Minister Dipuo Peters,
Ministerial colleagues from across Africa,
Colleagues from Brazil, China, India, Norway, and the Netherlands,
Representatives from the African Union, UNIDO, the World Bank,
Cabinet colleagues,
Distinguished guests,
Colleagues and friends.
It is my pleasure to welcome you on behalf of the Government of South Africa to the Africa Ministerial Roundtable in the lead up to COP17 in Durban in November 2011.
Your meeting takes place eight weeks prior to the convening of COP 17 here in South Africa where countries will reflect on the challenges of climate change but you also meet at a time of global economic uncertainty, following the recession of 2008 in the northern, industrialised economies.
More than 150 years of industrialisation that started in Europe, based mainly on fossil-driven energy, has impacted on the climate and environment in very profound ways, with potentially devastating effects for future generations.
Decades of fast economic growth in some parts of the world have now stalled, with major fiscal, jobs and growth challenges in many developed economies and continuing systemic weaknesses in the global economy that questions the old models of growth.
The world clearly need a new growth path that is both economically and environmentally more sustainable.
As we review this century and a half of industrialisation in the north from our vantage point on the continent, it is obvious that Africa had not done particularly well. It was a period when most of the continent was under colonial rule, providing minerals to other parts of the world with very little local industrialisation, leaving in its wake today large levels of rural poverty and underdevelopment, weak infrastructure and limited education.
From that point, Africa too, needs a new growth path.
Over the past decade however, the continent has begun to address some of the key challenges. Democratic governance has become more widespread. Economies have grown, in many cases, quite robustly. Indeed, six of the ten fastest growing economies in the world in the past decade are from this continent. And IMF projections show that seven of the fastest growing economies for the next five years are expected to be African economies.
Colleagues and friends
The continent has the potential for a dramatic turnaround from decades of pessimism about our future and our prospects.
A recent study predicted that Africa's GDP will grow by $1 trillion by 2020, driven largely by the expansion of infrastructure, agriculture and resources but also through growth in consumer markets.
In all, consumer spending is projected to rise from $860 billion to $1,4 trillion by 2020, a rise of some $540 annual billion. In our local currency, that is almost R4 000 billion - which is bigger than the South African Gross Domestic Product. In other words, just the increase in consumer spending alone on the continent by 2020 compared to 2008, will be more than the entire total output of Africa's largest economy today.
What is the relevance of this for a Conference of African Energy Ministers? My dear colleagues, everything! For Africa to achieve these enormous growth rates and to sustain them, we will require significant investment in infrastructure.
Indeed, current estimates suggest that we will need to invest about $200 billion a year by 2020 to put in place the roads, rail, dams, energy generating capacity and communication systems to drive growth, jobs and development.
But if we wish to absorb into decent work opportunities, the hundreds of millions of the rural poor who will be moving to cities and young people who will enter the labour market, we will need to become more than simply a mining and agricultural economy.
Africa will have to industrialise, to build dynamic and strong manufacturing industries, supported by sophisticated services sectors.
And crucial to every significant episode of industrialisation across the world has been energy: expanding the levels of energy generated, reducing the price of energy or creating or tapping new sources of energy.
Herein lies a challenge and dilemma but also an opportunity.
The challenge is: do we simply follow the carbon-intensive industrialisation path of Europe and the United States for the last 150 years, or Asia over the past 30 years? If we do, we will burn an enormous amount of fossils and based on current emissions, we will contribute to the substantial harm to the environment.
And based on the scientific evidence before us, we and our children and their children will pay a very high price.
So we are faced with the challenge to industrialise, but under conditions in which we need to balance growth with sustainability.
The enormous advances in technology allow us today, as you so well know, to tap the power of the sun, the wind and the rivers to create energy that is clean and green.
In the process, we can create large numbers of jobs.
Opportunities arise in many areas, ranging from development of new energy-efficient materials, to large solar, hydro and wind energy plants, to green manufacturing operations including of car manufacturing, to production of green household utensils such as cooking stoves and lighting and heating systems, to eco-tourism, environmental reclamation projects and waste-management.
In South Africa, we are now identifying these opportunities and marshalling the investment to capture our share of green jobs. It is part of our integrated jobs plan which we call our New Growth Path, a programme that seeks to place employment at the centre of our economic policies, expand our industrial sectors, develop the green economy and promote rural development.
Led by my colleague Minister of Energy, Dipuo Peters, we have announced a target that more than one third of new energy should be from renewable sources, with more than 15 000 MW of green energy. That is an important target, bigger than the total generation of energy from many countries in the world.
