ROSS HARVEY: No, coal is not a necessary evil to develop SA

A new class action lawsuit being brought against Exxaro puts the role of coal in our society firmly in the spotlight.

Depending how one measures it at any given time, SA depends on coal for about 80% (or 42GW) of its electricity needs. The national transmission grid is almost wholly configured to ingest coal-fired power from Mpumalanga. This explains why the roughly 6GW of renewable energy potentially available from the last bid window (6) of the Renewable Energy Independent Power Procurement Programme (REI4P) has not come on stream.

Investments in grid upgrading are essentially nonexistent. There are insufficient ingestion points in the regions producing complementary wind and solar power (Northern Cape and Eastern Cape). About 6GW would have alleviated roughly 30% of the current 20GW deficit and pushed the electricity availability factor back up to manageable, if not acceptable, levels.

Unless things change rapidly in the policy landscape we are stuck with coal for the foreseeable future. This raises a serious conundrum in the context of climate change and talk of a “just energy transition”, especially with this week’s climate change negotiations at COP28 in Dubai.

On the one hand, those who see justice primarily in terms of pro-poor industrialisation often seem tempted to argue that coal is just a necessary evil on the road to prosperity. SA is the 14th-highest emitter of carbon dioxide in the world but is a flash in the pan compared with emissions from China and the US combined.

Moreover, it is hardly comparable to the rich world’s consumption-driven ecological footprint. Without electricity industrialisation is impossible. As it is, along with the rest of Southern Africa, SA is experiencing deindustrialisation. In other words, we are seeing a reduction in manufacturing value-add, and a declining share of employment in manufacturing sectors.

This is happening earlier, and at lower per capita income levels, than it did with our industrialised counterparts. The latter moved out of manufacturing into high value-add services once manufacturing had generated broad-based wealth. Premature deindustrialisation relegates a country to perpetual middle- to low-income status and high levels of inequality.

In this argument, coal-fired power is a driver of “reindustrialisation” that will create wealth. We can worry about emissions later — the West, China and India must reduce emissions while we industrialise, as this is only fair. Moreover, the coal mining industry supports thousands of relatively well-paid jobs. Without that income in a context of serial structural unemployment at about 40%, how could we possibly think of shutting down coal and leaving it in the ground?

On the other hand, those of us who take a more nuanced view of justice object to the above argument along the following lines. We accept that reindustrialisation is a development imperative. However, it is too simplistic to argue that coal is a necessary evil to accomplish that end. The end does not justify the means. Mining coal carries extensive negative externalities that still go unaccounted for.

Negative externalities are the divergence between social costs and private returns. Coal mining (and burning) carries perhaps the most intensive social and environmental externality burden of any economic activity on earth.

Ten years ago I reviewed a book by physician Alan Lockwood, The Silent Epidemic: Coal and the Hidden Threat to Health. What still haunts me is his point that coal-related deaths are never recorded on death certificates as “coal-induced pneumoconiosis” or related ailments that precipitate early death. While the income from coal jobs keeps extended families alive, the costs of early death directly related to those jobs are devastating and often conveniently ignored.

This is tricky terrain. How does one measure whether coal jobs are worth the hidden social and environmental costs, especially when we consider the deleterious effect of coal mining on freshwater supplies in Mpumalanga? The first step to resolve the conundrum is to recognise the false dichotomy. It is not a matter of coal jobs or poverty. However, it is true that a loss of coal jobs has acute, concentrated effects.

The gains to society from cleaner energy and a more diversified supply from renewables (including small modular nuclear reactors) are diffuse. Foreign investment would flow, which would in turn give confidence to local equity and debt investors to support new projects across all sectors. Investment into new mining exploration pipelines for minerals and metals required to power global energy transitions would also flow, provided we managed to fix our mining governance landscape.

However, jobs created in renewables are likely to be far away from the areas affected by downscaling coal. And even if we were to solve load-shedding tomorrow with large-scale renewables, the immediate loss of coal jobs and the negative effects on those families would cause sociopolitical grief and potential instability in the absence of a practicable anticipatory plan.

The second step is therefore to anticipate the effects of downscaling coal and simultaneously build up renewable projects and a critical raw materials (minerals and metals) exploration pipeline. Anticipating the effects of coal job losses requires significant investment in reskilling coal workers and transforming the Mpumalanga region into a tourism and agricultural hotspot, fully cleansed from the negative fallout from coal.

The tourism potential of the region is underappreciated and therefore underdeveloped. Of course, this new economic vision requires radical governance transformation at local municipal level, but that is a column for another time.

We must move away from easy “whataboutism” and not tolerate the toxic effects of coal’s negative externalities or hidden costs. The environmental and social costs are offloaded onto poor communities that can least afford it. Arguing against coal is hardly unjust to the poor, especially given the suffering coming to light through the Exxaro case.

We must simultaneously give serious thought to what an appropriate alternative economic vision might look like. With COP28 in action, and the reality of humanity having cooked six of our nine planetary boundaries, the argument against coal could not be more urgent.

Justice is nuanced; a reductionist view provides a smokescreen behind which coal apologists hide. We have to move beyond this and take some tough decisions that ensure a more sustainable future for all of us.

• Dr Harvey is director of research & programmes at Good Governance Africa.