The Green Transition: South Africa special
Weekly analysis of the shift towards a new economy.
Dear Readers,
Happy Friday from the team at Spotlight – the New Statesman’s policy section. As ever, you can find our coverage here.
We’ve got a great dispatch from our very own policy correspondent Samir Jeraj this week – follow him on Twitter/X/the world’s favourite micro-blogging app.
He’s bringing you a smart bit of analysis from South Africa, on the front lines of its own ongoing energy crisis, looking at how the green transition is affecting the developing world (my invitations to these jaunts keep getting lost in the post…).
Let’s get right into it. Have a great weekend!
Special dispatch: South Africa’s net zero journey
The Green Transition comes to you this week from South Africa, basking in its dramatic Rugby World Cup victory over New Zealand. Following the end of apartheid, Nelson Mandela famously drew upon the national obsession with the sport to bridge the racial divide and forge what he called the “rainbow nation”. Nearly thirty years on from their first free elections, South Africa may be Africa’s most industrialised economy, but suffers an unemployment rate of over 30 per cent and a youth unemployment rate of 60 per cent.
In recent years, the long-term structural problems created by over forty years of apartheid and 300 years of colonialism have been exacerbated by the Covid-19 pandemic and the problem of “load-shedding”, where the power supply cannot meet demand, leading to unplanned blackouts (I experienced several of these in just the first day here). The blackouts problem is itself a legacy of underinvestment in power infrastructure and maintenance, but it means disruption throughout the industrial and tech economy.
The impact of high unemployment and inequality can be seen in the pervasive phenomenon of de facto segregation and securitisation; houses with solar panels can be glimpsed from the road behind electric fences adorned with “armed response” advertisements.
A transition to renewables is sorely needed – and desperately wanted – here, in a country where the energy mix is still heavily dependent on coal, a point made to us press trip journos by Peter Van Binsbergen, the CEO of BMW South Africa. The company has recently invested $224m in its factory near Pretoria to build battery electric and hybrid vehicles.
The factory, contained in large warehouse-type buildings, currently assembles cars for export (mainly to Europe). It has the feeling of something like an airport, with an array of parts being moved around the roads within the site by small utility vehicles. Inside the paint shop, the car bodies are conveyed by machine and gracefully dipped into a series of tanks containing the necessary chemicals and paints to protect against corrosion before being heated in an oven to dry.
The move to EVs is part of a wider drive for sustainability, which ranges from efforts at reducing waste to landfill by an impressive 100 percent, to improving biodiversity on their estate and using biogas to generate 30 percent of energy needs with the ambition to become fully renewable. However, within South Africa, the lack of charging infrastructure and the vast size of the country mean they are also looking at hydrogen fuel cell cars – with the hydrogen coming via the abundant solar energy in the Eastern Cape. Whether the government and industry can work together to put the new infrastructure in place for this is, however, still in question – the ruling African National Congress party’s record on infrastructure delivery and upgrades is patchy, at best.
As the academic and commentator Dr Ongama Mtimka told us at an event, “The All Blacks took us to a dark place,” drawing the comparison between the successful final of the Rugby World Cup, and the fact that South Africa has endured and survived the dark periods of its history. The challenge for the energy transition here is as much about how it can heal the inequalities created by apartheid as meet the energy needs of industry and consumers. To do either of these, the country will need access to billions in climate finance – an issue which will be high up the list of discussion at the Cop28 meeting beginning at the end of the month in Dubai.
At 2009’s gathering in Copenhagen, developed countries committed to mobilising $100bn dollars a year by 2020 for climate action in developing countries. That promise was not kept. In 2020 $83bn was mobilised, according to the OECD, a figure Oxfam said was inflated by overstating loans and climate benefits – the real figure, they said, was just $24.5bn. In any case, the United Nations Conference on Trade and Development (Unctad) said that even the $100bn target was a fraction of what was needed – poor countries face sky-high interest rates and debt servicing charges when compared with their richer equivalents, and are sometimes resistant to lectures from the wealthy, industrialised, and post-industrial West about over-reliance on fossil fuels.
In a partnered article by Unctad article in New Statesman Spotlight last month, a representative of the UN agency said that “developing countries face a gap of $4trn a year to fund the achievement of the sustainable development goals, up from $2.5trn in 2015”. Those goals extend beyond just climate targets to broader social and economic agendas, but the figures give an idea of the scale of the challenge.
When world leaders from a newly net zero-sceptic Rishi Sunak, to South Africa’s president Cyril Ramaphosa, meet in the UAE for Cop28 in just under four week’s time, they will certainly have a lot to talk about.
Samir’s trip was funded by BMW Group. The New Statesman Spotlight has retained editorial independence throughout
In Brief
All at (North) Sea: Nick Ferris has written a data-driven piece on the decline of the North Sea basin – and why new oil fields are bad news for North Sea workers.
What a Cop-out: In keeping with the theme in Samir’s piece above, we’re re-sharing this interview with a head of investment research at the United Nations Conference on Trade and Development (Unctad). It’s a smart bit of partnered content looking at the financial barriers to sustainable development in place for the developing world.
Let’s make it public(ly owned): The Common Wealth think tank have this report from earlier in October looking at the case for publicly owned energy transmission and distribution. It claims that nationalisation would make decarbonisation easier, and result in long-term savings for both consumers and the taxpayer.
See you next week.
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The Green Transition is produced by Spotlight, the New Statesman's online policy section and print supplement. Spotlight reports on policy for the people who shape it and the business leaders it affects. Explore our in-depth reporting and analysis here.
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