Can the economy be placed before jobs?
The old argument of jobs vs environment is being resurrected in response to Treasury’s proposal to introduce a carbon tax and the National Climate Change Response Policy provision to set a national carbon budget within two years.
While denial of climate change as a consequence of human activity is increasingly recognised as the refuge of scoundrels, it is widely argued that the South African economy is so locked into our coal dependence that we cannot achieve our development objectives while weaning ourselves off it.
Talk of a “green economy” is rife, but regarded by most in business as a new sector, an add-on to an economy that should not be subject to major disruption. A concerted shift from capital-intensive to more labour-intensive economic activity is presented not as a threat to returns on capital, but a threat to jobs.
There is growing enthusiasm for business opportunities based on the value of ecosystem services, but the prospect of introducing direct charges to account for the externalised costs of entrenched activities has prompted dire prophesies that it will “kill the economy”.
It is not bluntly stated that deferring into the future the real costs of current resource use, including depletion of the carbon-cycling capacity of the atmosphere, is a requirement of our economy or precondition for economic growth, but the implication is clear. This is the mind-set required to set the current imperative for job creation against the imperative for a decisive shift to a low-carbon economy.
It is reinforced by the urgency of job creation being more immediately tangible than the urgency of reducing greenhouse gas emissions, the consequences of which lag behind the emissions by a generation or more. Considerable potential to create new green jobs is uncontested.
A consistently positive correlation between higher employment and more sustainable practices, though well supported by studies by agencies such as the United Nations Environmental Programme and the United Nations Development Programme, is more controversial, particularly as considerable effort has gone into establishing that green options are not too expensive, although labour is a relatively costly input.
Given the consistently higher employment rate of renewable energy technologies, per unit of investment as well as energy output, compared to fossil and nuclear energy, it is argued by sceptics of renewables that the higher proportion of costs in up-front capital requires diversion of finance that would otherwise yield greater employment benefits elsewhere in the economy. This line of reasoning, particularly beloved of those who hate the sight of wind turbines, is not accompanied by analysis of costs and benefits of competing investment opportunities.
A single episode in the Spanish economy, during which employment declined as the deployment of renewable energy technologies grew, has been given enormous airplay by sceptics. Even if the slender evidence of causality is accepted, this single exception does not negate established trends elsewhere.
The International Labour Organisation has found in favour of a rapid shift to renewables, for optimal employment, and this with strong representation of workers in extractive industries. When it comes to the use of biomass, the argument shifts to the quality of jobs: the unemployed masses should not be demeaned with labour on farms indulging in such practices as conservation agriculture or low-tillage planting.
Commercial production of high-grade biofuels is accorded a role, but the economics are deemed to require industrialised agriculture, while subsistence becomes a dirty word. Much is made of the number of people employed in coal mining, despite a severe decline in the rate of employment: from 1980 to 2000 the rate of employment coal supply to power stations declined by 75%.
The logic that as we have coal, we must use it, is not applied to our far more abundant solar energy resource endowment Another contention used to reject anything more than incremental change is that capitalising on our other mineral resources is not possible without a high level of base load (constant) electricity supply and that such demand cannot be met with renewable resources.
However, continuous supply is always a product of sound management of a portfolio of generation and transmission assets. A centralised system with mostly very large power stations has pros and cons.
The technologies exist to develop a sophisticated power supply system integrating inputs from multiple decentralised renewable resources from around our region, with massive gains in resource efficiency.
There are very significant challenges involved in developing and operating such desirable infrastructure, particularly in skills development, and it will take a few decades, but it does not require significant attrition in mining jobs.
Ascertaining the net employment impact of transforming our economy as a whole to green or truly sustainable practices requires complex modelling, with so many assumptions and variables that any results are readily contestable.
For South Africa, a carbon-intensive economy firmly integrated in international markets, such impacts are primarily a product of assumptions about the extent to which the rest of the world is undergoing similar transformation.
The proposition of net job loss in a timely transition to a low-carbon economy is premised on the assumption that South Africa would be embarking on a path of lonely virtue. One might conclude that much of our business and industry are planning for a global failure to avoid catastrophic and runaway climate change.
Richard Worthington is the manager of the climate change programme in the Living Planet Unit at the WWF South Africa
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