Business Day: ‘Signs are the climate is right for divesting from the fossil fuel industry’

Published in Business Day on 19 July 2017, for Fossil Free South Africa

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

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.

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Business Day: ‘The value of an endlessly expanding GDP is doubtful’

Published in Business Day, 24 April 2014

THE speed at which a country’s gross domestic product (GDP) is growing has for the past 60-70 years come to be considered the most important measure of whether a country is succeeding or failing. But what if our most cherished notions about what makes a nation successful are wrong? What if economists who lead the obsession with this metric are, in fact, charlatans?

There have been some very prominent critics of our obsession with GDP growth.

In 1968, Robert Kennedy noted that GDP includes the costs of air pollution, road accidents, managing crime, militarism and environmental destruction, but does not include the “decency of our factories and the safety of our streets alike … the beauty of our poetry, or the strength of our marriages, the intelligence of our public debate or the integrity of our public officials”. He concluded that GDP “measures everything, in short, except that which makes life worthwhile”.

Former French president Nicolas Sarkozy pointed out in 2009 how GDP figures have come to be widely misused: “GDP statistics … are increasingly thought of as a measure of societal wellbeing, which they are not.” Continue reading Business Day: ‘The value of an endlessly expanding GDP is doubtful’

‘Denialists’ disdain for science is a vital human rights issue’

ClimateChangeDisinformationPipelinePublished in Business Day, 14 January 2014

The public debate about climate change is an aberration because we do not have debates in newspapers about the validity of medical science, physics, aeronautics, geology or genetics. So what is different about climate science?

Two things, perhaps: its conclusions demand that most of us make significant adjustments to our lifestyles, and it threatens major vested interests: the fossil fuel industry that supplies the world’s coal, gas and oil.

But, like the tobacco industry before it, the fossil fuel industry has funded a vast campaign of lies and disinformation to undermine public trust in science. To understand the so-called climate debate, one must understand this context, rarely if ever acknowledged in South Africa. A debate fuelled mostly by propaganda is not a real debate.

As Jeremy Grantham, a leading US fund manager, observes: “We have the energy industry — the only other vested interest as powerful as that of the financial world — egging people on to be confused about the issues. They do it very successfully, with foundations with misleading names, think-tanks like the Cato Institute and the Hudson Institute, whose job in life appears to be propagandise anything and everything that is useful for energy interests.”

Continue reading ‘Denialists’ disdain for science is a vital human rights issue’

‘New alerts highlight need for urgent climate change action’

Climate negotiators huddle during the closing hours of the COP17 UN climate conference in Durban, 2011. Pic: David Le Page
Climate negotiators huddle during the closing hours of the COP17 UN climate conference in Durban, 2011. Pic: David Le Page

Published in Business Day, 19 September 2013

PERHAPS, one day, an article on climate change will be written that tells us that things are getting better. Sadly, this is not that article and that day, if it ever comes, is a long way in the future. Though climate change has largely disappeared from the public agenda in South Africa since the 17th session of the Conference of the Parties (COP-17) to the United Nations Framework Convention on Climate Change in Durban in December 2011, the problem itself remains stubbornly immune to fluctuations in media attention.

Two recent climate-change updates from the World Bank and International Energy Agency have restated the scale and dangers of the problem. The reports should make anyone younger than 50 worry about the future, because, on present emissions trends, significant effects are predicted in just the next 30 years. Some of the worst effects will hit sub-Saharan Africa.

There are a few points to bear in mind when either contemplating or skipping in dread past the predictions. First, global carbon emissions are still growing and show no sign of slowing down. Continue reading ‘New alerts highlight need for urgent climate change action’

‘SA must build economic democracy’

Published in the Mail & Guardian, 21 June 2013

This is not Constantia.Twenty years after this country chose to end relentless violence and injustice by introducing political democracy, our rightwing government is ready to roll out the troops and subdue mineworkers by force of arms. But the only lasting remedy for the discontent on the mines is to make South Africa an economic democracy.

Currently, South Africa is being crushed by economic totalitarianism. Few of us realise this, and few of us know that there are alternatives, many of them up and running in other countries.

Economic democracy is about ensuring that everyone in society, not just the elites, has a meaningful share in the wealth of the country, and a voice in deciding how that wealth is shared. It’s a term that has emerged from nearly two centuries of worker mobilisation in Europe, the United States and Latin America.

It’s particularly necessary in South Africa because of our history of colonialism and apartheid. To paraphrase Walter Rodney, most South Africans are not underdeveloped, they have been underdeveloped. This means that real development will be impossible so long as the institutions responsible for underdevelopment persist. Continue reading ‘SA must build economic democracy’

Fix inequality with a maximum wage

'Toilets, washbasins and geysers last maintained by apartheid.' Protester in Durban, December 2011. Pic copyright David Le Page.
‘Toilets, washbasins and geysers last maintained by apartheid.’ Protester in Durban, December 2011. ©David Le Page.

Published 18 November 2012 by the Sunday Times (in print, but not online)

Since the tragic massacre at Marikana, there’s been increasing discussion of the problem of South Africa’s terrifying inequality. But commentators and government representatives get rather shy when it comes to talking about real solutions. They take refuge in calls for ‘solidarity’, ‘symbolic steps’, ‘dialogue’ and, as ever, ‘poverty reduction’.

These calls are at best timid and ignorant of the real nature of inequality, and at worst, evasive.

Eight thousand kilometres from Nkandla, the Uruguayan president, Jose Mujica, eschews his official residence for his wife’s shabby old farmhouse, and gives a large portion of his salary to the poor. That’s real solidarity.

But since we’re not yet seeing that kind of solidarity here, let’s talk frankly about two things: Firstly, the ways in which the very existence of excessive wealth actually creates poverty, and secondly, what some real solutions might look like.
Continue reading Fix inequality with a maximum wage

Business Day: ‘South Africa needs a business alliance to protect biodiversity’

Published in Business Day, 19 November 2012
THE other day, I spotted a small flurry of activity just outside my front door. A gecko had died and its body was covered in black ants. Within days, the ants reduced it to a shell of crumbling skin.

The world is full of beings and processes that support us in ways we take for granted, just as some take for granted their domestic workers. Yet this symphony of all life on Earth, “biodiversity”, is profoundly threatened. The word is almost designed to sound inconsequential. Yet biodiversity is the sum and wonder of all species on Earth — perhaps all species in the universe.

Last month, the Convention on Biological Diversity met in India. The world barely noticed, which is amazing compared with the attention given to climate change, because the biodiversity crisis is more advanced than the climate crisis.

Consider all we take for granted: every dead creature is returned to the greater ecology by other creatures; plants and plankton make every breath of oxygen. Continue reading Business Day: ‘South Africa needs a business alliance to protect biodiversity’