GRACELIN BASKARAN: Ditching coal for renewables will help tackle inequality

The events of the past few days have shown us the deep interconnectedness between inequality and social fragility. Rising inequality and despair in communities has triggered serious social unrest.

As South Africans look to the government for answers amid the chaos, a tenable social and economic development strategy that reduces inequality must be a priority. This will require re-examining the country’s relationship with coal — a silent and long-term perpetrator of inequality.

A total 90% of SA’s electricity comes from coal. The industry creates a skewed distribution of costs and benefits. Just five large companies mine and benefit from 85% of SA’s coal, and the poor bear the brunt of the impact. Here’s why.

Coal mining leads to a loss of economic activity for surrounding communities. Even with the best post-coal mining rehabilitation, which is rare, land that has supported coal mining operations cannot be used to grow crops. Though Mpumalanga contains almost half of the country’s high-potential arable land, 60% of that area is subject to coal mining rights or prospecting applications. Rural municipalities can thus neither use the land nor rebound from the closure of large-scale coal mines by turning to agriculture, one of the few alternative economic activities.

Surrounding communities are also most directly affected by the tug-of-war between food security and fossil-fuel-based energy security. Research shows that if coal mining continues to grow in Mpumalanga, about 240,000ha land could be lost, translating to 1.2-million tonnes of maize, enough to dent SA’s exportable surplus of maize, and in drought years even threaten domestic food security.

Accelerating decline

The adverse health consequences of coal mining disproportionately affect the poor living in densely populated townships and informal settlements on the highveld, which is home to a dozen Eskom coal-fired power stations and Sasol petrochemicals plants. The particulate matter, sulphur dioxide emissions and high concentrations of heavy metals have dire health consequences for surrounding communities. It has been estimated that pollution from coal-fired power plants kills about 2,200 South Africans each year, but evidence that emerged in recent litigation over air pollution in the highveld suggests the number of deaths could be up to five times higher.

While high unemployment has become a driver of violent riots, the often-touted benefit of job creation for local communities has rapidly eroded, partially due to mechanisation. Employment in coal mining peaked at 135,000 in 1981 and had fallen to 91,000 by 2020. Based on global trends, this decline is likely to accelerate. In the US, there were 90,000 coal mining jobs in 2012, but as the world moved to cleaner energy this halved to just 46,000 by 2020.

Just because SA has coal doesn’t mean it is economically or socially sensible to mine it. With targeted effort we can use the energy sector to reduce — rather than worsen — inequality. This can be done through the following primary avenues.

Cheaper alternatives should be used. Lower-income households have been heavily affected by electricity tariff hikes in recent years. In April, Eskom tariffs increased 15.6%, far higher than the annual inflation rate of 3.3%. Transitioning to renewable energy can drastically reduce electricity costs and leave households with more income for human capital investments, such as education, food and health care. 

Job creation

The Council for Scientific Research and Industrial Research (CSIR) Energy Centre released a study in 2019 revealing that renewable energy is 40% cheaper than new coal-fired power stations, affirming the important role it could play in supporting household livelihoods.

A transition to renewable energy has the potential to trigger large-scale job creation, as seen globally. In the US, over the next nine years renewable energy generation is forecast to create 500,000-600,000 jobs in the solar, wind and battery storage industries, covering manufacturing, construction and professional services.

Likewise, the US Bureau of Labour Statistics has forecast that the country’s two fastest-growing jobs through 2026 will be solar installers and wind technicians, with growth rates of 105% and 96% respectively. Notably, many of  these jobs can absorb semi-skilled labour through on-the-job training. To sweeten the deal, renewable energy jobs have a better gender balance — in the US, women held 32% of renewables jobs, compared with 21% of fossil fuel jobs.

It has been a long week in SA; the social and economic future of the country is at a critical juncture. Inequality and social fragility have never been so palpable. If the government is serious about supporting equitable growth and job creation, a plan to shift away from fossil-fuel-based energy security to renewable energy generation must be a mainstay of the way forward.

• Dr Baskaran, a development economist, is senior research fellow at the University of Cape Town's Development Policy Research Unit.