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Bear with me while I briefly fill in the background. At the start of my term as chairman of the SA Institute of Consuling Engineers (SAICE) Water Division someone raised the question at the April 2008 SAICE Council, “Are we facing a water crisis similar to the energy crisis?” Of course each of us were aware of problems in our own fields. But when my committee and I started investigating and putting the pieces together, the picture that emerged was alarming. A crisis committee of top experts was identified and convened, that includes, amongst others, two past presidents of SAICE, the then sitting and two previous presidents of Water Institute of South Africa (WISA), a former director general of the Department of water affairs (DWA) and a representative of the Development Bank of South Africa (DBSA). Expertise was drawn from the top echelons of management, water resources, water quality, municipal services, research, economics capacity building and academic fields. It is noteworthy that without exception every one of the carefully identified and extremely busy individuals recognised the need and joined the group without hesitation, and all continue to provide enthusiastic support. The first product of this group was a submission to the portfolio committee of Water Affairs and Forestry on 22 October 2008. The upshot was the pairing of the two words “water” and “crisis”, which have since become common coinage.
By now you are probably well aware of the key crises facing the water sector, and will readily identify similar problems in the energy field and other service delivery fields:
- Mismatch between water supply and water demand
- Theft of water resources
- Failure to achieve demand management targets
- Decaying infrastructure
- Deteriorating water quality
- Loss of essential skills
- Strangling of educational pipeline
But isn’t something missing from our list of core crises?
The price of mitigation
Right now we are in the painful early stages of a very steep hike in electricity costs, due to the construction of just two long overdue conventional coal-fired power stations, which happen to be the cheapest and most efficient option. We are sitting on about two-thirds of the coal reserves of Africa and the fabulous thick Waterberg coal seams alone can support nearly 20 new large power stations. Instead of using this largess, we are being urged to rush blindly in and throw everything into alternative energy sources, which are between two (in the core of wind) and three (in the case of solar) times more expensive than coal. (Think what that will do to your electricity bill and our pivotal industries.) In the meantime our cash strapped municipalities cannot even afford to maintain their crumbling infrastructure, let alone expand it. Add to that the intention to introduce a carbon tax that would rake in R82-billion per year! This is equivalent to incurring the cost of building a new Medupi power station every 1½ years – for decades to come! And don’t forget that Medupi power station is greatly over-priced since the tenders were let when our backs were to the wall and just before the over-heated world economic bubble burst. The only difference is that the carbon tax may not get us any new power stations for our money. Its main effect will be to push up the cost of electricity to astronomical levels, hammer our means of production, and price our manufactured products out of the export markets. Employment targets will become pipe dreams and the hope of tens of millions of our people to escape from grinding poverty will be dashed. And all that for the sake of an unproven hypothesis.
Even if the hypothesis eventually proves correct, that anthropogenic (man-made) carbon emissions are the main driver of climate change, the timing is all wrong. Right now we need to utilise our cheap energy to drive economic growth, create jobs and restore and expand essential infrastructure. Rushing in far ahead of our global competitors is a sure way to lose what is left of our export markets, which once lost would take decades to win back. The double whammy is that the high cost of locally produced goods would mean that they would also lose ground to better priced imports. Job losses, or at the very least stagnation of growth, would seal the fate of millions of our people.
Does this sound like an exaggeration? Just compare R82-billion with the entire 2009/2010 tax revenue of just R571-billion and you will see what I mean. Last year we also over-spent our tax revenue by R177-billion (31%), with similar projected deficits for the next three tax years. (SARS website, 2011). Another R82-billion onto that will not be pretty. But it will help SARS to look good since it will be income for them, but it will be equivalent to a 14% increase in income tax for the rest of us since the tax will be passed on to all productive consumers who happen to pay their electricity bills. Moreover, the reduction in competitiveness will put downward pressure on GDP, which will magnify the impact of the tax. The large budget deficit also increases the risk that the carbon tax could be soaked up to reduce the budget deficit, which means that we would all have to pay a similar amount on top of the carbon tax to fund the doubling or trebling of the cost of new power generation plant. This will directly reduce our ability to fund essential maintenance, refurbishment and development of water infrastructure. Naturally it would have a similar impact on all other forms of infrastructure development and betterment of society. Infrastructure bottlenecks would in turn further constrict manufacturing capacity and drag down our economy even further.
Reduced carbon emission?
Some may take comfort in the thought that the ensuing economic decline will have the desired effect of reducing our carbon footprint. But they would be wrong.
The right timing
The show-stopping threat
It is not insignificant that in the same sentence quoted by Mining Weekly Prof. Cawthorn added that our “biggest and most immediate challenge… belongs to clean water”. But then, how will we address this, if we blow our financial resources chasing shadows?
“The prudent see danger and take refuge, but the simple keep on going and suffer for it.” Proverbs 27:12
Herold (2010). The Water Crisis in South Africa, Civil Engineering, Vol 18 No 5, June 2010.
Herold (2011), Major Water Threats, Civil Engineering, Vol 19 No 5, June 2011.
Contact Dr. Chris Herold, Umfula Wempilo Consulting, Tel 011 463-5203, firstname.lastname@example.org