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South Africa

OPINIONISTA: Catastrophe capitalism jumps on the electric car bandwagon, while South Africa sticks in the slow lane

As the world rushes into the future of electric cars, spurred on by catastrophe capitalists seeing this as The Next Big Thing, South Africa remains stubbornly wedded to fossil fuels – and it isn’t hard to see why.

Electric cars are the future – if there is to be a future for humankind. Although climate change reports are fast becoming the new norm, most of us were nonetheless unprepared for the very recent reports about the Arctic being on fire, literally. Headlines like: Wildfires Ravaging The Arctic Right Now Are So Intense, You Can See Them From Space tell the story. Similarly, who would have imagined that the record-breaking heatwave in Britain would have caused chaos to…the railway system? Extremely high temperatures buckled rails and sagged overhead lines, compelling the cancellation of services and severe speed restrictions on those services that did manage to run.

The inescapable reality to which these events attest brings us face-to-face with an apparent paradox: Reflecting the regularity of extreme weather events and the increasing sophistication of climate science that allows for the scientists to reach conclusions with an unusually high 99% certainty, the leaders of the world, with the exception of aberrations such as the current incumbent of the White House, are beginning to compete among themselves for who has the most progressive climate change policies. Yet, it is their actual practice that gives the lie to their claims and self-promotions.

The UN’s Intergovernmental Panel on Climate Change (IPCC) issued a major scientific report in October 2018. In another unusual step for scientists, the report noted that the essential task of cutting the world’s greenhouse gas emissions in half by 2030 demanded “rapid, far-reaching and unprecedented changes in all aspects of society”. It is against this metric that the governments of the world have failed. Only seven out of 195 countries have made either the commitment or the effort to meet the 2°C upper-temperature increase, let alone the 1.5°C limit agreed in Paris in 2015. The Secretary-General of the UN, Antonio Guterres, was forthright when he observed: “We are seeing everywhere a clear demonstration that we are not on track to achieve the objectives defined in the Paris agreement.”

Why our leaders condemn us to climate suicide – and, why we, the people of the planet, allow them to do so – are the biggest single questions facing humanity, ever.

Be that as it may, most of us know that to secure any chance of a future, greenhouse gas-emitting cars must fast become history. It is this universally recognised reality that makes electric cars (along with all things “green”) a marketeer’s delight. It is, indeed, this growing awareness of climate catastrophe that provides a perfect protection for the opportunisms of catastrophe capitalism.

Catastrophe capitalism is a concept introduced by Naomi Klein in her 2007 book, The Shock Doctrine: The Rise of Disaster Capitalism. Antony Loewenstein further developed the concept in his 2015 book, Disaster Capitalism: Making a Killing Out of Catastrophe. The proposition is that governments, acting in concert with business interests, use major disasters or ongoing crises to introduce emergency policies that would be opposed, under normal circumstances.

But: electric cars are a desperate necessity. Why, then, as I shall be demonstrating, is there any need for stealth, for subterfuge, when it comes to government support for electric cars? Indeed, the question extends to the real reasons why governments promote electric cars in the name of climate change, when they are the same governments earning the wrath of the UN’s Secretary-General for their failure to take the measures required to meet their own climate change commitments?

What we are not supposed to know

Many governments across Europe and elsewhere have introduced incentives for the rapid transition to electric-propelled cars. These various financial inducements, to be detailed in due course, have either been welcomed or met in silence by the general population. This government-backed transition to electric cars would almost certainly have been opposed were it not for the general acceptance of electric cars being an all-too-rare measure to counter the climate crisis. It is this appeal of governments actually doing something about the climate that has had the effect of electric cars legitimising the plague of private cars.

While being the future, there are current, technical concerns specific to electric cars. Apart from such well-known issues as their short-range, lack of battery charging facilities and high purchase price (no doubt inflated by a now-standard “green” surcharge), other misgivings include:

  • In addition to calls from battery manufacturers to disclose the carbon footprint of their products, there is also concern about the human rights abuses, including child labour, involved in the extraction of battery-related minerals. As Kumi Naidoo, Amnesty International’s Secretary-General, has noted, climate change should not be tackled at the expense of human rights.

