Oil depletion, oil prices and energy transitions

What is happening in the oil market has important effects on the world economy. This is not going to change in the immediate future.

According to the IEA: “Global primary energy demand grows by 40% between 2009 & 2035, oil remains the leading fuel though natural gas demand rises the most in absolute terms” (IEA, WEO 2012)

However, another dynamic is that physical depletion effects are starting to filter into oil markets. Energy return on Energy Invested (EROI) is dropping and production costs are rising. There is a very close inverse correlation between EROI and oil production costs as well as with oil prices (at least for the US) (see this paper published earlier this year).

Key points are:

Rising oil prices are correlated well with decreasing EROI and increasing production costs

Expect exponential oil price increases for EROI below 10

Although proved oil reserves are rising, the important socio-economic question is whether economies are able to internalise rising costs as EROI declines

Additional burden to economy provides incentives for transitioning to increased efficiency and oil substitutes

Due to reliance on oil, transportation will be hit hardest

Resource-economics dynamics may be surprising.

The CRSES at Stellenbosch University hosted a forum to further discuss implications for South Africa.

The African Environmental Economist

The African Environmental Economist, a new online daily provides a selection of news that would be of interest to those working in natural resources, energy and environmental sectors in Africa and especially those interested in the role of economics and business in this regard.

For those interested here is the link.
Let me know what you think and please do alert me to any great content that could be posted in future editions.

Quote of the day: On prediction

It is not that I am somehow against prediction. I think that if forty years of econometrics has revealed anything of value to us it is that you cannot very often make successful predictions of the sort that economists seek. Despite the claims of some econometricians, most results they achieve are pretty useless. Anyone can run millions of regressions with a set of data and report a result that seems to pass all tests—though the fact that millions of regressions are run means that most of the conditions of the tests are violated. But even with such results we find that as soon as new data come along the previously reported results or models typically break-down. What I am saying is that no matter how interested in successful prediction some economists may be, this interest does not make it feasible.

- Tony Lawson, Faculty of Economics at Cambridge University in Erasmus Journal for Philosophy and Economics, Volume 2, Issue 1, Summer 2009.

Creation order and hope as sources of ethical response to the crises?

The financial, economic and ecological crises calls for deeper reflection.

Here the abstract of a presentation held in at a Christian Philosophy conference in Amsterdam last week:

Abstract
The social injustice and ecological damage exacerbated by the financial, economic and ecological crises, as well as a limited ethical response, forces a deep reflection on the transformative potential of Christian ethics on a society largely shaped by the dominant economic culture. The aim of the paper is to explore how the concepts of underlying creation order and eschatological hope for creation may be helpful in the understanding and formulating an ethical response to the financial, economic and ecological crises. A conceptual framework, or an intermediate theory [Shields & Tajalli, 2006], is developed and presented to assist in further research on the topic. An initial review of the literature, as limited to insights from reformational philosophy and eco-theology to the concepts of creation order and eschatology, is presented. The main tensions within broader Christian environmental ethics, as well as with dominant ethical theories in ecological economics are highlighted and discussed. Some implications for the further explanation and development of a Christian ethics for economics and environment are outlined and further research questions are identified.

Keywords: ecological crises, economic crises, ethics, creation order, eschatology, reformational philosophy, eco-theology, ecological economics.

Here the links to full presentation and presentation notes.

A New Economics Association

"The World Economics Association (WEA) was launched on May 16, 2011. Impetus comes from the embarrassment that is felt within the economics profession for its dismal showing regarding the Global Financial Collapse, and the absence in this global age of a truly international and inclusive association of economists."

An interesting development. What will characterize this organisation? The manifesto tells a lot:

"Manifesto

The World Economics Association (WEA) seeks to increase the relevance, breadth and depth of economic thought. Its key qualities are worldwide membership and governance, and inclusiveness with respect to: (a) the variety of theoretical perspectives; (b) the range of human activities and issues which fall within the broad domain of economics; and (c) the study of the world’s diverse economies.

