At Warsaw’s COP19 climate summit, South Africa has no bragging rights
- Patrick Bond
- 12 Nov 2013 (South Africa)
In the wake of the typhoon which did such incalculable damage to the Philippines, meaningful demands must be made upon richer countries to urgently cut emissions. This will require the Brazil-Russia-India-China-South Africa bloc to show they can reverse course, while meeting the vast social and energy needs of their increasingly angry low-income constituencies.
Intense social protests underway in all the BRICS countries reflect, in part, corporate-state connivance: extracting resources and polluting cities at a record rate, while providing inadequate or unaffordable services – from public transport in Brazil to electricity here in SA – to the masses.
If instead of rejoining the big emerging powers and Washington, as happened so disastrously at the 2009 Copenhagen COP15, couldn’t the SA delegation to Warsaw unite more closely with the hardest-hit African countries to express justified climate grievances?
Regardless, Pretoria would be taken more seriously if seen to be honouring its official pledge: cutting emissions to a “trajectory that peaks at 34 percent below a ‘Business as Usual’ trajectory in 2020.”
But that highly unlikely promise, made just before Copenhagen, was contingent on the North paying Pretoria (unspecified) climate funds and transferring low-carbon technology without the usual debilitating royalty requirements, according to Environment Minister Edna Molewa.
So far the strategy has not paid off in any way.
Will Molewa stand tall in coal-stained Poland the next two weeks, negotiating as hard as needed to save the estimated 182 million Africans expected to die prematurely during this century, thanks to climate change?
- How can she, given that Eskom’s overpriced, way-behind-schedule Medupi and Kusile are the two largest coal-fired power plants in the world now under construction, with unresolved allegations about African National Congress conflicts-of-interest (i.e. the ruling party’s shareholding in Hitachi, which is very very slowly constructing the plants’ boilers)? World Bank president Jim Yong Kim recently committed not to make available financing for such monstrosities in future on grounds of climate damage, after even the US objected to the $3.75 billion Eskom borrowed from the Bank in 2010 to build the $21 billion power plants.
- How can she, given the coal-export mania that is behind the government’s largest Strategic Infrastructure Project: expanding the world’s largest coal terminal at Richard’s Bay to benefit a projected 40 new coal mines – in spite of the extreme eco-health dangers these pose to local communities and nature in Limpopo, Mpumalanga and KwaZulu-Natal provinces?
- How can she, given that a year ago the Mail&Guardian revealed her ‘intervention’ against subordinates who wanted to fine ANC leader Cyril Ramaphosa for rampant coal-mining pollution, an intervention that “could raise the ire of other mining companies that were closed down or given hefty fines for operating without water licences”? She also approved a license for Coal of Africa’s massive Vele mining project near the Mapungubwe national heritage site.
- How can she, given that the largest single recent Transnet investment is not pro-people public transport, but the pipeline expansion doubling oil flow from South Durban to Johannesburg, a project still under construction which redirects the traditional route from white suburban to black peri-urban residential areas, and whose cost came in at nearly triple the original estimates?
- How can she, given that Pretoria’s other multi-billion rand carbon-intensive investments in recent years include SA airways plane purchases – and subsequent multi-billion rand annual bailouts – along with sports stadia widely acknowledged to be ‘White Elephants’ by even Danny Jordaan, local host of the Fifa World Cup in 2010?
- How can she, given how slowly renewable energy is being rolled out – with some high visibility townships getting a few solar geysers but the country’s incredible sunshine, wind and tidal potential going to waste – and how quickly, in contrast, Shell and other fracking firms got her permission to wreck the Karoo’s ecosystems through shale gas drilling, just as climate-hazardous as coal?
- How can she, what with the National Development Plan (NDP) promoting the R250 billion petro-chemical expansion in South Durban, a mega-project hotly contested by local community and environmental movements, whose aim is to raise container throughput from 2.5 million to 20 million units annually by 2040, thanks to a fully-privatised port on the old airport site?
That dubious expansion, like so many other counterproductive NDP infrastructure investments, will kill not only local manufacturing firms through a new wave of suffocating imports. It will also displace thousands of residents in Clairwood and Merebank (where blacks moved after Apartheid-era displacements), and hurt many more people who are the victims of Durban’s notorious truck accidents.
