This opinion piece, written with Ahmed Mokgopo, Africa Regional Divestment Campaigner for 350Africa.org, appeared in the Business Day on 20 Feb. 2019. It can be viewed here. For more details of the 350Africa.org campaign opposing new coal in South Africa click here.
The R20bn going towards coal-fired power stations Thabametsi and Khanyisa could be far better spent elsewhere
President Cyril Ramaphosa’s state of the nation address was less about the actual state of the nation as it is now than about the state of the nation as he hopes to see it. It was about an SA that is “emerging from a period of uncertainty and a loss of confidence and trust” into a period of “renewal” and “hope”.
This forward-looking focus is reflected in his constant references to the importance of improving education, and expanding youth employment. He stated that reading is “possibly the single most important factor in overcoming poverty, unemployment and inequality” and is a “critical priority” for the government. To improve learning environments, he said, he is determined to eradicate unsafe sanitation facilities at more than 3,000 schools within three years. He noted that a flagship youth employment service has been launched to start to absorb unemployed youths.
With the future very clearly in mind, he mentioned the devastating effects global warming is having, “damaging livelihoods, communities and economies”. In light of these impacts, he asserted that a just transition must take place, signaling a move away from coal, towards renewable-energy generation.
Given this focus on the future, it’s very hard to explain the government’s continued support, with taxpayers’ money through the Development Bank of Southern Africa (DBSA), for two new coal-fired power stations, Thabametsi and Khanyisa.
Research by the Energy Research Centre at UCT has shown how Thabametsi and Khanyisa are set to cost SA almost R20bn compared to a least-cost energy system. The power plants will add 206-million tonnes of greenhouse gases over their lifetimes, undermining SA’s commitments to cut carbon emissions and adding to the deadly external health costs that come from coal.
How does this square with Ramaphosa’s concern for the “devastating effects of global warming” or his apparent determination to pursue a just transition?
Climate advocacy group 350Africa.org used the same UCT research to show how the additional money could be allocated by the government to improve the quality of education and address the educational problems Ramaphosa outlined. It could certainly guarantee the eradication of unsafe sanitation facilities well within three years. Current funding for the eradication of unsafe sanitation facilities and the replacement of unsafe school buildings comes from the school infrastructure backlogs grant, which has been allocated only R2.3bn over the next two years. Compare that to R20bn that could pay for the entire school feeding programme, which feeds nine-million pupils a day, for the next three years.
In terms of youth development, R20bn would provide grants for 187,000 youths to attend tertiary education institutions for three years. This is likely to do far more to address the crisis of youth unemployment than one-year internships via the youth employment service.
Retrogressive coal-fired power
The opportunity costs of using the R20bn elsewhere are significant. It is nearly four times the current health department budget to maintain, repair and build new health facilities; it could provide 4.5-million South Africans with antiretroviral treatment for a year; the human settlements department could build about 150,000 new homes; while the social development department could use it to pay for four-million child support grants for a year.
By every possible metric, the building of new coal-fired power stations is a retrogressive step that directly contradicts Ramaphosa’s vision of the future. The UN’s Intergovernmental Panel on Climate Change stated late last year that there must be a 66% reduction in coal consumption by 2030, and that by 2050 less than 2% of the world’s energy should come from coal if we are to avoid climate catastrophe.
Responding to this urgent call, the world is turning away from coal — to date, more than $6-trillion has been divested from fossil fuels, while coal mines and coal-fired power stations are closing throughout the world. Coal mining and the generation of energy from coal is completely incompatible with national and global attempts to combat climate change. This is why Nedbank and Standard Bank have pulled out of funding Thabametsi and Khanyisa, while FirstRand Bank has withdrawn funding from Thabametsi.
The DBSA claims that it supports the “sustainable development” of resources, only funding projects that demonstrate responsible environmental practices. By continuing to fund Thabametsi and Khanyisa, the DBSA is flagrantly ignoring this policy and is letting the people of SA down.
As a small but significant step towards realising the nation that he wants to see, Ramaphosa must instruct finance minister Tito Mboweni to announce the withdrawal of DBSA funding from Thabametsi and Khanyisa in his budget speech. In doing so, he will save SA from the burden of 206-million tonnes of greenhouse gas, and will free up R20bn that could be either spent on pressing social issues, such as education or housing, or on a just transition from coal to renewable energy.