A better understanding of the linkages between electricity distribution and poverty is critical to a just transition. Otherwise, we run the very real risk of restructuring our energy system in ways that will permanently entrench present mechanisms that are deepening poverty and inequality.
South Africa is committed to a just energy transition in terms of Chapter 5 of the National Development Plan, although the country is only at the very start of that journey. How is this transition conceptualised? It focuses on how to address the results of a shift in energy generation away from coal: how do we ameliorate the impact of job losses in the coal value chain and the impact on local economies dominated by coal?
These are important issues that need sustainable solutions. However, there are significant linkages between energy, poverty and inequality occurring in the distribution part of the energy system that have largely been overlooked. This reflects a broader emphasis on the restructuring of energy generation – rather than distribution – in discussions about how to reform our energy system.
In part, this gap in the national conversation occurs because many of the linkages between distribution, poverty and inequality have been obscured by complex governance and institutional arrangements. The Public Affairs Research Institute’s Energy and Society programme was established to undertake research into exactly this gap: the wide range of social justice issues that originate in the distribution part of the energy system and are not currently on the just transition agenda. Our first working paper, “A Just Distribution”, presents a detailed model showing how energy distribution policy decisions affect household poverty and inequality.
Why is this research important? Firstly, the dominant narrative effectively determines and sets limits to the just energy transition agenda – what is on the table for discussion and the attention of policymakers. By implication, the factors that are not currently part of this narrative are effectively not on the just transition agenda. They, therefore, do not (and will not) receive the requisite attention from either policymakers or civil society. And these overlooked factors significantly impact poverty and inequality.
Secondly, the mainstream definition of what constitutes a legitimate, just transition agenda also determines who is considered a legitimate stakeholder (and thus entitled to contribute to solution creation) and who is not. A limited agenda effectively excludes from the national debate those who actually may have a significant vested interest in the future form and operation of the energy system.
Our research findings indicate that, via a number of interconnected pathways, the current distribution system is contributing considerably to increased poverty and inequality. This is completely contrary to the intentions of both South Africa’s pro-poor transformation agenda and original policy intentions with respect to the developmental role of energy in a post-apartheid society.
The ongoing effective invisibility of distribution in the just transition debate reflects a policy bias identified in the 1998 White Paper on Energy: “The South African energy sector has historically tended to promote policies which predominantly address supply-side issues… (however) energy is not an end-good but is rather consumed as a means to an end.”
The White Paper goes further to state that “despite the importance of energy services for low-income households, such services have not been adequately supplied in the past, the priority of government having been the development of a modern industrial urban society”. This policy bias has in large part gone unchanged for the intervening 22 years, despite the White Paper making it clear that change was urgently required.
A better understanding of the linkages between distribution and socioeconomic indicators is critical to our ability to design and implement a genuinely just energy system. If we continue to ignore them, we run the very real risk of restructuring our energy system in ways that will permanently entrench current mechanisms that are deepening poverty and inequality.
If we want an energy system that underpins a more socially just and equitable society then we need a better understanding of the multiple ways in which that system impacts poverty and inequality.
Policymaking (particularly in the macro-economic resource-constrained environment in which we currently find ourselves) is fundamentally about choosing which trade-offs to make, among multiple and competing goals. Those choices, in turn, cannot be made optimally without a full picture of what those trade-offs are, and the likely implications of different choices. The problem is that because of the effective invisibility of energy distribution as a problem to be addressed in any meaningful just transition, it is unlikely to receive the policy attention it requires.
As a result, decisions that effectively result in exacerbating poverty are being made without full cognition of the trade-off being made. Our aim is to remedy that situation. DM