AIDC Strategy (2021 to 2025)
Context: A radical green new deal for SA
We are facing a global climate emergency with less than a decade to drastically reduce carbon emissions. South Africa is a significant part of the problem, estimated to be the 12th biggest emitter of greenhouse gasses in the world. The high levels of carbon emissions from SA relates to the country’s dependence on coal-based energy. Eskom, the State-Owned Enterprise responsible for generating approximately 90% of SA’s installed capacity, is among the biggest contributors to the country’s carbon emissions. It is critical that South Africa and the world undertake a transition to a low-carbon economy.
South Africa is also facing a deep socio-economic crisis manifest in growing hunger and precarity. This can be attributed to mass structural unemployment, where almost half the working age population is unemployed coupled with incomparable levels of income and wealth inequalities, included in this is the failure to provide decent basic services to the majority of the population.
The intersecting ecological and socio-economic crises in SA is rooted in the continued domination and unravelling of the mineral-energy complex. This extractivist mode of production, with a primary purpose of promoting an export-led growth model, is underpinned by a highly energy intensive industry. This is among the main reasons for the country’s high level of carbon emissions. In addition, the shift of the mining sector from a labour-intensive economy to one that is increasingly capital intensive, along with the premature de-industrialisation of the post-Apartheid SA economy, due to the liberalization of trade and deregulation of the financial economy, are some of the main reasons behind the jobs crisis.
The multiple and intersecting crises, creating ever wider polarisation and inequality is having a devastating impact on all sectors of society, but especially the most vulnerable and the most oppressed. In this context, the reproduction of life, that is the work mainly done by women in feeding, clothing and nurturing has come under such stress as a result of the collapse of essential services and the withering away of jobs and livelihoods. Social reproduction includes activities and institutions that are required for making life. Education, health care, and energy are some of the basic institutions that are necessary for the maintenance of life and life-making. Most of these activities and jobs are dominated by women workers. “The largest contraction in government spending since the transition to democracy” (Michael Sachs) has seen budget cuts across critical departments, namely education, health, housing, water and sanitation, i.e related to social reproduction and care work.
The government’s economic strategy of austerity (cuts in social spending, declining progressivity of the tax framework, and privatisation) is shrinking the economy, increasing unemployment, deepening the crisis of social reproduction and causing widespread hardship. The crisis of social reproduction is rooted in patriarchy but also austerity, privatisation of services and restructuring of the labour market, where greater levels of precariousness and informality are created. Diverted investment slows down production, increases unemployment, decreases revenue for social investment, and enlarges the budget deficit and the state debt. It also accelerates the race to the bottom, to sell-off the family silver and open the economy for and provide incentives to foreign investors. Trade and investment agreements provide the terrain for the exercise of the asymmetry of power between the transnational corporation, the community, government and the state.
This crisis manifests itself most severely in local government, which is forced to increasingly rely on user charges, at a time of users’ declining ability to pay. Services are also affected by increased privatisation and a significant reduction in the number of public sector and municipal workers. Already thousands of nurses, teachers and local government posts are not filled. Austerity purports to be a strategy for reducing escalating state debt. But alternative strategies exist, including curbing corporate profit shifting, tax reform and reallocation of surpluses in state funds.
Given the centrality of SA’s unemployment crisis to the social and economic crisis it is critical that a transition to a low-carbon economy is accompanied with the creation of a huge number of well-paying jobs that can reduce greenhouse gas emissions and meet peoples needs. To this end, we are seeking to contribute to developing a comprehensive programme for social, economic and ecological justice, in the form of a platform for a radical green new deal for South Africa.
End austerity and regressive taxation
Amidst discussions about how the economy should be restructured post-Covid-19, we are already seeing the consolidation of a neoliberal macroeconomic framework in large parts of the world – particularly in developing countries. In other words, going back to the old normal, but this time more intense than before. A recent report, Global Austerity Alert, indicates that, in 2021, 154 countries will implement major budget cuts. And that’s a trend that continues at least until 2025. Some underlying principles of this framework include:
- Austerity budgets: reduction in the level of public spending on social services and the shrinking of the public sector wage bill;
- Perpetuation of an export-oriented growth path driven by the extraction of minerals and commercial agriculture. This is enabled by greater levels of trade liberalisation and the further deregulation of financial markets; and
- Creation of an enabling environment for greater private sector involvement in the economy. This includes the roll-out of public-private partnerships and the increased privatisation of essential services.
Austerity purports to be a strategy for reducing escalating state debt. But alternative strategies exist, including curbing corporate profit shifting, tax reform and reallocation of surpluses in state funds. There is no chance of this situation improving unless the current economic strategy changes. To change it requires an evidence-based people’s campaign presenting alternatives to austerity measures.
Strategies to address SA’s energy crisis, as part of a just transition to a wage-led, low-carbon economy
Decarbonising the electricity sector would have the greatest impact on reducing SA’s very high level of greenhouse gas emissions and lower the carbon intensity of the economy. In the first instance, it is critical to address the most immediate problem – the country’s energy crisis. An unsustainable financing model, more than 20 years of bad policy choices and mismanagement has led to a lack of maintenance of Eskom’s fleet.