There were 7,000 truck crashes here in Durban last year. But Transnet’s idle rail infrastructure at the port is rusting and there are no immediate moves to shift containers from truck to train by setting up a dry port in Cato Ridge over the mountain (a move opposed by trucking firms). The two Field's Hill crashes caused by out-of-control trucks that massacred two dozen black kombi commuters in September passed without official commentary against container road freight.
The latest threat to pollution-saturated KZN is 'Carbon Capture and Storage', which aims to compress carbon dioxide from the petro-chemical and energy complex into potentially unstable underground storage sites. The state, Eskom and Sasol are gambling hundreds of millions of rands on the technique, even though its boosters are in rapid retreat from Norway to the US. Critics have successfully argued that it violates the Precautionary Principle, imposes excessive costs, increases energy to produce power by 25 percent, is an unproven technology, is at least a decade away from implementation, and prolongs the extraction of coal.
What can be said in Pretoria’s favour? The Treasury’s Carbon Tax Policy Paper, issued for comment six months ago, is probably South Africa’s most substantive climate policy because it makes preliminary commitments to ‘price’ the costs of pollution, even though these will be exceedingly mild taxes given the adverse balance of political forces.
So here again, a major rethink is needed. Climate justice not only requires dramatic reductions in fossil fuel use, but equity. A huge historic injustice has taken place, and continues: most of our country’s socio-environmental, energy and economic policies and activities worked against the interests of poor and working-class people, women, blacks and others in vulnerable constituencies.
South Africa’s carbon taxation has contributed to injustice, because, in the pricing of transport and energy, neither greenhouse gas emissions nor cost-benefit redistribution work in favour of the historically- (and presently-) oppressed.
To illustrate with one notorious example, Eskom still gives vast annual subsidies to the world's biggest mining house, BHP Billiton (so its Richards Bay aluminium smelters can zap imported bauxite and then export the profits to Australia), while raising poor people's electricity prices more than 150 percent the last five years so as to finance Medupi.
In this context, Treasury’s market-centric ideology is inappropriate to tackle climate change. This is, after all, the agency in Pretoria most committed to ‘getting the prices right’, so as to use ‘market mechanisms’ to solve problems caused by market failure, including climate change.
Fortunately, this ideology is not expressed in its most extreme form, for Treasury does not currently endorse ‘carbon trading’, which privatises the ‘right to pollute’ the air and sells it to the highest bidder. The COP19 is a dangerous place because of Poland’s commitment to carbon trading notwithstanding the European Union’s awful pilot experience. To its credit, the SA Treasury correctly observes that there is excessive concentration amongst the main polluting corporations so it won’t work here (but see http://storyofstuff.org/movies/story-of-cap-and-trade/ for an eight-minute video about many other problems).
Still, Treasury should re-evaluate its faith in market signals like carbon taxation, not only because of so many ‘disequilibrating’ processes – especially financial crashes – that dominate the SA and world economy. Just as importantly, such pricing only generates change ‘at the margin’, i.e. on additional units bought, sold or consumed.
Hence Treasury is minimising its public policy impact at a time we urgently need major system-rebooting shifts to achieve low-carbon goals. The Treasury should embrace planning and regulation, even where that generates policies and investments that run counter to the state’s ordinary pro-business priorities.
Given the political power balance in favour of neoliberal policy, there is no basis to expect Treasury to change its thinking. A ‘Just Transition’ is needed for our economic, energy, transport, agriculture, production, consumption and disposal systems, such as the Million Climate Jobs Campaign promotes here. This transition would require large-scale public subsidies, on the scale of the R850 billion promised by Treasury to promote the corporate-dominated high-carbon economy.
But imagine if there were climate justice, one day in the future. In addition to retracting its pollution subsidies, the Treasury would make a major commitment to clean, efficient, community-controlled energy; to zero-waste disposal strategies; to a climate-friendly food system that reduces distance and supports organic producers (especially small-scale black farmers); to a public transport system not characterised by privatised roads and elite fast-trains as at present (the Gautrain received the overwhelming amount of new rail investment and continues to require R830 million/year in subsidies); and to the R&D we desperately need to move forward.
