A just en­ergy tran­si­tion plan for S Africa is over­due

The Star Early Edition - - OPINION & ANALYSIS - Iago Davids Iago Davids is a mem­ber of the Cape Town based en­vi­ron­men­tal group Project 90 by 2030. Visit www.90by2030.org.za.

SOUTH Africa still has years of coal min­ing ahead, but ac­cord­ing to a 2010 study on peak coal pro­duc­tion in South Africa, the amount and qual­ity of coal will de­crease from 2020 on­wards. Ex­trac­tion, ham­pered by wa­ter shortages and the depth of the coal re­serves, will be­come more dif­fi­cult.

Fur­ther­more, global coal con­sump­tion has fallen for the past two years, a trend that will af­fect the de­mand for coal ex­ports. Do­mes­tic use of coal for elec­tric­ity and syn­thetic fuel pro­duc­tion must re­duce to meet our cli­mate change com­mit­ments. These are all signs of a tran­si­tion away from coal.

In a 2017 study by the In­sti­tute for Sus­tain­able De­vel­op­ment and In­ter­na­tional Re­la­tions (Id­dri) and Cli­mate Strate­gies ti­tled Lessons from pre­vi­ous coal tran­si­tions, they looked at 6 dif­fer­ent coun­tries and the tran­si­tions they made away from coal.

The study il­lus­trates what hap­pened to coun­tries that do not ad­e­quately pre­pare for the tran­si­tion and those who do, with the par­tic­u­lar in­ten­tion of “fa­cil­i­tate(ing) the de­vel­op­ment of fea­si­ble coal tran­si­tion sce­nar­ios in large coal pro­duc­ing coun­tries to­day” like South Africa. We are cur­rently stand­ing at the precipice of such a tran­si­tion.

Global de­cline in the de­mand for coal, loss of jobs in the coal sec­tor, clos­ing of coal fired power plants, mech­a­ni­sa­tion of the min­ing in­dus­try, a push for cli­mate change com­mit­ments to be met and con­stant de­mands from the unions to have a just tran­si­tion plan are all in­di­ca­tors. Just re­cently, two sep­a­rate, but linked, pro­cesses got un­der way.

First, the Coal Trans­porters Fo­rum (CTF), a small vol­un­tary as­so­ci­a­tion that rep­re­sents the in­ter­ests of the coal truck driv­ers in South Africa, ini­ti­ated le­gal pro­ceed­ings in the Pre­to­ria High Court in the form of an in­ter­dict. In their ap­pli­ca­tion, they have re­quested that the court pre­vent Eskom from sign­ing any new Re­new­able En­ergy (RE) Power Pur­chase Agree­ments (PPAs) and that all ex­ist­ing agree­ments signed in bid win­dow 4 of the Re­new­able En­ergy In­de­pen­dent Power Pro­ducer Pro­cure­ment Pro­gramme, that did not com­ply with statu­tory reg­u­la­tions, be de­clared null and void.

Sec­ond, Cosatu, the union fed­er­a­tion gi­ant, has no­ti­fied the Na­tional Eco­nomic De­vel­op­ment and Labour Coun­cil of its in­ten­tion to protest, de­mand­ing that all cur­rent PPAs be sus­pended and that Eskom must not sign any new PPAs. They have de­manded that the RE sec­tor be state owned.

The CTF and Cosatu have listed nu­mer­ous rea­sons for their ap­pli­ca­tion/protest, some of which are premised on ques­tion­able in­for­ma­tion. That aside, one of the con­cerns of the unions – job losses with­out ad­e­quate job cre­ation and reskilling of work­ers ie a lack of a just tran­si­tion plan – is valid.

Tran­si­tion is in­evitable in the en­ergy sec­tor. This can­not be em­pha­sised enough. The global trend of mov­ing away from fos­sil fu­els is gain­ing mo­men­tum and is an un­stop­pable wave of change.

There are a few in­ter­est­ing and im­por­tant lessons to be high­lighted in the Id­dri study.

Firstly, “It is ur­gent to start an­tic­i­pat­ing the tran­si­tion now to get the best re­sults for work­ers, com­mu­ni­ties and busi­nesses.” If we do not, we can all an­tic­i­pate a large num­ber of com­pa­nies clos­ing down, mas­sive unem­ploy­ment, a se­verely weak­ened econ­omy and sub­se­quent so­cial un­rest, be­cause of the afore­men­tioned. The study re­veals that those coun­tries that did not pre­pare for the tran­si­tion suf­fered greatly in the af­ter­math.