    These abuses are, unfortunately, far from exclusive to the mining of minerals needed for batteries. Moreover, given the pace of technological change, it is a safe prediction that, sooner or later, electric cars will approximate the socially responsible, climate-friendly cars they pose at being.

    Far more important than this marketing opportunism, however, is the respectability of electric cars obscuring the unsuitability of private cars, regardless of their engine types. This consequence need not be conscious.

  • Private cars, available in unlimited numbers to everyone who can afford them, have no proper place in today’s world. There are some 1.015 trillion vehicles in the world, with 70.5 million passenger cars being produced in 2018. Production is expected to grow by 10 million in 2019.

Before offering a brief outline of what these various numbers mean, it must be emphasised that the engine type has nothing to do with facts such as:

  • Cars kill:

    Worldwide, cars killed 1.25 million people in 2017. Additionally, between 20-50 million people were injured or disabled. The global cost of these accidents was some $518-billion. In South Africa in 2018, cars killed an estimated 40,000 (a 1% decline from the previous year). About 4.5-million people were seriously injured in crashes in 2018 – also a 1% decrease over 2017. The cost of these road accidents is estimated to have been R142.95-billion in 2015 or 3.4% of the country’s GDP. By comparison, agriculture’s total contribution to GDP in the same year was only 2.3%.

  • Urban congestion:

    This needs no elaboration for it is the lived experience of anyone who has the misfortune of travelling by road in (virtually) any large city. With cars being status symbols, SUVs, city-legal tanks (with a 6.75l 12-cylinder Rolls Royce as the ultimate absurdity) increasingly take up the ever-diminishing space on roads. The ever-increasing number of vehicles on the road aggravates congestion, travel time and stress levels. And South Africa’s car production is required to more than double by 2035.

  • Urban gridlock:

    Gridlock is the inevitable outcome of congestion. Gridlock means the congestion is so bad that no one moves, leaving everyone trapped in their cars. A 100km traffic jam on a Beijing highway in 2010 resulted in 11 days of total gridlock immobility.

    Gridlocked Cape Town is a South African disaster waiting to happen, for Cape Town is already the 48th most congested city in the world.

  • Resource Depletion:

    The problem of there being far too many throwaway tyres brings us to its opposite problem of finite physical resources. With the assistance of Kevin Bloom, we know that the United Nations Environment Programme published a report entitled Global Resources Outlook 2019: Natural Resources for the Future We Want. This report found that 53% of global carbon emissions not only come from resource extraction – “pulling materials out of the ground and preparing them for use”but, as the biggest surprise for the report’s authors themselves, that the substantial emissions from all subsequent burning of fossil fuels are not included in that number. The report additionally found that resource extraction is responsible for more than 80% of worldwide biodiversity loss.

    As Joyce Msuya, acting executive director of the UN Environment Programme, warned: “Frankly, there will be no tomorrow … unless we stop.”

    What is more, these ominous numbers exclude less obvious resources like…water, for instance. Against the headline in a recent New York Times that A Quarter of Humanity Faces Looming Water Crises, the five major car manufacturers in the US use over 100 million cubic metres of water to make their cars. That’s 40,000 Olympic-size swimming pools. Another US measure puts the water used for each car at between 52,000 litres and 82,999 litres. Yet another metric: to make one ton of steel to make one car uses 121,000 litres of water. The numbers differ but whatever they are, they all point to the huge amount of scarce water that is being used.

*****

What the foregoing all point to is the urgent need to reduce the number of private cars. Some argue that this reduction must be in the order of 90% over the next 10 years. But, as we have seen, rather than reducing the number of cars, they increase inexorably. More important, there is no chance of this stopping, let alone reversing, unless and until there is an integrated, mass transport system, based mainly on trains and buses, that is rational, safe, cheap, reliable and frequent and offers a service throughout the day and much of the night, at least in large cities.

Measured against the cost of such a transport system, would many people remain silent as governments introduce costly incentives for electric cars? The wager is that they would demand very different priorities.