To change course, those leading our economy and society must aspire to a new level of civilisation, not the hedonistic consumption-oriented strategy borrowed from the US and the minerals-export orientation inherited from Apartheid.
The critique above is not especially radical, given the scale of the challenge. In the New York Review of Books this month, Paul Krugman reviews Yale economist William Nordhaus’ new book The Climate Casino: “The message I took from this book was that direct action to regulate emissions from electricity generation would be a surprisingly good substitute for carbon pricing… the Environmental Protection Agency has asserted its right and duty to regulate power plant emissions, and has already introduced rules that will probably prevent the construction of any new coal-fired plants.”
We should try that here! Instead, commerce minister Rob Davies recently announced a third new coal-fired mega generator for Eskom.
But if SA does try to price carbon, Treasury’s proposed tax needs radical changes, starting with raising its level, and then more aggressively redistributing the revenues to the poorest in society.
How high should the tax be? In 2012, SA Treasury officials anticipated that “a tax of R75/t CO2e, increasing to around R200/t CO2e would be both feasible and appropriate to achieve the desired behaviourial changes and emissions reduction targets.”
But the current proposal scales this back dramatically: “When the tax-free threshold and additional relief are taken into account, the effective tax rate will range between R12 and R48 per ton of CO2e (and zero for Agriculture and Waste).” And even more beneficial to corporations, “one of the ways to recycle the expected carbon tax revenue is by reducing other taxes. One such tax that could be reduced is the existing electricity levy on electricity produced from non-renewable sources (e.g. coal) and nuclear energy."
The impact of the very low rate and the large loopholes envisaged will be to neuter the tax incidence when it comes to large corporate polluters, making it impossible to cut emissions to the target.
The low ambitions are exacerbated by Pretoria’s pricing of state services, which work against poor people and the planet, in favour of multinational corporate profit. The essential question we need to ask about carbon taxation, who shoulders the burden, requires both more analytical sophistication and a much more creative policy orientation, such as a Basic Income Grant mechanism to fairly redistribute revenues.
And the current inadequate Free Basic Electricity policy – sometimes provided poor people at just 50 kWh/household/month – requires both a major increase, and fusion with a much more progressive block tariff drawing on both national-local and local-local cross subsidisation. (That would require ditching the prepayment card system, for prepayment technology does not permit the scale of tariff pricing change required.)
Similar considerations should be applied to other sectors – including transport, agriculture and industrial production – where it is likely that Treasury’s carbon tax will simply be passed on to poor people.
Currently South Africa’s per-person protest rate – often termed ‘service delivery’ but more generally aimed at neoliberal public policies including the pricing of electricity, water and sanitation, housing, etc. – is at the world’s highest level, according to available police statistics. And South Africa overtook Brazil over the last decade as the world’s most unequal major society.
These factors suggest that Treasury officials sensitive to social unrest would change many of these policies as a matter of urgency, before a 2011-style North African/Arab uprising occurs in South Africa. No climate justice, no peace.
Furthermore, great care must be taken that corporate pressure is rebuffed, because Treasury has a reputation for bending to big business. The ability of ‘crony capitalist’ relationships to distort Pretoria’s ambitions is now legendary. The Energy Intensive Users Group’s influence over the recent Integrated Resource Plan for electricity was one especially revealing example.
Because Molewa’s environment ministry has so little power and she seems to be malevolently influenced by the mining barons atop her party, it is the Treasury that needs most scrutiny now. For while claiming to downgrade civil servants’ and politicians’ perks last month, finance minister Pravin Gordhan has neglected the state’s more wasteful and destructive ‘corporate welfare’ policies.
He probably won’t address these politicies until a serious left electoral challenge arises, and so taken together, Pretoria’s climate-destroying policies mean that Treasury’s carbon taxation efforts won’t convince anyone.
Since climate change is the most important crisis ever, and since South African industry is amongst the world’s worst polluters, it is incumbent upon our citizenry to force politicians, officials and big business to urgently reverse course.
However, judging by both our and the world elite’s business-as-usual attitude, Warsaw will be another failure, like the Durban COP17 was two years ago. And this in turn will generate new civil society protests against rulers out of touch with reality, in so many potentially cataclysmic ways. DM