Now, the SOE is falling apart, resulting in a deep energy crisis. In 2022, South Africa experienced rolling blackouts for more than 150 days, a 100% increase in the amount of electricity cut from 2021. It is anticipated that 2023 will be even worse, with energy expert Clyde Mallinson predicting “permanent load shedding at stage 4 levels through 2023”. The deteriorating performance of Eskom’s coal-fired power stations is the reason for inadequate energy supply. As the crisis of Eskom deepened and as the country was hit by more frequent and longer periods of loadshedding, this focus on energy became increasingly relevant.
The impact of loadshedding on the economy has placed the government under great pressure to address the electricity supply crisis and has contributed to the idea that privatized renewables (wind and solar) offer the quickest and the most viable means to mitigate the electricity crisis. The increased liberalization of the South African energy market will result in rising energy prices and the exacerbation of energy poverty.
The JETP and JET-IP locking in green structural adjustment
At COP 26 in 2021, SA signed the Glasgow Agreement in what has been dubbed the Just Energy Transition Partnership (JETP) valued at $8.5 billion. Besides the lack of transparency viz the terms and conditions of the agreement, less than 4% of the $8.5 bn is in the form of grants. More problematic, however, is that the JETPs objective is to further privatise the energy generation and bring into existence a competitive electricity market. The unbundling of Eskom is a critical step in liberalizing the electricity sector and facilitating the entry and greater role of private capital.
Another aspect of the JETP is the accelerated decommissioning of coal fired power stations. Komati – decommissioned last year – was meant to be a practical example of how a coal fired power station can be decommissioned, while ensuring a genuine just transition for all workers in the value chain. Alas, many workers were left in the dark about the decommissioning plans, and there was no guarantee of future employment. The same process is likely to unfold at other coal-fired power stations scheduled for decommissioning and repurposing – for example Camden, Hendrina and Grootvlei power stations.
Transport
Transport, like energy, is a significant contributor to the country’s overall greenhouse gas emissions – accounting for 14% of SA CO2 emissions in 2020. It too is facing a process of restructuring to provide third-party access to our rail network and for the increased privatization of the ports. This is primarily to enable SA’s export-led economic growth model. In this context, it is important that alternative strategies for developing the transport sector consistent with expanding affordable public transport and developing efficient transport networks on a low carbon basis are advanced. It is equally necessary to contest the current narrative that there is no alternative to the private sector and to advance a public pathway and a public goods approach to decarbonizing the South African economy.
A public pathway
The liberalisation of energy and transport in SA forms part of a broader neoliberal austerity agenda. Privatisation is the one side of the coin; harsh budget cuts are the other side. These processes will deepen socio-economic inequalities, and result in the further deterioration of the delivery of public services. Based on AIDC research publication – Eskom Transformed – https://aidc.org.za/eskom-transformed-the-pic-eskom-debt-financing-a-just-energy-transition/ we have shown how the private sector will also put energy supply at greater risk and perpetuate energy poverty in SA. Additionally, the for-profit model is ineffective in relation to decarbonizing the energy sector.
Building on our research and work with trade unions and social movements, AIDC will continue to contribute to uniting popular forces to campaign for a public pathway to address loadshedding and energy poverty for socio-ecological transformation in SA. The thrust of this is geared toward supporting popular movements advancing and promoting a just transition from extractivism to a wage led, low-carbon economy through the development of a framework for economic, ecological and social justice, based on human solidarity and the fundamental democratisation of society, in South Africa.
OUR STRATEGY: Supporting Popular Resistance and Alternatives for a Just Transition
We believe that inequality, mass unemployment and poverty as well as racism and extreme violence against women can only be addressed through the day to day struggles of ordinary people in alliance with progressive scholars, professionals, activists and dedicated state officials to transform the currently captured and dysfunctional state into a capable and developmental state.
Between globalized corporate interests and crony and predatory forces it is necessary to build a more united, autonomous and democratic civil society that is rooted in grassroots formations that can both challenge existing power relations and advocate for viable and realistic alternatives.
Such alternatives need to be pre-figurative so that through their demonstration and piloting they inspire confidence and greater determination to fashion alternative models towards a just transition that includes challenging power relations that exist throughout society, through shaping alternative ways of being and living.
Challenging these power relations and changing the current political, social and economic inequalities can only occur when there is a united, self-aware and self-confident alliance of labour, community, faith-based, environmental and women’s organisations and movements.
Knowledge of the political context, policies of government and the behaviour of the private sector is vital to progressive organisations and movements to meaningfully address their local struggles and locate them within the broader national and international struggles.
People learn through doing. Hence research, information dissemination and popular education must provide a basis for campaigning and popular mobilisation that can facilitate the internalising of consciousness raising processes. AIDC works to link the local to the global and the micro to the macro in ensuring our partners sustained relevance and impact.
In order to achieve this capacitation, consolidation and mobilisation are necessary, and can be accomplished through an integrated set of strategies that focus on:
- high quality and evidenced based research;
- information dissemination of research and analyses outcomes;
- capacity building and popular education; and
- building movements and coalitions to advance campaigns and advocacy