We are introducing a subsidy to incentivise the generation of renewable energy, by paying power producers more than it would cost to produce the equivalent levels of energy through existing coal-based energy.
We have set up a $3 billion fund through a public investment corporation, the IDC, to co-finance industrial activities in the green economy. South Africa currently produces about 15% of the world’s auto-catalytic converters, which help to reduce carbon-emissions from fuel-based vehicles, using a locally-mined platinum input. We have developed an electric motor vehicle to prototype stage, using local technologies and know-how. We need to build more and better green industrial products like these on the continent.
We have installed 140 000 solar-water heating units locally to provide hot water to households, largely poor families, using a portion of the coal-based electricity tariff to co-finance this together with money generated from carbon-credits. Our goal is to increase this to one million units by 2015 and to manufacture more of the components locally.
We are looking at a range of energy-efficient solutions, to reduce carbon demand: from retro- fitting of public and commercial buildings, to energy-saving technologies in industry.
We are investigating a new standard for the fuel used in vehicles on our roads, to mandate a blend of renewable and fossil-based fuels, recognising that the feedstock that is required to produce the renewable fuel can create tens of thousands of jobs in the agricultural sector.
Indeed, colleagues, our research show that the green economy can create some 300 000 jobs in South Africa alone by 2020. In addition to these efforts, we recognise that social organisation choices can help to change the patterns of energy demand. Let me use the example of transport. Investments in mass public transport systems that reduced reliance on car ownership and use, are not only valuable for economic performance, but can contribute greatly to reduction in carbon-emissions. We have invested now in improvement in inner-city mass transport and will accelerate these in the years ahead.
The shift to rail-transport for the movement of goods is both cheaper for bulk transport and is significantly more environmentally positive compared to road transport.
These examples all illustrate that there is much that governments can do, but we also need to tap into the resources of the private sector, a key driver of investment and entrepreneurship in the green economy.
The opportunities to bring new players into the economy, to promote small businesses and cooperatives, to provide economic opportunity in rural areas, have to be seized. We are exploring a social pact on the green economy in South Africa with organised business, the labour movement, community formations and government, that will cover amongst others skills transfers, small business development, youth employment and financing mechanisms.
Creating this green economy will require effort, resources and political will.
It can best be pursued across the continent, as a collaborative project between countries that can promote economic development, strengthen economic ties and deepen the continent’s industrial capacity. The size of the African market – one billion consumers - can provide the critical mass, the economies of scale, for commercially viable production.
The rest of the world can help us, not as an act of charity but on the recognition that, based on today’s technologies, a green-led industrialisation will cost more in the short-term than a coal-based growth model; that a continent with big development deficits cannot be expected to pay the price for the unsustainable practices over the past 150 years in today’s developed economies; that Africa currently emits substantially less carbons per capita than most parts of the world and that this continent therefore helps to bring down the average per capita emissions globally. The help we need include funding and technology transfers on the scale that will help to drive a major wave of green industrialisation on the continent. That is the challenge we put to our friends and global partners.
But much as we look forward to constructive partnerships from the rest of the world, we can and should also do more as a continent, ensuring an African contribution to greening our economies.
There are big opportunities that lie within our power. Some of these opportunities are in energy generation.
The Congo River and particularly its Inga Falls, is potentially a source of enormous green, renewable energy, produced at a cost that is lower than competing technologies. Indeed, the potential of the Grand Inga project is vast – it is projected to be able to generate close the entire existing energy generated in South Africa. If we can tap the power of that river – and the challenges are not engineering or financial – then we can create a cheap and clean source of energy that can drive economic growth and industrialisation in a number of countries in the region.
It will require cooperation within the region to realise the goal.
It raises also an important project: connecting our power grids more effectively and developing common power pools. There are opportunities in clean-coal technologies.
We must recognise that while we focus on green energy, we have significant deposits of coal, oil and gas on the continent.
One of the challenges is to reduce the carbon footprint of coal, through a range of technological solutions, including carbon capture and storage and more efficient coal-power technologies. South Africa is currently running a pilot project using underground coal gasification technologies to co-fire a coal power station in one of our provinces. We can combine fossil- fuels and bio-fuels and invest in technologies that reduce carbon emissions from traditional energy sources found in abundance on the continent.
Africa cannot walk away from coal as a cheap source of energy, but we can ensure that we invest and partner in green energy to mitigate the effects of coal and that we adapt technologies to reduce the carbon impact of coal. This same principle applies to oil and of course we need to look at greater use of the enormous gas reserves on the continent.
