It’s difficult to directly link extreme weather events such as the Cape storm and Knysna fires to climate change. The causality of such events is always complex.
But an increase in extreme weather events like these are very much what has been predicted by scientists studying climate change. Climate change “loads the dice” in favour of such events, which in Knysna caused seven deaths, left 4,000 people homeless and forced the evacuation of another 10,000.
Human-induced climate change is largely caused by the global warming effect of carbon dioxide emissions, most of which come from burning oil, gas and coal: fossil fuels.
SA is more vulnerable to climate change than many countries, with its average temperatures having increased by at least 1.5 times more than the observed global average (0.65°C) over the past 50 years. In the face of this emergency, you would think SA would be taking a leadership role in combating climate change. But it does not.
The Climate Action Tracker groups countries into four categories according to the gaps between stated collective commitments to the ambition established at the Paris climate talks — to hold average global warming “well below” 2°C — and their actual individual commitments.
SA’s nationally determined contribution is in the lowest category: inadequate. If the whole world behaves as poorly as SA, the global temperature increase will exceed 4°C in this century and global civilisation will, by most scientific assessments, most likely end, crushed by multiple stresses — drought, heat stress, extreme weather, ocean acidification, biodiversity loss — on infrastructure, food production and human health.
Economists gloss over this terrifying scenario with the dry language of massive “damage to GDP”, but that doesn’t capture what Robert Pindyck of the Massachusetts Institute of Technology describes as “the possibility of a catastrophic climate outcome”.
Most people in SA believe that because they do not live close to sea level or are desert-bound nomads, they will be immune to the worst effects of climate change. They may be, for a while, if they can close their ears to the cries of people outside the gates as they pile their children into an oversized 4×4.
Being a developing country is no excuse for SA’s lack of ambition. As Eskom makes itself an abuser by holding the renewable energy programme hostage, 48 developing countries have committed to 100% renewable targets; and all those with climate commitments ranked as “sufficient” are developing countries.
China, India and Brazil are far more ambitious than SA, where people persist in the delusion that fossil fuels are needed for development. There are relatively few stable jobs in the coal industry, many are dirty and dangerous, and a small levy on renewable energy could ease a “just transition”. Using fossil fuels for development is rather like burning down the house to stay warm. Their promotion in government policy is now a matter of state capture, not the rational pursuit of the best interests of all the people.
Eskom should be dedicated to getting low-cost clean energy to all, but it is now run as a source of subsidy for greedy coal interests at great direct and indirect cost to citizens. UK consumer energy prices are falling as fossil fuels are phased out; SA’s continue to mount.
Most of SA’s contribution to escalating climate change comes from Eskom, Sasol, and the rest of the coal industry: companies such as Anglo Coal, Exxaro, BHP Billiton and Xstrata, cynically funded by big banks that purport to be concerned over climate change. Globally, companies such as Shell, BP and Exxon Mobil still work to block the development of cleaner energy. Even economics textbooks now state proper climate policies are blocked by the natural resource industries.
For a secure future, people should stop investing in these companies, and invest where possible in cleaner energy.
Critics argue that divestment transfers ownership to less scrupulous investors, but it also helps to avert fossil fuel energy development, raise the cost of capital and end social consent to the fossil fuel corporate sector.
Around the world, hundreds of institutions now worth more than $5-trillion, led by universities but including cities such as Paris, Melbourne, Oslo and Copenhagen and a country, Ireland – are stopping their investments in fossil fuels.
In May, Fossil Free SA convened a workshop for financial services professionals in Cape Town on divestment, part sponsored by Futuregrowth Asset Management. It was aimed at building understanding of climate and carbon risk — and the divest-reinvest movement – among financial services professionals and to catalyse the creation of divested funds and instruments (jury still out). Representatives of 15 financial services companies attended.
Tracey Davies of the Centre for Environmental Rights spoke on the implications of the landmark high court finding that the minister of environmental affairs should have considered the climate change effects of the proposed Thabametsi power station before authorising it.
Paul Chandler of the UN-supported Principles for Responsible Investment outlined the proposals of the G-20-appointed task force on climate-related financial disclosure, which produced recommendations that all significant corporate emitters should be reporting on their exposure to climate and carbon risk.
There are few reasons to fear that divested funds will lose value. During the divestment workshop, Sam Gill of ET Index Research in London described how to “cut carbon, beat the market”. ETI’s analysis shows that a JSE SWIX index-based portfolio would have performed substantially better over the past four years if strongly divested.
Some argue that this was a transitory arbitrage opportunity, but there are good reasons to doubt the future of fossil-fuel companies. The share of the sector in the S&P500, for example, has declined from 25% to 6.9% since 1980. Globally, according to MSCI research, investors would have been better off without fossil fuels in their portfolios since 2007.
SA’s philanthropists, too, should give serious thought to how they invest: there’s little point in funding education or health when it is done with investments that effectively steal from the future in which our children must live and work.
South African philanthropies probably command endowments well in excess of R15bn, according to research by GastrowBloch Philanthropies. Yet they have, with the exception of the Desmond and Leah Tutu Legacy Foundation, made little progress towards aligning investments with values.
There’s more to the evils — and immense costs — of fossil fuels than climate change. But besides resource wars and economic instability, University of Cape Town research indicates that more than 27,000 South Africans are killed yearly by air pollution every year. And the industry is extremely corrupt: in SA, deeply linked to those overseeing a “silent coup”.
The academic authors of the Betrayal of the Promise report argue that “Eskom and Transnet, in turn, are the primary vehicles for managing state capture, large-scale looting of state resources and … a continuous source of self-enrichment and funding for the power elite and their patronage network”.
No one who loves SA should be invested in fossil fuels.
Fund managers say there is not yet any visible local demand for divested funds and this is true. But divestment is the right thing to do and, given the accelerating renewable energy revolution and regulation of greenhouse gases, the smart thing to do. Sing it to the heavens, before they overheat.
It’s time to tell your financial services provider and company pension fund trustees you no longer want to be invested in destroying your future.
• Le Page is the co-ordinator of Fossil Free SA.