economic growth? I’m afraid, Sir, it’s one or the other.

It is often believed that governments, particularly those in developing countries, must choose one at the cost of the other. Historically, this is true, as past industrialisation curves have shown an intrinsic positive correlation with greenhouse gas  (GHG)  emissions, perhaps most  easily observable by the increase in carbon emissions associated with increased energy use in industrial, residential/commercial  and transportations sectors which, in turn, tend to increase with income, all things being equal. In fact, the International Energy Agency uses economic growth as a key exogenous assumption when estimating their authoritative energy demand projections.

 

This blog suggests that the relationship is far more complex, and that there exists a path of modern, sustainable development, which allows for the avoidance of traditional fossil-fuel growth. Technology transfer and careful economic restructuring can allow developing nations to transition directly into low-carbon economies. This potential for sustainable growth demonstrates that climate change mitigation and economic growth are not mutually exclusive, a principle behind which the International Green AwardsTM firmly places its support.

 

South Africa, soon to play host to the 17th Conference of the Parties (COP 17), is an example of a country yearning for rapid socioeconomic development, yet fully cognisant of the role it needs to play as one of the BRICS nation in reducing it GHG emissions. The complexity of the problem is compounded by the potentially devastating impacts the country may feel as a result of climate change, becoming drier in the west and wetter in the east, with increasing frequency in severe weather events, such as drought, tornadoes, floods and other natural disasters. Hence, many argue that the upcoming conference is somewhat of a watershed moment in international climate policy, where quasi-developed countries, like South Africa, need to show renewed commitment to low-carbon growth.

 

Experts need to elucidate promising policy approaches that capitalise on the natural synergies between climate protection and developmental priorities. In fact, South Africa is presented with an unprecedented opportunity to attract international investor’s attention, and show how, in the words of the G8, “mitigation and adaptation strategies can be pursued as part of development and poverty alleviation efforts”.  By aggressively pursuing the transition to a low-carbon economy, South Africa could meet its targets ahead of other developing nations, and redefine its competitive advantage as a country rich in renewable energy technologies, low carbon resources, and energy-aware citizens.

 

It is clear that the overwhelming majority of South Africa’s GHG emissions are a result of sectoral energy use (non-CO2 GHGs are far less significant). As a result, the country’s national GHG emissions mitigation strategy could be distilled into two key areas of focus; namely, renewable energy and energy efficiency. This section discusses possible government actions that could yield considerable GHG mitigation in these areas without compromising economic growth.

 

There is no doubt that government intervention is a requirement to reducing the country’s GHG emissions, where the highest possible political support must be established. In particular, clarification of the lines of responsibility and reporting within the energy sector, especially the roles of the Departments of Public Enterprises, Energy, and Science and Technology are a crucial prerequisite. An overarching policy institution is needed, with the authority to influence the vested interests who are opposed to GHG mitigation, either through market-based instruments (e.g. taxation and subsidies) or command-and-control (e.g. legislation).

 

Current systems are clearly orientated towards coal-based energy supply, and it is crucial that this embedded system is restructured.  The dominance of the energy supply communities in policy-making would have to be dismantled, together with the long-standing cultures of secrecy and non-transparency within these institutions.

 

In truth, South Africa’s record of transparency and service delivery, the urgency of the emissions mitigation required, and the challenge of confronting the existing order of decades-old vested interests, indicate that the above structural overhaul is an unlikely prospect. Instead, it may be more practical to accept the entrenched nature of the current energy policy paradigm and institutions, and to seek climate mitigation alignment within these constraints in the short- to medium-term. Hence, for example, in the renewables area, Eskom would be mandated to achieve the 15% target itself. For industrial energy efficiency, ways would have to found of combining the institutional weight of existing parties such as Eskom, SANEDI, NERSA, the EIUG, industry and the Department of Energy, with a high level of co-ordination and policy direction from the overarching policy institution.

Understandably, as a developing country, most energy policies in South Africa are primarily geared towards broader electrification and improving the quality of life. However, instead of attempting to connect outlying rural areas to the grid, an alternative may be to establish small renewable energy plants nearer the demand. By combining solar photovoltaic cells, electricity generated from biomass, and small hydro schemes, local cooperatives could work together to generate and distribute electricity to these isolated rural areas, mitigating costs and GHG emissions.

