South Africa emerged as the second worst performer of the G20 non-Organisation for Economic Cooperation and Development (non-OECD) member countries, according to a November 10 report, titled 'Doubling Back and Doubling Down: G20 Scorecard on Fossil Fuel Funding'.
The report ranks countries according to seven indicators – transparency, pledges, public money for coal, oil and gas, fossil-fuel-based power (both production and consumption), as well as how support has changed over time.
The report highlights global fossil fuel subsidies and is compiled by independent think tanks the International Institute for Sustainable Development (IISD) and the Overseas Development Institute (ODI), as well as research, communications, and advocacy organization Oil Change International (OCI).
South Africa was highlighted as a heavy user of fossil fuels in the report as a result of its lack of transparency and continued support for coal production, fossil-fuel-based power generation and general consumption of fossil fuels.
The report finds that the South African government spends more than R93-billion a year on direct support for fossil fuel use through subsidies to its predominantly coal-based electricity system.
In addition, the report also suggests that a lack of transparency around other “hidden forms” of price support to fossil fuels and bailouts to State power utility Eskom means that this figure is likely to be higher.
The report’s lead author Anna Geddes says South Africa’s poor performance compared with G20 members and emerging market peers is a result of a lack of transparency around fossil fuel subsidies.
“The South African government fails to regularly report and quantify various forms of state support for heavy fossil fuel users such as Eskom and Sasol.”
“South Africa has committed to reduced reliance on fossil fuels, yet we have seen a 14% increase in total government support for fossil fuels over the last three years. This is predominantly due to a 79% increase in price support for fossil-fuel-based power,” she says.
In the report, researchers raised “particular concern” over the South African government’s continued spending to pipe precious water from drought-prone areas to coal-fired power plants.
“More than R1-billion in government funding has been made available for water transportation projects to supply water to coal power plants in Limpopo,” says Geddes.
“This includes the Matimba and Medupi power stations near Lephalale and the water-intensive Grootegeluk coal mine.”
Global think tank E3G senior associate Jesse Burton says South Africa urgently needs to build out new renewable energy to ensure sustainable development and address the energy security crisis and start its just transition.