At the micro level there are also many opportunities to contribute positively to both economic development and sustainable practices.
These include the manufacture of the green industrial and green household goods.
The Seminar and the products at the Expo today is an example of the application of human ingenuity to the challenges of climate change.
There are a number of reasons why we should promote and pioneer the technologies for green household energy, aside from their obvious climate-change benefits. These technologies can help to provide lighting, hot water and cooking heat on scale to poor households and rural families who currently use unsafe, expensive alternatives.
On our continent, the default option of energy for hundreds of millions of people is not electricity accessed with the flick of a switch, but instead energy from wood, charcoal and coal, as well as paraffin and gas.
The evidence is compelling that smoke from solid-fuel use by poor households contribute to large numbers of deaths from child pneumonia, chronic obstructive pulmonary disease and lung cancer. Indeed, a UNDP/WHO study estimates that about half a million people die annually on the continent as a result of indoor air pollution that arise from solid fuel use.
Millions of women are still trapped in activities around the collection of firewood as a source of fuel and the use of green technologies can lighten the burden in many rural and peri-urban areas, releasing women from this drudgery.
The use of firewood for cooking and heating can contribute to deforestation and soil erosion, which is not only bad for the environment but also contributes to creating conditions that deepen poverty.
Charcoal and wood is in many cases more expensive than other sources of energy in spite of the lower start-up costs.
The use of open fire cooking or three stone stoves are energy inefficient – with a large part of the heat escaping.
It is also, as we have seen with our own Solar Water Geyser projects, a concrete way of building a mass constituency for the goal of sustainable environmental policies. For citizens of our nations, the green economy must bring tangible benefits in improving their lives, their health, the welfare of their families.
For all these reasons and more, the switch to green technologies can have very substantial economic development, health and welfare benefits in the lives of families and communities.
In order to fully reap the dividends of these technologies however, Africa should not only consume these, but also need to produce these locally and on scale, creating manufacturing enterprises that produce for the large market on the continent.
This is vital if we are to realise the green jobs dividend from our investment in renewable energy and the consumption of green household utensils and equipment, but we should also use it to build the platform for a viable export industry to provide manufactured green goods outside the continent to markets in Asia, Latin America, Europe and the United States.
This requires both investment in research and in modern manufacturing operations. One of our universities in Johannesburg for example has established a Sustainable Energy Technology and Research Centre testing laboratory and workshop. At the laboratory facility, sustainable energy technologies, beginning with basic household stoves, are identified, scientifically assessed, tested, re-designed, optimised, and prepared for commercialisation. The Centre has established air emission testing protocols to be applied throughout the SADC region and is building a comprehensive database on bio-fuel stove emissions in the region.
The new generation of clean lighting and cooking products, some of which I understand will be displayed at the Expo, the success stories presented by African entrepreneurs, and the new opportunities to mobilise climate funds for household energy, can be the key driving forces that finally can allow us to bring modern energy services to everyone on the continent – and make kerosene lamps and three stone stoves obsolete items to be only found in museums.
I am therefore delighted that the Green Household Energy Solutions event will focus on these aspects. The green household energy event will show that by leveraging new global technologies, African entrepreneurial spirit and emerging partnerships, it is possible to bring clean and affordable lighting and cooking solutions to all Africans, while also creating jobs and development on the ground, particularly in rural areas.
The global focus on climate change can also be one of the game-changers for household energy. There are already an impressive number of clean cooking projects that were able to mobilise Clean Development Mechanism revenues, although the process is still complex and slow.
The new round of climate negotiations also opens an opportunity to leverage better climate financing for household energy needs, and we need to move with speed to identify opportunities that use climate funds to directly benefit African households and create green jobs on the ground.
I hope that the Conference has helped to share country perspectives and build consensus on a roadmap towards sustainable energy that will define Africa’s growth and energy development agenda for Durban and beyond. We look forward to the adoption of a final African Energy Ministers’ Declaration for COP17. A central component will be understanding how we can marshal resources to make clean, healthy homes, create green jobs and ensure local business generation as a lasting legacy for our people on the African Continent.
The South African Government is ready to take on the defining challenge of green industrialisation in the years ahead, to balance the needs of today with the needs of tomorrow, and to find economic and employment opportunities in that balance. We are ready to partner with colleagues in the rest of the continent in this vital venture.
Keynote Address by Minister Ebrahim Patel, Minister of Economic Development at the Africa Energy Ministers Conference “On the Road to Durban: Promoting Sustainable Energy Access in Africa”, Sandton, Gauteng
