Business and civil society should avoid falling into the trap of positioning coal in opposition to renewable energy in the just energy transition discussion. This was the caution from thought leader, strategist and economist Dr Miriam Altman at the 2023 Trialogue Business in Society Conference.
Addressing delegates on the second day of the event, she explained how entrenched interests tend to pit coal against renewable energy, slowing the necessary energy transition, particularly the adoption of new power sources.
Coal production not the same as coal-fired power
South Africa’s reliance on coal places it among the top 15 greenhouse gas emitters globally. In the face of climate change mitigation, the shift from fossil fuels to clean energy sources is an area of advantage and potential opportunity for the country. The transition will require just assistance for those companies, investors, workers and communities who stand to lose from the move away from fossil fuel technologies.
However, contrary to the narrative of vested interests, the introduction of renewable energy is not driving coal out of business. Altman explained that while coal is required for coal-fired power and synfuels, it has other outlets, making it important to distinguish between coal production and coal-fired power. Even in the energy transition, coal-fired power, though diminishing, will remain important for many years, as will coal exports, meaning that coal mines will still be needed.
Job losses in the coal-for-export market are the result of stagnating local exports, largely attributable to logistical issues. The global demand for coal continues to grow, though at a muted rate. Should South Africa wish to take advantage of this demand, there will have to be a stronger ecosystem to support the industry.
Meanwhile, South Africa’s Integrated Energy Plan projections indicate that coal will still have a role to play, albeit reduced, in the decades to come. A realistic assessment of the likely coal job losses from the energy transition is about 28 000 by 2050. These jobs, mainly in Mpumalanga, are associated with low education levels of workers and it will be hard to find equivalent opportunities.
Jobs needed across the economy
Altman told delegates that, rather than discouraging an energy transition, this reality should cast a spotlight on the general need for social plan capabilities and focus efforts on promoting economic dynamism that creates more jobs. “A provincial economic strategy should stimulate emerging industries with competitive advantage.” While coal industry jobs might not transition directly into these, there are wider benefits to building industries where there is high unemployment. She pointed out that such strategies are necessary regardless of just energy transition commitments.
Whatever the pace of progress towards the energy transition, the ‘just’ element demands clear decision making and timeous action, especially considering the socio-economic damage that has resulted from the forces holding back the transition. Poor performance in public infrastructure investment diminished the GDP by 1.8% annually between 2010-17, forgoing a possible one million new jobs. Meanwhile, loadshedding has reduced GDP by 2%, forgoing the creation of 180 000 jobs in 2023 alone. Numbers far higher than the potential coal job losses.
Altman concluded that the just energy transition calls for less focus on the voices of organised labour and elements of business that stand to lose out and are not adapting to the potential opportunity, and more focus on the weaker voices of those communities who will be most affected by climate change and suffer the effects of an economy with low climate resilience.