An open letter to Gwede Mantashe
Dear Minister Mantashe,
Why is the South African government so keen to cosy up with the fossil fuel industry? What is the attraction? Scientists have been telling us for decades that by burning fossil fuels we are belching out gases that are dangerously warming the atmosphere. But the fossil fuel industry,
rather than investing in change, has invested in questioning and obscuring the message and playing down the risks.
Now everything the scientists predicted is here to see in the real world. It is impossible to tune in to the news and not hear about a bigger storm, a more devastating flood, a longer drought, a more extensive forest fire, a new temperature record being broken or another animal joining the endangered list. How loud does the Earth have to shout before we stop and listen? How long will we delay when, as a 2021 report by Energy Innovation explains, “even a short-term delay in adopting strong climate policies dramatically increases the cost of decarbonization and risks irreversible ecological impacts?”
The attraction, of course, is money. Every politician seeks the holy grail of economic growth. Oil executives come, like Prince Charming promising to elevate us from rags to riches, by pouring petrocash into our economy. But right now, there is something more important than economic growth and that is survival. We can’t eat if farmers can’t grow grain and crops because of excessive heat, unpredictable rain or no rain. We can’t fish if fish are dying from heat and lack of oxygen caused by marine heatwaves. We can’t live if the Earth’s organs – the polar ice caps, the Amazon rain forest, the North American boreal forest and the ocean – are being mortally wounded.
But even if we narrow our focus from this dire bigger picture and set our sights on economic growth, the fuel industry’s claim that investing in expanding fossil fuel industries is an economic holy grail for South Africa is flawed on a number of counts—Firstly there are loss and damage risks. The world economy is being hit by the enormous economic cost of natural disasters and recovery from them. In May, the World Meteorological Association reported that economic losses from drought, floods, storms and wildfires had increased in the last decade by 50% compared to the previous decade. South Africa has not been among the hardest hit so far but has had its share of droughts and floods and has little resilience to cope with the financial burden of disaster management and reconstruction costs.
Secondly, there are stranded assets risks if we invest in oil and gas now. The energy transition is speeding up. The International Energy Agency reported in June 2023 that “Global renewable capacity additions are set to soar by 107 gigawatts (GW), the largest absolute increase ever, to more than 440 GW in 2023. The dynamic expansion is taking place across the world’s major markets.” Yet, fossil fuel companies are encouraging South Africa to explore and exploit new sources of oil and gas. It will take time for our oil and gas to come on stream and find markets. If the world is producing more oil and gas than the world demands at the time that South Africa starts producing, South Africa could struggle to find markets and could find itself with investments that have no value. If we transition to net zero by 2050, over US$350 bn in African oil and gas assets could be stranded.
Thirdly, if our economy continues to be heavily powered by fossil fuels, our goods will become unattractive and uncompetitive as countries seek to decarbonise their supply chains and impose carbon taxes to disadvantage carbon-intensive imports. Europe is already imposing carbon taxes. At the recent climate summit which took place in New York on 20 September 2023, the President of the European Union, Ursula von der Leyen, called for at least 60% of global emissions to be covered by carbon pricing by 2030.
Fourthly, we are at the start of a transition away from coal-fired electricity in South Africa as aging coal-fired power stations are retired. Experience from other countries shows how hard and expensive it is to make these transitions in a just way that minimises the disadvantage and suffering for the workers themselves and for the businesses in the towns providing services to that declining industry. Yet, oil and gas executives at this conference are talking up the idea of huge investment in building new oil and gas industries in South Africa. How can it make sense to invest hugely in infrastructure and skills in a new fossil fuel industry, knowing we will face the same difficult just transition issues for that industry in the future as we move to realise our climate commitments?
The fossil fuel industry claims that it is simply providing a service to the world by meeting demand while demand continues. But demand is continuing in part because the fossil fuel industry is obstructing rather than accelerating the energy transition. It funds think tanks and political lobbyists to protect its industry. We have also seen big fossil fuel companies, in the face of enormous profits made over the last year, pull back on commitments they had made to sectors in the new energy economy. Fossil fuel companies are not offering to help South Africa with its energy transition. Instead, they are seeking to get South Africa to invest in last century technologies that are now more expensive, more polluting, more damaging to our water sources and our biodiversity, and make us less competitive in global markets. But by far the worst of all, these energy solutions take us further down a path of planetary and humanitarian disaster from which there may be no road back.
The fossil fuel industry is not stepping up to its responsibilities at this crucial moment in history. It is time for South Africa to wake up to the fact that this seemingly cosy relationship with the fossil fuel industry is actually a toxic, exploitative, one-sided affair. It is time to ditch this relationship!
Read full press release here