A new report on South Africa’s energy future warns that if the nation does not rethink its development strategy it could herald ruin for local farmers and the poor.
It calls for a long, hard look at the accelerated and shared growth initiative for South Africa (Asgisa).
The Association for the Study of Peak Oil and Gas’s (Aspo) South African chapter released its report on the country’s energy future last month and issued a caveat to the government: the country has to switch to a path of sustainability for the sake of both the economy and social stability.
The report says the combined effect of weakening global oil and natural gas reserves, climate change and global monetary imbalances is likely — besides having significant effects on global and South African economies — to disrupt the way people access their food.
“Food prices will continue to rise as high levels of inflation return to South Africa for the first time in 20 years. With many farmers facing financial ruin, food production is decreasing, creating shortages that drive prices ever higher. This creates severe problems for the poor,” it warns.
The report also points to drought resulting from climate change as having a major impact on access to food.
If action is to be taken to keep South Africa’s fledgling economy adrift, the government must “critique the assumption of exponential growth, which underlies our economic growth strategies, Gear and Asgisa”.
“If we grow our economy at a constant rate of 6% a year, after 11 years its size will have doubled and we will have consumed more energy and other resources than we have in our entire history.”
Simon Ratcliffe, the chairperson of Aspo South Africa, says the country cannot afford a “business-as-usual” model any more. “We need to prepare for oil depletion now. We are running out of time in all sectors in South Africa.”
The report warns that if South Africa continues on this path it will be met by a “major shock”. Inflation will spike, driven by rising oil prices; interest rates will rise to quell inflation, but will depress consumer spending further; and unemployment will rise rapidly.
“These impacts are likely to include far-reaching consequences for energy, food security, settlement patterns and social stability,” says the report. “The risk of ignoring these impacts is far greater than the costs of attending to them now.”
The organisation says evidence suggests that global oil production will probably decline between 2007 and 2020, with “significant risk of rapid price spikes”.
“We are at a critical point,” says Ratcliffe. “When oil production peaks in the very near future, oil will get only scarcer and more expensive. And this has dire implications for nations in Africa and South Africa.”
The report emphasises that to sustain South African society, a paradigm shift from “exponential growth” to sustainable development through the use of renewable resources and a change in consumption patterns is needed.
The report says organic and localised urban agriculture will enhance food security, which will be threatened by oil depletion. It also recommends that eco-villages with energy-efficient buildings be promoted.
It calls for government leadership in setting up policies to lead the country towards the “renaissance” scenario of sustainable development.
The report highlights South Africa’s relatively low oil dependence, its well-established synthetic fuels, substantial wind, abundant solar energy and uranium and coal resources as critical strengths in its energy security future. But it warns that South Africa’s high dependency on imported oil for transport and its energy-intensive industry could severely threaten its energy security.