 

From a macroeconomic perspective, the removal of subsidies for emissions-intensive synthetic fuels production is an urgent step in stimulating renewable energy development across the national grid. The government has already established the South African Renewables Initiative (SARi), which will focus on the financing arrangements for renewables, through a combination of international loans and grants, as well as domestic funding. Although, financing is unlikely to be a concern, with African renewable energy investment set to grow from a total of US$3.6-billion in 2010 to US$57-billion by 2020, accompanied by huge foreign direct investment in energy infrastructure. The potential return-on-investment is evident where, according to an EREC/Greenpeace report, an aggressive renewable energy policy, shifting 80 percent of investments to renewables, would require South Africa to spend an additional US$5.2 billion each year; but the projected savings would amount to US$6.6 billion.

 

Renewable energy feed-in-tariffs (REFITs) are already generating significant investor attention in South Africa, indicating that such renewable energy-friendly policies should be continually implemented. For example, the country already plans to build a 5000MW solar park facility in the Northern Cape, and by enhancing economic incentives, such a project could become common place. Of course, the economic benefit is considerable, where the park is projected to generate approximately 12,300 average annual direct construction jobs. Furthermore, it could present the country with a unique opportunity to become a manufacturing and technology hub for the global solar industry.

 

Demand-side energy management is crucial to effective emissions mitigation in South Africa, where improving energy efficiency is perhaps the most overlooked strategy in addressing climate change. However, South Africa already has several programmes addressing energy efficiency in energy production and the main energy-consuming sectors. It even has plans to establish energy efficiency norms and standards for commercial buildings, where current guidelines in place for energy efficiency in commercial buildings will, after a five-year trial period, become mandatory.

 

It is crucial that energy efficiency standards for buildings, appliances, power plants and vehicles are continuously incorporated into legislation, as this is a perfect example of a synergy between economic growth and emission mitigation. For example, energy efficiency has become one of Germany’s primary mitigation tools, where it simultaneously created 140,000 jobs through its building retrofit programme.

 

Changing behavior with regard to energy use is also important; however, campaigns alone have been shown to have little effect. The key lies in making visible what is currently invisible, so in addition to manufacturing and building standards, smart electricity meters (designed to assist users in reducing their energy use) should be considered in the long-term.

 

South Africa’s low education levels and general lack of awareness regarding climate change mitigation policies is one of the key reasons for the public’s hitherto inadequate support. It is crucial that communication campaigns are carefully designed and deployed to improve public understanding of climate change; otherwise the relevant plans may go unimplemented or be pushed aside by more “pressing” policies that promote immediate economic benefits.

 

South Africa’s national climate agenda is developed through the National Climate Change Committee (NCCC). The NCCC is supposed to share climate information amongst government and non-governmental actors. In practice, however, little effort is put into information sharing with the broader society as a whole. This is an issue that needs to be urgently addressed in order to garner public support.

 

By increasing the proportion of renewable energy generation, thereby reducing South Africa’s present reliance on coal and oil, while also focusing on energy efficiency, the country could be using less energy in 2050 than it does now, even as population and the economy grow. This is according to a report entitled “The Advanced Energy [R]evolution: a Sustainable Energy Outlook for South Africa”, by the European Renewable Energy Council (EREC) and Greenpeace. Furthermore, the report concludes that through the restructuring of its energy policy, South Africa can cut GHG emissions by 80 percent, and reduce the amount its citizens pay for electricity by US$23 billion per year, compared to business-as-usual, by 2050.

 

This blog has outlined certain policy actions that allow South Africa continued, if not greater, economic growth, while concurrently addressing climate change in terms of both emissions mitigation, and adaptation.  The suggestions made above can enable long-term economic growth built around low-carbon technologies, and clean energy generation, while also helping vulnerable communities prepare for and respond to the impacts of climate change.

 

 

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KPMG. 2011. “South Africa’s Carbon Chasm”. Carbon Disclosure Project

 

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