Government Inducements for electric cars

The incentives, introduced mainly in the 2000s, were either done collectively (as in the EU) or by individual governments across the whole of Europe, several Asian and Central and North American countries. They are all variations of measures that include (and, and):

Catastrophe Capitalism

In addition to the comprehensiveness of the government incentives, there is one feature that stands out from all others: there has been no significant objection to this costly and sustained privileging of electric cars by the car manufacturers that dominate the sector and are the most vulnerable to their assets being stranded. From 1998, when the Japanese government introduced the first of the incentives, to today, only German-based car manufacturers expressed any opposition and, even then, without much energy. The oil companies similarly raised no noticeable opposition.

What might all this silence tell us?

Most of the incentives were greatly expanded after 2008. Probably, not coincidently, 2008 was also the beginning of the Great Recession that engulfed the world. The hallmark of this recession was a deadly combination of both investors and banks being almost unconditionally unwilling to take risk. This meant the banks wouldn’t give credit even to the few investors willing to take the risk. This circumstance compounded the pre-existing and concurrent duality of huge amounts of both non-productive capital and unused productive capacity. Both conditions are now being recognised, even by mainstream economists and commentators, as forming a standard feature of modern capitalism: stagflation – economic stagnation along with inflation. Writing in 2014 about the US, Fred Madoff and John Bellamy Foster noted that in the fourth quarter of 2013, the after-tax profits of corporations as a percentage of GDP hit a record of 11.1%, about twice their average percentage for the 1990s, causing the Wall Street Journal to indicate that high-profit margins accompanying low investment were a major problem of the economy.

The size of the surpluses is indeed staggering. Two numbers are indicative. The pile of cash and cash equivalents in the hands of US firms alone amounted to a hoard of nearly $5-trillion in 2010. In 2017, the liquid reserves of just one company, Apple, the iPhone manufacturer, was $163-billion. (To help make sense of this number, it equates to R2.51-trillion (on 13 August), which dwarfs the entire current South African national budget of R1.83-trillion.)

Surplus capital reflects idle productive capacity, measured by the “capacity utilisation rate”. This is an economy’s capacity to produce (supply) as a percentage of total demand (determined not by social need but expected sales). The rate in the US was 77.92% in June 2019, with the average being 80.25% between 1967-2019. The corresponding numbers for the EU are 81.60 and 81.21 (between 1985-2019). South Africa’s numbers are 81.70 (1st quarter 2019) and (81.88 between 1971-2019).

(Alongside this enormous waste of idle capacity are the real and urgent unmet needs of billions of people.)

The worldwide expansion of government incentives for electric cars coincided with central banks in the developed world introducing their own versions of quantitative easing to save their banking systems during the global Great Recession that began in 2008. Trillions of dollars were pumped into the economy. Few people questioned this because the unprecedented global economic crisis was sufficient justification.

Catastrophe capitalism capitalised on climate change to smuggle in the energetic promotion of electric cars. Electric vehicles are the 2nd industry revolution within transport. They require huge amounts of capital and will become an ideal compulsory market for absorbing idle productive capacity as the world transitions away from directly fossil-fuelled cars. The projected growth is indicative of both the capital and productive capacity that will be needed. Electric vehicles are expected to make up around 50% of all global new light-duty vehicle sales by 2040, up from 3% in 2020 and a projected 11% in 2025.

Whether by accident or design, electric vehicles serve an even bigger purpose: as we have already seen, they legitimise the perpetuation of anarchic and destructive transport systems built around private cars.

Some of the above catastrophe capitalism reasoning is speculative, even though it relies on inferences and deductions from hard facts. However, direct evidence of strategic thinking is available. This is most explicitly so in the case of the European Green Car Initiative of 2009-13. In the words of its own website, “the Initiative was created in response to the global economic crisis of 2008, and… is following a system approach to tackle the challenge of decarbonisation of road transport, and contribute to the transition to greener road transport, while boosting the innovative strength and competitiveness of the European economy.”

