Begone, prophets of doom!

The prophets of doom have a long history.  Job was prominent among those who suffered, yet remained confident even when his supposed friends told him the end was nigh. Recently, the breed has spawned a new source of doom - "The fossil fuel industry must be put out of business by 2050 to avoid dangerous climate change" intoned one David le Page recently in the Mail &Guardian. He is part of a long tradition of those who have advised abandoning all hope when facing difficulties.  Fortunately history has a message for him and his kind – the human spirit is such that it can rise to almost every challenge.

Le Page’s thesis is that if mankind consumes much more fossil fuel, the additional carbon dioxide in the atmosphere will cause the average global temperature to increase more than 2^oC above what it was in the pre-industrial era before 1800.   It is a difficult thesis to substantiate, if only because we do not know exactly what the average temperature was in the early part of the 19^th century.  We only started to have some idea of the global temperature around 1860, when calibrated thermometers became widely available.  Since then, it has warmed by a little over 0.8^oC.

The million dollar question is how much of this warming is caused by added carbon dioxide.  Clearly not all of it, because the temperature shot up between 1910 and 1940, and there was little increase in carbon dioxide over that period.  So we don’t know how much extra carbon dioxide is likely to cause the atmosphere to warm by 2^oC.  It seems decidedly irrational to propose getting rid of fossil fuels, all our coal, oil and natural gas, to achieve a target which is so ill defined.

Proposing to get rid of fossil fuels becomes even more irrational once you realize than nearly 90% of all the energy we use comes from fossil fuels, worldwide.  South Africa uses fossil fuel for nearly 95% of its needs. So the world cannot be weaned off fossil fuels overnight.  Indeed, right now the use of fossil fuels is growing rapidly, and that growth seems likely to persist as China develops, India follows and Africa finally takes off economically.

There is a direct relationship between economic growth and the consumption of energy.  When nearly 90% of your energy comes from fossil fuels, then there is an equally close relationship between economic growth and growth in fossil fuel use.  So in calling for restrictions on the use of fossil fuels, Le Page is in fact putting in a plea for less development.  That is all very well if you are part of the developed world, but if you are in the process of developing, and have millions living in poverty, then you actually view such pleas as highly irresponsible.

Events in India illustrate this very well.  When China announced it would start to curb its growth in emissions after 2020, and would aim for zero further growth after 2030, India went on record as saying it was not in the least interested in any curbs on emissions.  Its development problems were such that eliminating poverty was far more important than addressing climate change. Recently, it has banned foreign funding of Greenpeace and other non-governmental organisations which it saw as posing a “significant threat to national economic security.”  A decade ago, India was emitting about twice as much carbon dioxide as South Africa; today it is emitting about four times as much and growing at about 100 million tons per annum.

We must not underestimate the benefits of fossil fuel use. If the internal combustion engine had not come into widespread use during the 20^th century, we would have seen massive starvation on earth.  In 1900, nearly half the area devoted to agriculture was used to grow fodder for draft and carriage animals.  By 1940, fodder was still vital.  Surprisingly, the largest use of horses in warfare was the German invasion of Russia in 1942, which involved about one million animals.  Fossil fuels have allowed us to convert huge tracts of land to the job of feeding people, not animals.  That, and the increase in productivity due to scientific farming, has meant that the supply of food has grown faster than the human population, so starvation is no longer a real threat for most people.

While renewable energy may have its place, we have to remember that modern economies need constant power.  The South African economy is stuttering right now because even the fossil fuel supply is intermittent.  Try to imagine what life would be like if the most of our power stopped the moment the sun went down.  Yes, we as individuals could probably cope with gas cooking and paraffin lamps or candles. However, most of the energy we generate does not go to individuals, but to keeping our developed economy going.  Less than 100 organisations in South Africa use about two-thirds of all the energy we produce.  Modern economies demand energy to generate wealth, and that energy needs to be available every hour of every day.  An intermittent supply is better than nothing, but much worse than a continuous supply.

Indeed, we can measure the cost of not having energy, and compare it to the cost of generation.  The loss of power early in 2008 hit the South African economy with about R75 for every kilowatt-hour that was lost.  Compare that to the approximately R0.60 that Eskom spends at present to produce a kilowatt-hour. It is infinitely better to have too much power than too little.