The Association’s activities will centre on the development, promotion and diffusion of economic research and knowledge and on illuminating their social character. To achieve these aims the Association constitutes itself as a new form of worldwide, democratic, and pluralist organization with the following commitments:

1. To plurality. The Association will encourage the free exploration of economic reality from any perspective that adds to the sum of our understanding. To this end it advocates plurality of thought, method and philosophy.
2. To competence. The Association accepts the public perception that competence levels in segments of the economics profession were found wanting by recent events. So as to better serve society in the future, the Association will encourage critical thought, development of new ideas, empirically based rigor and higher standards of scholarship.
3. To reality and relevance. The Association will promote economics’ engagement with the real world so as to confront, explain, and make tractable economic phenomena. In this context it will also encourage economics to give active consideration to its history, its methodology, its philosophy and its ethics.
4. To diversity. Both the membership and governance of the Association are specifically constituted in order to embrace all forms of diversity within its membership.
5. To openness. The Association intends to ensure that all its processes of publication, discussion, meeting and association are transparent and open to input from all its members. To this end the WEA will constitute itself on the internet and use digital technologies wherever possible, including online conferencing and virtual publication.
6. To outreach. The Association recognizes the valuable contributions to economic thought that are made by researchers and thinkers outside the main body of economics. The WEA will encourage such people to become members and add their insights to our collective learning.
7. To ethical conduct. The Association will establish a committee to draw up a code of ethics.
8. To global democracy. The Association will be democratically structured so as not to allow its domination by one country or one continent.

The association believes that these commitments, when held in common by its members, will increase the relevance, breadth and depth of economic thought, so that in the future the economics profession and associated professions will be better equipped to serve humankind"

Plural, diverse, real-world, open, ethical.

Two observations: (1) Many of the same key words as the World Social Forum. (2) Association needs to ensure that plurality does not take the form of 'anything goes'.

For now, I have signed up.

A Cretan Commitment

What do economists have to say about the ecological and economic crises?

I had the fortune to visit the beautiful island of Crete during the first week of June with a group of people thinking and debating on the roots of the economic and ecological crises, how to respond to it and what the role of environmental ethics is in this regard.

The organiser asked me to draft a synopsis, a sort of an appeal to fellow economists. Here it is:

1. The current Keynesian economic response to the crises, with a focus on credit and spending does not recognise the deeper structural, ethical and ontological roots of the crises.

2. The ‘Green New Deal’, a response where green economy strategies are launched around the globe that promise jobs, a revitalized economy and at the same time intended to start addressing the ecological crises mostly through the deployment of cleaner technology, is not a sufficient response as it does not recognise the ethical and ontological dimensions of the crises.

3. It is recognised that ecological economics as an emerging interdisciplinary science includes elements of nature, justice and dynamics in its view of reality.

4. Ecological economists are called to challenge the problem of moral choice in the context of intellectual pluralism and the implications of a generalised theory of entropy that guides action-orientated decisions on sustainability.

5. Ecological economists are called to recognise the fragility of their discipline and build up a more resilient and integer theory to assist in transitions towards better sustainability.

6. Economists are called to further develop and build on theories that view individuals and communities as moral agents, and not as agents either naturalistically determined or endowed with unlimited freedom of individuality.

7. Economists are called to reflect on the paradigmatic implications of the idea that human beings are not autonomous, but stand in relation to God, to other human beings and to God’s creation.

8. Economists are called to recognise that theology, the study on the nature of God, as revealed in Word and creation, has a lot to offer on both the organisation/structure, as well as direction of such relationships.

9. Economists are called to recognise that ethics is not the outcome of self-interested choice.

10. Economists are called to reflect on the idea that the source of ethics is not revealed within human reason or in human experience, nor in the laws of nature, but is solely based in revelation by God as read in God’s own creation and in the written Word.

11. Economists are also called to study and respond to the ontological critique that economic science does not account for the wholeness of reality, as evident by its tendency to focus on the outcomes of a deductive, mathematical approach as a basis for real-world interventions.

12. Economists are called to develop approaches, models and tools that do better justice to complex realities, accepting the importance of the particular as well as the broader systematic unity of things.

13. Economists are called to realise that the power of the discipline in contemporary culture stand within a context, comes with an enormous responsibility to act for the improvement of the lot of humanity and of creation.