Se­condly, “The costs: preven­tion is bet­ter than the cure.” The study found that “… the fi­nan­cial costs of worker re­con­ver­sion and re­gional eco­nomic ad­just­ment are of­ten much smaller than the costs of fail­ing to im­ple­ment a tran­si­tion.” Fur­ther­more, no one should es­cape re­spon­si­bil­ity for the costs of the tran­si­tions… in­clud­ing min­ing com­pa­nies. These seem like ob­vi­ous con­clu­sions, but it is not so ob­vi­ous if there is no con­sen­sus that the tran­si­tion is in­evitable and prepa­ra­tion is nec­es­sary.

In an ideal world, where the gov­ern­ment is not mired in cor­rup­tion, where re­sources are be­ing utilised prop­erly for the ben­e­fit of the coun­try as a whole and not of a few elite, where the gov­ern­ment has al­ready ded­i­cated money to re­search and de­vel­op­ment into tech­nolo­gies that ul­ti­mately brought man­u­fac­tur­ing and pro­duc­tion in and max­imised the labour ben­e­fits from the RE sec­tor, wholly state owned RE would work.

How­ever, as it stands now, with scan­dal af­ter scan­dal, with fail­ing to pre­pare years ago, we have a sys­tem where pri­vate com­pa­nies are in the mar­ket and are nec­es­sary to ac­com­plish what needs to be done for a suc­cess­ful tran­si­tion in the short time left.

The CTF and Cosatu’s ac­tions have the abil­ity to change the land­scape of the game. The re­new­able en­ergy in­dus­try, po­ten­tially one of the life boats in a just tran­si­tion, is about to suf­fer a ma­jor set­back.

Should Cosatu’s de­mands be met, it would dis­cour­age, if not scare off, po­ten­tial in­vestors. When the job losses oc­cur be­cause of the tran­si­tion, the RE sec­tor could pro­vide em­ploy­ment to those who have lost their liveli­hoods.

We must come to terms though with the fact that the RE sec­tor can­not carry all the weight of the tran­si­tion.

Ad­vo­cat­ing for the pro­tec­tion of the fledg­ling RE sec­tor does not mean de­mand­ing the end of the coal sec­tor. It means pro­tect­ing a sec­tor that will pro­vide the sup­port South Africa will need when it tran­si­tions.

Pri­vate com­pa­nies in the RE sec­tor need to re­alise that to gain ac­cep­tance from or­gan­ised labour they will need to en­gage in se­ri­ous ne­go­ti­a­tions around the is­sues of bring­ing man­u­fac­tur­ing and pro­duc­tion into South Africa and in­creas­ing own­er­ship of the RE sec­tor by South Africans with both gov­ern­ment and the unions.

The unions, on the other hand, will need to be open to such ne­go­ti­a­tions and ac­cept pri­vate in­dus­try as a nec­es­sary part of the tran­si­tion plan. I can only spec­u­late that the un­der­ly­ing rea­son for Cosatu ini­ti­at­ing their pro­ce­dure with Ned­lac was to be­gin these ne­go­ti­a­tions. If so, the gov­ern­ment and pri­vate in­dus­try in the RE sec­tor must grasp this op­por­tu­nity with both hands.

They must be­gin by “forg­ing ba­sic con­sen­sus on the ques­tions of ‘whether and why’ tran­si­tion is essen­tial be­tween the gov­ern­ment, com­pa­nies, trade unions and other civil so­ci­ety or­gan­i­sa­tions.” A num­ber of civil so­ci­ety or­gan­i­sa­tions are at­tempt­ing to get this dis­cus­sion go­ing, but the real driver of this process must be the gov­ern­ment. Ev­ery stake­holder in the above­men­tioned list must com­pel the gov­ern­ment to be­gin ad­dress­ing this enor­mous sub­ject. South Africa is in a unique po­si­tion to learn from other coun­tries that have al­ready un­der­gone a tran­si­tion.

Time is not on our side. The study shows that it can take up to 25 years to suc­cess­fully tran­si­tion. The tran­si­tion has in some as­pects al­ready be­gun. We can­not af­ford to vac­il­late. When­ever the op­por­tu­nity arises, whether through pub­lic par­tic­i­pa­tion in par­lia­ment, open stake­holder meet­ings, po­lit­i­cal con­fer­ences, we should all at­tempt to bring this sub­ject to the fore­front and ask what is be­ing done to bring about and im­ple­ment a just en­ergy tran­si­tion plan.

The study il­lus­trates what hap­pened to coun­tries that do not ad­e­quately pre­pare for the tran­si­tion and those who do.


Richards Bay coal ter­mi­nal. The tran­si­tion from coal as an en­ergy source is in­evitable, says the writer.

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