Of course, we need sustainable development. But there is no point in committing economic suicide in an attempt to sustain ourselves, as Le Page would have us do. According to the Brundlandt definition, “Sustainable development is development that meets the needs of the present without compromising the ability of future generations to meet their own needs.” Yes, we have to worry about future generations, but we also have to do so without compromising our ability to meet our own needs.  My generation coped with the previous generation’s love affair with the Mutually Assured Destruction of nuclear weapons.  I have every confidence that my children will cope with the far lesser threats of climate change in ways that will amaze us.

A carbon tax in South Africa?

Last year, Treasury issued a discussion paper on a possible carbon tax. It concluded that a tax of R75 per ton of CO2, with an increase to about R200 per ton CO2 (at 2005 prices) would be both “feasible and appropriate.” As a coal-fired power station emits about 1kg CO₂ per kWh, the carbon tax would add between 15 and 40% to the present cost of electricity. Is such an increase merited?

Treasury’s discussion paper starts by reviewing the effects of climate change. It gets the effects wrong, and always in the wrong direction. For instance, Treasury claims “Average temperatures have increased over the past 50 years at a rate of 0.2°C per decade, largely as a result of human activity.” The HADCRUT official data, variance adjusted, gives 0.13°C per decade for 1960-2010.

Similarly, Treasury believes “the atmospheric concentration of these gases could reach 550ppm of carbon dioxide equivalent (CO₂e) by as early as 2035, committing the earth to an average temperature increase of about 2-5°C.” The IPCC, which is nothing if not conservative about these matters, says that with a very gloomy view of the world (its A2 scenario), it expects an average temperature increase of about 2-5°C about 2095, not 2035! Less gloomy IPCC scenarios give 1.8-2.8°C about 2095.

Likewise, Treasury claims “Warming is expected to increase mosquito prevalence, with a concomitant rise in malaria.” The IPCC says “Climate change is expected to have some mixed effects, such as a decrease or increase in the range and transmission potential of malaria in Africa.” This is IPCC-speak for “We don’t know!”

Why was it necessary for Treasury to overstate the case in this way? Did it honestly believe we should be scared into accepting its new tax? A guide to the true impacts of climate change is the last century. There was detectable global warming, but the impacts can barely be seen. We live in a water-stressed country. Yet our own Weather Service reports “Higher temperatures will influence the rainfall, but it is still uncertain how the annual rainfall will change. It could increase in some parts of the country, and decrease in other parts.” The IPCC couldn’t have put it better!

Treasury’s Paper then considers the rationale for a tax. “Command and control regulations and market based instruments are used to control pollution.” Is carbon dioxide a pollutant? A dictionary definition of pollution is “The contamination of air, water, or soil by substances that are harmful to living organisms.” Carbon dioxide is not harmful to living organisms. To the contrary, it is the very basis of life.

The Paper then argues “Climate change and its effects are the result of GHG emissions, which are not paid for by the emitters.” That may be so, but many costs are born by society as a whole. Society can agree to build a bridge to cross a river. The costs may born by society, or the bridge may be tolled and paid for by users. The implicit assumption in the Paper is that ‘tolling’ is the only solution.

The Paper lists some issues underlying the design of a carbon tax. The first of these is “Environmental effectiveness – The ability of the tax to reduce GHG emissions.” Suddenly the rationale has moved from concern about the external costs associated with emissions to the emissions themselves.

It is futile to worry about South Africa’s emissions alone. Climate change is a global problem. Each year, South Africa emits about 125 million tons of carbon. China’s emissions are growing by an additional 200 million tons of carbon each year. South Africa could cut its emissions to nil, and the effects of climate change would still be there.

Until there is agreement on a global solution there is no purpose in placing additional imposts on our economy. A carbon tax would be a cost with no detectable benefit.

The only countries to have imposed carbon taxes are in the European Union. There is also a Canadian province, British Columbia. No developing nation has seen any merit in the idea.

This is not altogether surprising. Development demands ever more energy. There is a direct relationship between energy consumption and GDP. Over 80% of the world’s energy is derived from fossil fuels. The International Energy Agency predicts this may fall to slightly less than 80% by 2035. However, ongoing economic growth will see a 30% increase in greenhouse gas emissions by then.

Why should we slavishly follow the Europeans? There is absolutely no basis for a carbon tax in South Africa.