14. Economists are called, like anyone else, to take serious the idea that we are accountable to the living God, and should strive to come to wise decisions on how to manage the interrelationships amongst humans and the earth that God has created and sustains every day.

Note: This is a draft synopsis as based solely on my own interpretation and do not necessary represent those of others at the symposium

What are your own expectations of a graduate economist?

Someone asked me this question and here is my response:

A graduate economists need to be under the impression of their future role in society, the awe-inspiring diversity and complexity of reality and the opportunities and limitations of the economic sciences to deal with real-world problems. The power that economics has in shaping policies and decisions comes with a lot of responsibility. Economic policies and decisions have deep and profound impacts on the wellbeing of individual people, on society and the earth we live in. A sense of what scientific abstraction means and a proficiency in the tools and models that comes with it is necessary, but not sufficient. The pervasive economic and ecological crises emphasizes again how important it is that graduate economists need to have a well-developed sense of the moral philosophies that guide ethically responsible choices in society and to know how and when to act to the benefit of society and the earth we share.

Any other ideas?

Preparing for Crete: Ecological crises and ethics

The following commitment to present at a conference on ecology, theology and environmental ethics in June is coming closer...

Abstract

The question how to approach practical, ‘messy’ problems where problems are not well-defined remains actual. The ongoing financial and economic crisis, as well as an emerging ecological crisis, is an opportunity to reflect on deeper questions on how to approach and inform decisions in the real world.

Reflecting on close to fifteen years of personal experience in the field of environmental economic research and consultancy, coupled with a synopsis of what ecological economic theory has to offer, it will be made clear that solutions are not forthcoming within the fields of economics of ecology itself. Working towards a solution to the financial and ecological crises would include developing an approach that builds on a richer interpretation of the fullness of reality on an ontological level, and on an epistemological level includes at least three specific focus areas namely a systems approach to reality that take account of both nature and culture, an acknowledgment of and internalization of normative-ethical frameworks and the importance of visionary leadership.

These areas will be explored against the backdrop of developments in mainly the economic, but also in the environmental and policy sciences and with a distinct focus on the contributions of the Protestant-Christian tradition to a sustainable management of the earth’s natural and environmental resources.

Key words: economics, ecology, crises, systems theory, ethics, leadership, decision-making, Christianity, theology, ecotheology

I can't wait, but what on earth (no pun) have I let myself in for?

Why are cities often ignored when promoting sustainable tourism?

I have often wondered why responsible / sustainable tourism products tend not to be in cities. Surely sustainability in tourism should be as important in cities as in rural areas? Responsible Tourism in Cities will be on the agenda for the first time at the premier South African tourism marketing event Indaba in Durban as a 1-day conference on 6 May 2011 and show-cased in a pavilion for several days with a networking event on 8 May 2011.

Hoping that this will kick-start more awareness of responsibility and sustainability in city tourism, among the many questions to be discussed:

• What are tourism and sustainability issues unique to cities?

• Who are the key stakeholders involved in establishing, developing and maintaining responsible tourism in cities?

• How do 'quality of life' measures for residents correlate with 'best destination' measures for visitors?

Guest-blogger, Gerhard

(Photo: planeta.com)

Risks and opportunities of a waste economy

Municipal waste economies. Are they practical and sustainable?

Here a contribution to the debate as presented at a Waste in Business Seminar a few days ago.

Abstract: Economic Risks and Opportunities of the New Waste Legislation

The new waste legislation in the country is an important driver for change in waste management systems. The question what the economic implications of this new legislation will be has been scarcely addressed though. The City of Cape Town has started with a process of evaluating alternative service delivery mechanisms in waste management. As part of this process, a high-level evaluation of likely economic costs and benefits was done. In this presentation the main results of this economic analysis is presented. It is concluded that waste minimization and diversion from landfill will incur additional economic costs, but that certain mechanisms are more costly than others. A case is made to focus attention on specific larger-scale, lower-cost interventions in partnership with external investors and to spread out the impacts over time.

Full presentation downloadable here.

