In his February 2012 State of the Nation Address, President Zuma again referred to green jobs as a "solution"to unemployment. If only things were that simple in the real economy which the rest of us live in.
South Africans are starved for good news about more jobs. Little wonder then that talk in government circles about a green jobs bonanza has raised the hopes of many. But will South Africa's green strategies produce the transformation we seek from a 30% unemployment rate? In fact the picture that emerges after investigation gives as much grounds for concern as it does for hope.
Government has committed to cutting CO2 emissions by 34% over the next fifteen years in its Integrated Resource Plan . Economic Development Minister Ebrahim Patel, supported by President Jacob Zuma in several speeches, had declared green jobs as a key development for rolling back unemployment. There is talk of multibillion rand solar energy farms near Upington, wind energy in the Western Cape, and algae-based biofuels in the Western Cape. There are government's own roll out plans for one million subsidised new solar panels installed in houses. And at provincial level, Gauteng Province recently produced its own "Strategy for a Green Economy" this year (Gauteng Department of Economic Development, No 14, April 2010) to similar effect.
South Africa is also bound by non-tariff barriers to high carbon or CO2 emitting exports in accordance with international agreements, both within the G20 group of nations and at the Copenhagen climate accords in 2009 and Durban in 2011. Failure to comply may reduce our access to prime export markets in the future.
Besides, the International Labour Organisation (ILO) states that the existing market for green technologies is already worth US$1.3 trillion, and is set to double by 2020. UNCTAD, the United Nations Conference on Trade and Development, confidently forecasts that green technologies are likely to transform economies on the same scale as the invention of the railways, or of information technologies (ICTs) did in the previous century, creating millions of entirely new "decent" jobs in new sectors.
The Gauteng proposal envisages the creation of, inter alia, 148 000 new jobs in the alternative energy sector (solar, wind), up to 70 000 jobs in biofuels, 10 000 jobs in energy efficiency industries (e.g. light bulbs, retrofitting buildings etc.) and 7 000 jobs in rolling out government's plans for one million solar heating panels for homes.
The problem is that some of the rosy assumptions of the green jobs advocates have already raised eyebrows, their economic modelling amongst them. That's not all. The very drive to green our economy will stretch the capacity of the state to breaking point in South Africa, and may well, wittingly or unwittingly, see the public sector appropriate large additional sectors of the economy – to the long term detriment of growth and new jobs.
The devil is in the detail of the plans. Some of the money for greening the economy will come from developed nations, but most of this fundamental transformation will be funded by government. This means that even larger parts of the economy will be directed from the centre, with government as the central player. And it is here that we have to ask some hard questions.
1. It is demonstrably not true that moving to a green economy is purely a "win-win" situation for job creation. Jobs will be lost, affecting, amongst others, the 60 000 coal miners in this country.
2. In fact, South Africa is the world's third largest coal exporter, constrained only from becoming even bigger by the inability of the state to run our ports and railways efficiently. What will replace that income?
3. While oil dependency is a risk, so too is dependency on rare earth materials, 95% of which are sourced from one country – China. Such materials are vital to batteries for electric cars, and other green technologies (eg wind turbines).
4. We know that alternative energy supplies cannot function commercially without state support and subsidies. These subsidies will come from the private sector and individual taxpayers. That will remove limited investment resources from other economic trajectories that may work better.
5. Why do we trust South Africans political elites, given their track records so far, to make the right decisions on what economic strategies to follow, especially when they involve a fundamental transformation of the SA economy on the scale proposed?
6. In a state already marked by conspicuous corruption, what is to prevent rent seeking by the ruling classes and their relatives, locking us into technologies that may never be self-sustainable, and paid for by the real job creator, the private sector?
7. Why do we think our politicians, or anybody else's, have the ability to pick "winning" technologies? Did they anticipate the cell phone revolution? As Henry Ford famously said in another context, "If I had asked them, they would have asked for faster horses".
8. It is not true to say that current green technologies are disruptive in the manner of desktop computers or cellular phones. The truth instead is that we do not yet know what the transformative technologies that will eventually provide affordable, reliable and safe green energy are. Early indications point to some forms of genetic manipulation, but when the new idea comes, it will probably be as unthinkable now as the cell phone industry was to ordinary people just a few decades ago.
9. More than half the new "green jobs" created, says the pro-green economy UNEP (United Nations Environment Programme), will be in consultancies, academia, management, and regulation. Why do we uncritically accept the word of consultants and academics who have a direct material interest in the programmes they are advocating?
This is not to say we must be Luddites. But since it is clear that the transformation of a carbon-intensive economy to a green economy will not happen overnight without more state intervention in large swathes of our economy, we must apply our minds properly.
That there will be green jobs is clear. But there will also be losers. The mining industry in South Africa employs over 400 000 people. These workers work in a carbon-intensive industry. They are a haven for the unskilled or semi skilled workforce which suffers most from unemployment. But mineral beneficiation is carbon-intensive. Examine also a list of the major offending industries worldwide, listed in order of their carbon intensity; steel, aluminium, ammonia (the major source of nitrogen for all those "green" biofuels), pulp and paper – and household appliances.
That the state might have to incentivise current green technologies is no surprise. That it will penalise carbon usage is already obvious – see the R3.7bn p.a. levy Eskom pays for its coal usage, or the R360m we all pay for our plastic shopping bags, or the more recent tax on "polluting" vehicles, projected at R1.6bn p.a. And that is just the tip of the taxation iceberg to come, in an economy already straining at the seams to provide social support services off a limited tax base.
There is no doubt that the future lies with a less polluting and more careful use of finite resources by business in particular, and society in general. But the question that we are left with is whether we are at the start of a new dawn – or on the verge of another statist experiment which owes more to the failed utopianism of the last century than to inspirational visions of the next.
In sum, change there will be. The issue is change to what, how, and by whom? We must be wary of the consequences of state failure and crony capitalism as much as our policymakers are wary of "market failure".
(Note: This article was first published as an op-ed in Business Day,25/10/2010).
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