Growth vs. Emissions

An op-ed in today's Washington Post raised some thought-provoking questions about the difficulties faced by developing countries seeking to meet the energy needs of their citizens while minimizing their contribution to increasing global emissions of greenhouse gases. The problem is even trickier for South Africa, which is rich in coal--the literal bête noir of anthropogenic climate change--and relied on by neighboring countries for their electricity supplies. In the op-ed South Africa's Finance Minister, Mr. Pravin Gordhan, pleads for greater understanding of his country's situation by the World Bank and other international lenders that prefer to fund renewable energy projects and regard additional coal power capacity as counterproductive. This dilemma is central to the challenge of reducing global emissions of CO2 and other GHGs without penalizing the growth necessary to lift billions of people from poverty--or pushing others elsewhere back into it.

South Africa needs more generating capacity because its national utility Eskom has struggled to keep up with growing demand for power. There are many reasons for this, including social acceptance of electricity theft by those unable to pay for it, but mainly because until the recession the country's economy was growing at a growth rate of over 5% in real GDP. This has led to chronic blackouts and constraints on some of South Africa's key industrial sectors. The need for more capacity is thus urgent, so timing matters. Although the country currently gets about 5% of its electricity from nuclear power plants, new nukes couldn't be built fast enough to avoid years of tight power supplies. And if your grid is already unstable, adding lots of intermittent or cyclical wind and solar power isn't going to help much, without also adding expensive grid management and power storage technology.

Another aspect of the problem is financial. Even if renewables were economically attractive compared with building more coal-fired capacity--they are not without subsidies on a scale that countries like South Africa can't usually afford--much of their economic benefit comes from the trade-off between high up-front equipment costs and very low operating costs with no direct fuel expense. That's great if you have an indigenous renewable energy manufacturing base or a large, diverse economy that can easily absorb the cost of importing such equipment from other countries. However, if you don't fall into either category and the fuel being saved happens to be one of your most productive resources, this trade-off isn't very compelling. Not only does coal generate most of South Africa's power today, but it is also a major source of transportation fuels from the giant coal-to-liquids plant at Secunda. As a result, South Africa ranks ahead of France and Australia in total CO2 emissions.

According to Mr. Gordhan, South Africa wants to invest in renewables and play a constructive role in managing global emissions, but it also has an obligation to meet the energy needs of its and its inter-connected neighbors' population, for many of whom this translates into basic necessities. Without significant international energy assistance and investment, the priorities for such countries must put current needs ahead of future risks. Yet the provision of such assistance is fraught with other risks, and it cannot be extracted through the assessment of blame for historical emissions that occurred long before the current consensus on human-induced climate change coalesced. I don't see any easy answers to this, short of a cheap way to capture and sequester CO2 from coal-fired power plants, which is the subject of much research and not a little controversy.