Quote of the day: On Scarcity and Oil Prices

"..if demand growth resumes in China and other countries at its previous rate, the date at

which the scarcity rent will start to make an important contribution to the [oil] price, if not here

already, cannot be far away."

JD Hamilton, 2008. Understanding Crude Oil Prices. NBER Working Papers.

Rising value of water rationale for restoring ecosystems

The scarcity of and rising value of water in South Africa supports the argument to view the restoration of ecosystems as an economically viable management option.

Here the abstract of a recent economic study on the Agulhas Plain as published by the Department of Economics, Stellenbosch University:

The Agulhas Plain is a low-lying coastal area within the Cape Floristic Region classified as one of the six plant kingdoms of the world. The area is heavily invaded by alien vegetation that infringes upon the sustainable supply of ecosystem goods and services provided by the native fynbos vegetation. Natural capital restoration is expected to recover the supply of ecosystem goods and services, and in particular to increase the amount of water available for consumption. The study conducts cost-benefit analyses to assess whether alien clearing and restoration would add value to the Agulhas Plain. The analyses indicate that the cost of alien clearing and restoration in the area cannot be justified if the additional water released holds no benefit to the Plain. A brief assessment shows that the actual average value of water on the Agulhas Plain, as estimated by other studies, is higher than the economic cost of making the water available through alien clearing and restoration. Thus this would make alien clearing and restoration economically justified.

The full paper can be downloaded here.

Cape Town Tourism Responsibility and Sustainability

Following up from last week's post: During the 2011 Responsible Tourism Week a contribution from City of Cape Town Director: Tourism Department Nombulelo Mkefa and Cape Town Tourism CEO Mariëtte du Toit-Helmbold sets out many of the advances towards responsible and sustainable tourism in the city.

A year ago, the City of Cape Town adopted its Responsible Tourism Policy, to achieve sustainability in managing tourism in Cape Town which links with the City's overall strategic direction. However in the same contribution to the debate there is also the following warning -

“There is a real danger of complacency, convincing ourselves that we are doing fine and that everything that defines Cape Town as one of the most beautiful places on earth will be here forever. It is a precarious balance between people and the environment and we must become much more proactive and vigilant in terms of responsible tourism and leadership.”

This places us right into the realm of this blog: “a precarious balance between people and the environment” with a huge number of stakeholders in the complex system of Cape Town as a place to live in and a place to visit.

That some are trying to counteract this complacency is visibly confirmed with the active Cape Town participation during the global 2011 Responsible Tourism Week – take a look on the twitter hashtag #rtweek2011 how often the city is mentioned and have a look at a variety of case studies and stories - see the entries dated 14 to 17 February in responsiblecapetown.co.za/blog/

One final thought from my own contribution there: The international tourism market is full of uncertainties, so Cape Town, don't forget our domestic tourists and their needs. And Capetonians, do visit what our own city has to offer, at a slow pace.

Responsible Tourism in Cape Town and the world

Guest-blogger, Gerhard Buttner, on responsible tourism in his original home city and web 2.0:

After the rapid massive rise of international tourism in the 1990's, Cape Town is successfully positioning itself as a leader for “Responsible Tourism in Cities” in the 21st century. More on the website: http://www.responsiblecapetown.co.za/

As born Capetonian (though presently living away from my home city) I am very pleased to see Cape Town take this role seriously by focusing on economic, social and environmental aspects of responsible and sustainable tourism. Appropriately Cape Town was the host of the Responsible Tourism in Destinations Conference in 2002 which led to the Cape Town Declaration on sustainable and responsible tourism striving towards creating “better places for people to live in and for people to visit” and a lot has happened since then.

Cape Town will again be in the responsible tourism limelight 14 to 18 February at the 3^rd Responsible Tourism Week organized by planeta.com (the global journal of practical ecotourism ) with worldwide participation - including Capetonians - on web 2.0: #rtweek2011.

Capetonian responsible tourism pioneers, leading thinkers and innovators are also specifically invited to share their stories.

Follow the action at the above links and also watch this blog for follow-up posts.

Quote of the day: On determinative and normative knowledge

"Sadly, while mankind's determinative knowledge has accumulated, its normative knowledge has been rather volatile."

