The Shell Energy Dialogues is a series of global debates aimed at providing policy options on critical energy issues. The most recent took place in Durban. Those who took part were Tasneem Essop from the WWF SA, Steve Thorne from SouthSouthNorth Africa, Thembani Bukula from the National Energy Regulator of South Africa and Glendyr Nel, an environmental lawyer from Cullinan & Associates. It was hosted by TV presenter Lerato Mbele.
This is an edited transcript.
LM: Good evening and the warmest welcome to the Shell Energy Dialogues. We are coming to you from I think the most interesting and auspicious of venues in the entire series, the uShaka Marine World in Durban, South Africa. Now you know climate change has become a very fashionable issue and perusing the green agenda has become a fashionable cause. Many people use terminology such as global warming and speak about the need to reduce greenhouse gases. In normal parlance this sounds very abstract but when you are dealing with the situation in Africa, climate change is a very real issue. Increasingly weather conditions have become erratic on the continent, rivers are filling up and the climate seems to be getting drier. Experts say that Africa of all the continents is the most susceptible, the most vulnerable and the most affected by climate change.
The challenge now is for us to raise awareness about what it is and how dire the situation is. The case for South Africa seems to be even more urgent. Not only is this the largest economy in sub-Saharan Africa, it’s also the economy that is seen to be driving the broad agenda for industrial growth in the region. Ninety percent of our energy comes from coal-based energy, so the climate change agenda becomes very challenging for South Africa and the region because it means dismantling the inherent infrastructure of a coal-based electricity supply. We are joined by an auspicious team of experts here to discuss whether or not South Africa’s climate change targets and pursuit of renewable energies are overly ambitious or whether or not they are feasible.
Tasneem, let’s start with you. South Africa has set itself a target of reducing its carbon footprint by about 34% within the next decade. Is that feasible?
TE: I think that it’s important to understand that these are not targets that one would expect from developed countries in terms of the international treaty, the Kyoto Protocol. In fact South Africa’s commitment is voluntary and was made in Copenhagen. But it is also a conditional commitment, and that is really important to understand. It is conditional on two things. One, that an agreement is reached, a multilateral agreement under the United Nations, on climate change, and [that we get] the kind of support from developed countries that will allow us to reach those very ambitious targets. My own opinion — I believe it’s feasible, I believe its doable, I think it’s going to be extremely challenging to meet those targets by 2020 and 2025. But it has been based on work done by the government — the long-term mitigation scenarios.
ST: I think these targets can be achieved. Well, targets, they are not really targets — i”s a voluntary commitment, as Tasneem said. You just have to unpack it — it is 34% below a 2020 level of business as usual. So it’s continuing to emit at the same rate as we do at the present. So it’s 34% if we grow at 3%, which means we stay stable in terms of our emissions. We haven’t even started touching our efficiency opportunities or renewable energy opportunities. If we do that and change our behaviour and, with the help of the regulator, bring down some of the institutional barriers, we can do it.
TB: Let me start by saying that the 34% is achievable but we also have to accept that is not just going to be achievable without cost. If we are going to achieve it, the first thing is that it is going to cost us. The price of electricity will rise from the 41c that it is to about R1.72 a kilowatt hour. The second part that we have to accept is that to get the renewable energies to the level where we can achieve the other goals that we as government want to have, we need an integrated resources plan, which includes coal, by the way. It does not exclude coal — being industrialised, you cannot have renewables without having coal as a major part of your generation mix.
GN: Yes, the first thing I wanted to add to was the fact that the target, the 34% reduction, actually takes into account the new coal-powered power stations, Amadou and Kusile. So in other words what it is saying to us is that we can’t just say that we are not going to achieve that
because we are committed to coal. That has been factored in so what we have to do is find out what else — we have to work out what is the most cost-effective way of reaching that target understanding that coal is already factored in. Yes, when you talk about social and economic, you have got to look at it as what is the most cost-effective way.
ST: I agree. We have got to do efficiency first. We have got to look at where we can use gas appropriately — and gas from plants like Secunda, which has got 22 flares going all the time and a gigawat of power waiting to be used. If we start harnessing and start doing things more efficiently, we certainly can reach those goals. But the real point is that we can’t be expected to make this leapfrog into clean energy with the world watching us unless there is some support from outside. There are climate investment funds being realised at an international level to assist with covering the incremental costs or the cost between what we would normally do and what the clean options are and those should help considerably.
TE: I think that it is very possible. There are examples across the globe of instances where another path has been chosen and you improve the quality of life of people. The point about doing this is not to see growth and a 6% target as the only way you can achieve job creation and poverty elevation. I mean, we have been talking for years about sustainable development as an approach to economic development and we have not really implemented the kinds of policies that get us there. So I would argue that even if we do get 6% growth, we have had experiences of what is called jobless growth. For instance, we do see that even with that 6% target, or even that 3% to 4% target, you get the trickledown effect and essentially we are not having to reduce our carbon footprint because it is something that the world wants us to do. We know that the impacts are going to be felt by the poor so our big challenge is to address poverty and the way you do that is to address what is making the poor more vulnerable into the future.
GN: I think that for anything to be sustainable, including businesses, we have to change. We have to start redirectioning ourselves. If the bus is going in the wrong direction, we have to get off. It doesn’t help to stay on any longer and I think that is the point — we have to. There are ways. For instance, I know there have been quite a lot of studies about carbon taxes and using them to feed back to the poor. I know it might be difficult to do in practical terms but we can certainly get our heads around it. Where you do the carbon tax and then you feed it back to the people who need it most, they would get more out of it than the people who are using more.
TB: If we look at the growth strategy as it was in the Seventies and the Eighties, it was based on the energy. Whenever you had 6% growth you would expect an electricity month growth of around 4%. The fact of the matter is that going forward you have to decap your economic growth from your electricity month bill, which means that you are still going to have energy-intensive users but the difference is that they have got to be efficient, they have got to use less and still provide the same growth. You have to find other systems that ensure that you do have the growth. But what you don’t have is the growth of your electricity directly coupled or linked on a one-to-one basis.
TE: There have been studies and, of course, the implications of introducing any new technology into an existing grid system and infrastructure set-up means it is going to be costly. But over the long term those costs come down and in fact become very competitive. Renewable energy, in a study that we have done over the long term, is far more cost-affordable and cost-effective than any other of the options available to us. I do want to make one point, Lerato. I think that businesses in South Africa need to understand — and it is not an environmental issue, it is a fundamental economic issue — that their competitiveness into the future will be judged by their carbon footprint and so, for example, there are going to be measures put in place globally that will penalise carbon-intensive goods and services. I think you, as businesses, have to start realising that now and adjust for that into the future.
ST: Yes, the need for stable baseload certainly is required and we have a lot of energy options in the continent. We haven’t really tested ours completely. We have good wind regime, we have got biomass and waste which can be utilised — a lot of these can give very good baseload for industry, but industry is not the only machine for creating jobs.
GN: Well, in South Africa, it depends very much where you live as well — whether a sea-level rise will affect you, whether you will have too much rain too often, floods, or whether there will be more drought and what plants will grow there in the future. So it affects, to a large extent, things like food security. Whereas before you may have been able to grow maize in a certain area, now perhaps you can’t grow it in that area any more, and that translates further into how do you package that maize. If it used to be in paper, now, if it’s more wet, you might have to put
plastic around it and [add] the cost of transport. So climate change is going to affect us in a different way in this country depending on where we live but certainly it is going to affect us a lot because we are a developing country.