South African Energy Policy FES Briefing Paper 11| August 2007 Page 6 This is accorded a high priority in South African policy firstly, because climate change will have 12 large serious(devastating) negative effects on South Africa so both mitigation and adaptation are important and secondly, because South Afri­ca is a developing country and sustainable deve­lopment has to be central. It is also a high priori­ty because mitigation measures will have poten­tially large costs for the South African economy and thus have to be implemented appropriately to avoid severe economic damage. Potential Conflict with Petersburg Declaration South African energy policy is supportive of mi­tigation measures. Existing patterns of energy production and use in South Africa are associa­ted with high levels of GHG emissions largely owing to two factors. Firstly South Africa’s ener­gy sector is based on fossil fuels and to date the­re has been negligible implementation of measu­res to use technologies to reduce GHG emissions associated with these fuels, such as carbon cap­ture. Secondly, the production, transformation and use of these fuels is often very inefficient. In most cases where fossil fuels are used in South Africa, if(dis)-incentives are not applied, on­going use of fossil fuels is the most economic so­lution: i.e. most electricity demand is, and will be for decades to come, be most economically ge­nerated using locally produced coal and swit­ching to other sources will carry huge economic cost, and thus, unless done in an appropriate manner, could be in conflict with important South African interests: important industry sec­tors could be made non-profitable and increases in prices of goods and services could lead to se­vere economic damage. Climate change mitigation through substitution of fossil fuels or through decreasing emissions through other measures(sequestration…) is not incompatible with South African energy policy in principle: South African energy policy recognizes the need and supports the principle. However, it will need to be implemented taking existing energy resource, production, transformation and usage patterns into account. Conditions/ incentives for SA entering interna­tional regime consistent with G8 policy In 1997 South Africa ratified the UNFCCC and the Petersburg Declaration confirms commit­ment to the UNFCCC and thus South Africa is al­ready subscribed to and participates fully in an appropriate international regime. 12 Indications are that this process is already under­way. Implementation has already been thoroughly in­vestigated and much work is underway 13 . The following selected points from the National Cli­mate Change Response Strategy report illustrate some of planning and principles contained in the strategy: “ An effective programme for climate change response will require that South Africa has access to public sector funding and funding from government related institutions, such as the Development Bank of South Africa. Further, as a developing country, South Africa can access assistance from developed country partners to meet its obligations under the convention and, further, participate in the global mitigation of climate change. This requires a framework to access and manage the climate change financial resources on offer as donor funding …” Through the implementation of this national climate change response programme, South Af­rica will avail itself of the potential advantages that could stem from international action on climate change, whilst at the same time minimi­sing its vulnerability to such events. To achieve this end, priority will be given to the following key interventions, although others appear in the key actions list in this document: a) Rapidly develop the DNA function within the Department of Minerals and Energy to facilitate the forwarding of CDM project proposals to the Executive Board for approval without undue de­lay. b) Perform a technology needs analysis for South Africa that builds on and integrates existing knowledge, through the Department of Science and Technology. c) Access appropriate funds, as feasible, for im­plementation of the climate change programme, in particular for adaptation purposes. ” 3. Increasing transparency, predictability and stability of global energy markets This is accorded higher than average priority as far as stability and predictability are concerned because of the effects of crude-oil price volatility on the local economy and potential negative ef­fects on the economy of disruptions in supply of crude-oil from international markets. 13 A National Climate Change Response Strategy for South Africa. South African Department Of Envi­ronmental Affairs And Tourism. September 2004.