In: J.D.R. de Raadt. FAITH AND THE NORMATIVE FOUNDATION OF

SYSTEMS SCIENCE. Systems Practice, 10:13-35,1997.

The Roaring Augrabies

For a few days Augrabies Falls, or "the place of the Great Noise" in the Northern Cape, is becoming a place of "Great Thunder". The average volume of 313 cubic metres per secondis expected to increase to around 5200 cubic metres per second, almost 17 times the average flow! With columns of spray rising high into the sky, it reminds one of Mosi-oa-Tunya or the "Smoke that Thunders", a local description for the Victoria Falls. Here are some eyewitness pictures of one of Africa's great showpieces, although when we where there the main falls were completely obscured by spray.

When driving upstream it is very clear that the floods that cause this spectacle also have another, more darker side:

It is when a displaced labourer start asking us what to do next after his house was flooded, the extent of the problem starts driving home. Many flood-hit areas have now been declared as national disasters.

Some thoughts on Christian environmental ethics

The emerging ecological crises have brought a renewed focus on an ethics of the environment. An ethics of the environment and Protestant Christianity are often perceived to be at odds. An often-cited reason is the thesis by Lynn White that Christianity is responsible for the current ecological crises. This thesis has been discussed and refuted previously, but still commands a lot of attention. An alternative Christian ethic on the environment is emerging as evident by certain educational programmes, such as this one at ICS (youtube) and recent work at the University of Exeter.

What does concern is that certain long-term developments within mainstream Protestant Christianity theology and practice itself that does not lend itself easily towards a worldview integrative enough to include the whole of the cosmos. Protestant Christianity has a lot to offer in the development of an environmental ethic, but is plagued by certain internal obstacles. At least two of these obstacles need further elaboration, namely a narrow focus on personal redemption and the Platonic eschatological idea of a sinful earth that will be exchanged for a perfect heaven.

This contrasts with another view within Protestant Christianity that redemption includes the whole of the cosmos and that the future will be a renewed heavens and earth, restored to Gods original intent at creation.

It is my view that such divergent views on the nature of redemption and eschatology have had profound impacts on the development of a Christian ethics on the environment, and need to be critically discussed and where possible corrected for further contributions to the field of environmental ethics from an integrative Protestant-Christian worldview.

The balancing act of sustainable waste management

The need for the sustainable management of waste is becoming more important with the opportunity to conserve materials, landfills competing for valuable land, and the health, environmental and aesthetic impacts of ineffective disposal methods. Waste managers are increasingly challenged to create and maintain sustainable systems that are financially and economically affordable, acceptable by society, environmentally effective and practically implementable.

For a short review on the costs and benefits of waste management options and many other very valuable contributions to sustainable waste management, see this newly released Waste Revolution Handbook.

Image: earth911.com

"Nelson Mandela's struggle for a garden on Robben Island" or "Why it makes sense to invest in ecosystem services"

It was not for nothing that Nelson Mandela fought for permission to grow a garden on Robben Island.

In his words: “To plant a seed, watch it grow, to tend it and then harvest it, offered a simple but enduring satisfaction. The sense of being the custodian of this small patch of earth offered a small taste of freedom.”

The simple act of gardening helped Nelson Mandela sustain his longer–term perspective, re-emphasised a sense of responsibility beyond himself and provided a link to freedom. Powerful stuff!

Nelson Mandela’s garden story is beautiful and gripping, but certainly not unique. The link between healthy nature and human wellbeing is well-documented.

It makes sense to invest in ecosystems services.

For the full text of remarks at a recent gathering of the Cambridge Resilience Forum read here.

Image: Nelson Mandela Foundation

Green Jobs at micro level in Africa

As occasional guest blogger (after a bit of a break), I wish to share a few links I have come across recently about Green Jobs in Africa on a micro level, triggered by coming across this interesting company merging green jobs with low-impact design and living: touchingtheearthlightly.com

and a pre-announcement for the Green Economics Conference in Cape Town in January 2011.

While at a macro level the topic of Green Jobs is widely debated (see previous entries on Sustainable Options and some information from UNEP), others simply get on with the job of creating green jobs at the micro or local level.

Some interesting examples of creating local green jobs in Africa, include:

• an innovative take on clean energy in Kenya,
• a drinking water solution from South Africa,
• recycling for job creation in Ghana
• and revisiting tourism as a natural, yet often under-performing green job creator.

Gerhard Buttner

H/T planeta.com video, Afrika Tourism

Crowd wisdom on who will win the FIFA World Cup 2010

What is the track record of crowds predicting the outcome of major events like the FIFA World Cup?

This is what Lucker et al wrote in their article On the Forecast Accuracy of Sports Prediction Markets:

In this paper, we present the results of an empirical study that compares the forecast accuracy of a prediction market for the FIFA World Cup 2006 to predictions derived from the FIFA world ranking and to a random predictor. We find that prediction markets for the FIFA World Cup outperform predictions based on the FIFA world ranking as well as the random predictor in terms of forecast accuracy.

So, what are some sports prediction markets saying? Inkling Public Prediction Market: Brazil, closely followed by Argentina.

And, yes some experts are completely off the mark.

I still think Holland can do it. Lucker also warned against that.

FIFA, soccer or country?

The World Cup is in full swing. Who gets the attention - FIFA, soccer itself or the country?

Based on an Internet search volume index, Google Trends sheds some light:

south africa

0.60

fifa

1.00

soccer

1.60

germany

0.90

Although attention to FIFA is generally lower than the game of soccer itself, it is much higher relative to game and country during both the World Cups of 2006 and 2010.

Five systemic challenges

In a recent panel discussion at the South African chapter of the World Future Society we discussed the top five systemic challenges facing South Africa. From the perspective of environmental sustainability here is my five:

First, the uneasy relationship between coal and carbon. Much of the electricity in major developing countries such as China and also South Africa is expected to come from coal. The energy returned on energy invested ratios for coal are still higher than other energy feedstocks. The IEA expects that coal will continue to play a major role in world energy supply for many decades to come. South Africa’s own energy plans include coal as the primary source for electricity generation in the forseeable future. Around a third of total carbon emissions in the world is from coal. This number is higher in South Africa. Coal provides three-quarters of energy supplied in SA. How and when the costs of carbon constraints will seep through into South Africa’s energy system, and what the technological and behavioural responses will be is a key trend to watch and a key challenge to manage.

Second is the nexus between changing climates, the availability of water and the need for more productive food systems. South Africa, apart from some Middle Eastern countries, have one of the lowest amounts of renewable freshwater available to its people. This amount has also been drastically reduced in the last few decades. Food security in Southern Africa is a major problem, with well over 100 million people malnourished in the region. The pressure for an African revolution in food production is large, but this have to be managed within the context of high vulnerability to climatic change and increased competition for water resources. Desalination is fastly becoming an option for coastal towns and cities.

Third is the impact of Sino-African relationships on Africa’s, as well as South Africa’s, development paths. Africa is seen as a preferred supplier of commodities, most notably oil, but also cotton, diamonds, logs and other base metals. The ecological costs of China’s growth have been well documented as well as China’s drive towards investment in cleaner technology in recent years. Africa’s long history of natural resource exploitation and the mixed signals from China on environmental management needs to be further unpacked as it may have important consequences for the sustainability of South Africa’s development path.

Fourth, South Africa’s water system needs urgent attention. Water services in only 11% of municipalities in the country are fully functional. Almost half are either at high risk or critical. A report on the state of about half of our sewage treatment works further revealed that only around 7% qualified for so-called Green Drop Status, which is a close measure of international accepted norms. The problem of decanting acid mine drainage looms, where the high amounts of salts and heavy metals associated with it will threaten downstream irrigation and other water users.

Fifth, one of the downside’s of South Africa’s recent economic boom was a massive pile of waste. Landfills are under pressure, and alternative waste management options are actively seeked. The costs of waste management are likely to rise while the country is managing the transition to waste avoidance, reduction and recycling.

A waste water crises?

The existence of a waste water crises is denied despite mounting evidence of mismanagement and neglect in waste water treatment systems.

Crises and denial has been a persistent theme in the last few years and one that was explored in an earlier blogpost two years ago (see Denialism and crises). This is what we wrote back then:

At least we have certainty about one thing. The next time there will be critique on a politically sensitive issue in South Africa, chances are good that it will be denied. It becomes a trend:

HIV does not cause AIDS (see here and here). There is no electricity crises (see here, that was 2006!). Poverty in South Africa is not increasing (see earlier blogpost). There is no crises in Zimbabwe (see here). There is no looming water crises (see here), and the latest:

Health Minister Manto Tshabalala-Msimang has rejected the findings of a report showing SA is not on track to meet its millennium development goals for reducing child and maternal mortality. (see article and earlier blogpost)

This trend is continuing as a crises in SA's sewage system is denied. Contrary to what the results of an audit by government on 53% of South Africa's 852 waste water treatment works tells us. Here are a few snippets from Politicsweb on the issue:

only 32 of them qualified for so-called Green Drop status, broadly equivalent to them complying with international standards

hundreds of millions of litres of untreated or inadequately-treated sewage is being illegally discharged into rivers and streams around the country each day, mainly by small town municipalities.

The SA Medical Journal's news section, Izindaba, warned in August last year that the country was "sitting on a health time bomb caused by outright neglect of its water and sanitation systems".

85 percent of South Africa's sewage system infrastructure was "dilapidated" and the overall neglect of the country's water and sanitation systems "will cost R56 billion to repair"

the minister said she did not know if the funds could be obtained.

reported increases in diarrhoeal diseases and child deaths to areas of the country where sanitation and water systems have broken down.

only two municipalities had been charged, one in North West and another in the Free State.

Green Drop Report strongly identifies skills shortages at waste water treatment plants as a major problem, saying these exist at all levels of management.

The real crises is one of leadership. The disturbing trend is that this crises seems to be deepening.

Image: greenprophet.com

On electricity tariffs and fossil fuel subsidies

With the rising costs of fossil fuels and fossil-fuel based electricity generation, disparities in electricity tariffs and persistently high fossil-fuel subsidies are coming under the spotlight. This has important implications for South Africa's possible economic development trajectories.

From Moneyweb (see also Politicsweb with a link to the leaked dossier):

The Democratic Alliance (DA) can this morning reveal a secret 291 page Eskom dossier, which provides definitive proof, amongst other things, that Eskom has been charging vastly discounted electricity tariff rates to companies that provide little or no benefit to the South African economy. The document was leaked from high level officials in Eskom to the DA and we made use of its information yesterday to question the acting CEO in the portfolio committee on public enterprises. The chairperson of the portfolio committee tried to tell us not to use the report, but we are today releasing it in full, because we believe its contents are of manifest importance to the South African public. This report stands alongside the now notorious Olsen Report - also released publicly by the DA - in that it provides cast iron evidence of the extent of mismanagement at Eskom, the ANC government's complicity in it, and the damage that is being done to the South African economy as a consequence.

The signs were there much earlier as reported in the press (see here for example) and also on this blog in the context of potential additional carbon costs:

At an average emission rate of close to 0.9kg CO2/Kwh and a price for carbon between $20 and $40 per tCO2 start penciling in an additional cost of between 14-28 cents per Kwh ($1 = R7.5). To place this in perspective Business Day reports: Eskom is understood to have guaranteed the Coega project electricity at 14c/kWh.

Who pays the rest?

What was meant as a rhetorical question way back then is coming clearly in focus now. Of course, we South African citizens have been paying the rest, directly through our electricity bills and indirectly, with other global inhabitants, through the impacts of a changing climate.

Also this morning in my inbox was a study on worldwide fossil fuel subsidies - amounting to a whopping $500 billion annually. According to the report, South Africa subsidised electricity costs at almost $10 billion annually. It was not clear from the report what exactly went into this $10 billion, but that this is substantial is without doubt.

Cheap electricity used to be an integral part of South Africa's industrial policy. With rising electricity prices and potential carbon liabilities the costs of such a policy is becoming rapidly clearer. What the implications are and whether this creates space for new opportunities has been the focus of debate for some time now.

In this time of transition towards a new electricity regime expect more painful stories and hope for wise leadership in seeing opportunities.

Notes on China and Christianity

The state in which Christianity in China finds itself is not obvious for the casual observer. On face value worship is openly allowed (I have attended mixed Chinese-English services for example) and churches are evident everywhere. At the same time one hears of persecution, torture and even executions amongst Christians in China.

Christianity in China is a broad term including Catholics, Protestants and a handful of more Eastern Orthodox Christians. These denominations are controlled by government through several councils and associations. There are also independent house-churches independent from government. It is these house churches who are under pressure.

In a book openly available in Chinese bookshops “Christianity in China” and published by the China Intercontinental Press, author Luo Weihing describes the history of Christianity in China. According to this officially endorsed version, what started out as English missionary work early in the 19th century has grown to 3 million in 1979 and an estimated 16 million Christians in 2002. The composition of Christianity also changed from elderly, women, illiterates and the sick earlier to a larger ratio of middle-aged, youth and intellectuals in the 1990’s. What these numbers do not reveal is the amount of Christians in house churches; one source estimating this to be between 20 at 50 million people growing at 7% pa (see “Acquinted with Grief” by Alan Harvey).

In the transitions towards communist China, Luo describes how as a “foreign religion” Christianity posed many contradictions for Chinese people:

“ Enlightened by Premier Zhou, the Christian leaders realized that the difficulties Christianity faced were due to its notorious history being connected to Western colonialism”

That was 1950 and led to the emergence of the principles of self-rule, self-reliance and self-development in Chinese Christian churches. Around two-thirds of Christians at that time subscribed to this “independence under communist rule”. Patriotism, cutting of ties with Western churches and an anti-US campaign for example quickly became part of official Chinese Christianity. During the cultural revolution from 1966-1976 the Christian churches were closed and religious activities banned. The restoration of these arrangements started again in earnest in 1980.

The 200 000 or so Christians who did not subscribed to this independence under communist rule, formed the backbone of the house churches. The book “Acquinted with Grief” by Alan Harvey describes the role of Wang Mindao, also called the “Dean of the House Churches” and the founder of the Chinese Church in Christ. Wang was arrested and imprisoned for over twenty years up to his release in 1980. He argued that if Christians would go in a union with the state, ideological pressure would gut the church of its message and mission.

In the early 1980’s thousands of house church leaders were sent to labour camps. Up to 1989, two years before Wang’s death, pressure on the house churches has eased. In the build-up to the Tiananmen Square incident in 1989, the ruling Party’s influence eroded and Christian churches grew. Interpreted as a challenge to authority, house church leaders were once again under threat and house church leaders were send to labour camps (2001) or even executed (2006).

It appears as if the communist state wants to portray a sense of tolerance, but at times startle with their fierce crackdowns on those who are independently organised.This includes the house churches, but also other so-called ‘evit cults’ such as the Fulan Gong.

Understanding these contradictory signals from the Party would require a deep study on its roots. One explanation is that an off an atheistic and materialistic state irked by the superstition and anti-scientific behaviour of ‘evil cults’. At a deeper level I think it has all to do with an uncontrollable grass-roots influence on society which seems to challenge the authoritarian and nationalistic nature of the Party. China wants to be the best and biggest in the world, an urge born from sources such as the historical oppression of Chinese by foreigners, the failure of Mao’s 20th century communism and the human urge for absolute power. Earlier rebellions were at times associated with some form of Christianity as well.

In such a context it is not a big step to reason that Christianity, if not contained within and submerged to the purpose of the Chinese state, will be a potentially destructive social force that Party leaders will have to deal with. Given the nature of Chinese ambition, the history of rebellion, the eroding powers of the Party internally, the rise of Christianity and the rise of Chinese power internationally one can reasonably expect a continuous heavy hand on Christians who function independently from the state-controlled churches.

This is not the only way though. One can only hope that the churches will be allowed to show what it really means to be Christian in this world. If Christian house churches are allowed to practice their believes in the open, it will be for all to see that this is not a revolutionary challenge to the state. I agree with Thomas Harvey that the Party leadership need to think seriously about giving Christians freedom to really be self-organised, self-ruled and self-reliant. This will be a tell-tale investment in the harmonious society they so much want.