In 2014, the initiative became the European Green Vehicle Initiative, which describes itself thus: “The European Green Vehicles Initiative is a contractual Public Private Partnership (cPPP) dedicated to delivering green vehicles and mobility system solutions of the future which match the major societal, environmental and economic challenges.”

The use of climate change to promote domestic car industries and, in the case of the US, additionally counter the challenge of electric car dominance by China, was recently expressed by US Senator Lamar Alexander, when introducing the Driving America Forward Act:

Ten years ago there were no mass-produced electric cars on US highways, and today there are about one million, and automakers are planning to make millions more. Investing in American research and technology for better electric vehicles is one way to help our country and the world deal with climate change. I’m glad to co-sponsor this important legislation, which will encourage even more production of electric vehicles, create good jobs and boost the economy.”

Already one million electric cars with legislation to promote one million more, all thanks to climate change and catastrophe capitalism.

South Africa has no support for electric cars (although local vehicle manufacturers are beginning to make a noise). Instead, we have a 45% import tax & duty to penalise electric vehicles.

Why?

Well, the government that legislates the economy that produces world-shattering levels of unemployment will claim to be concerned about … unemployment! They will doubtlessly point to a large number of people in the transport sector whose jobs electric vehicles threaten to replace or transform. The numbers are not to be scoffed at. They include: 170,000 in the platinum industry; 130,000 petrol attendants; 80,000 in the automotive industry; 400,000 in the automotive service industry at risk by the virtues of electric vehicles – reduced maintenance and longevity.

On the other hand, the rapid transition to electric cars in the world outside of South Africa guarantees disaster for the platinum miners. Moreover, seeing that 57.5% of South Africa’s total vehicle production was exported in 2018 and that the principal export markets are committed to going electric, car manufacturing is driving to trouble. The virtue of having to start from scratch – only 150 electric vehicles were sold here in 2018, with a peak of a mere 250 in 2016 – means a long period before electric cars threaten petrol stations and, hence, ample time for a Just Transition to address the needs of all threatened workers.

Moreover, there are more than a million already identified climate jobs waiting to be created.

What, then, might the real reasons be for the absence of a South African government-led support programme for electric cars?

Electric cars need electricity, lots of the stuff if there is to be an electric car revolution. Where will this electricity come from? There is only one answer – renewable energy, given that electric cars are marketed as a contribution to saving the future. Eskom, however, hates renewable energy, as does the government, even though with mild ambivalence. We know this with all the exactitude of the highly precise amounts allowed for the various energy sources by the IRP, the Integrated Resource Programme for Electricity.

The IRP is the statutorily required policy document in which the government lays out its energy mix for the next 20 years. The current IRP, of 2010, places a government-imposed cap on how much electricity can be generated by renewables by 2030. This IRP, released in 2011, the year in which South Africa hosted COP 17, the annual gathering of the leaders of the UN, in Durban, was not ashamed to restrict renewable energy to a mere 9% of projected total supply in 2030. It has long been an open secret that this cap was to protect both coal and nuclear energy sources.

The IRP is supposed to be updated every two years. It is now 2019 and we are still waiting for the new IRP. The latest of the many drafts of the much-promised and long-delayed update contains a major annual cap on renewable energy to protect coal.

White monopoly capital” confirms the government’s protection of coal. The most archetypical white monopoly capitalist, Anglo American, tells us this. A recent Business Day article, titled “Anglo plots SA coal exit”, reports that South Africa’s largest mining investor and its biggest mining company had sold all its thermal coal mines as part of its planned coal exit. Arguably, the second most notorious embodiment of “white monopoly capital”, the banks, both internationally and at home, have identified coal as a major stranded asset that will not (normally) be funded. Indeed, the banks’ growing cooling towards coal resulted in Enoch Godongwana, ANC NEC member and chairperson of its National Economic Transformation Sub-committee, terrifying South African big business and financial institutions by threatening to use prescribed assets to fund coal developments, if banks refuse to do so.

So, if monopoly capital is abandoning coal, who is the rescuing suitor? Seriti Resources, a black-owned company that produces 23% of South Africa’s electricity.

Thanks to government-mandated Black Economic Empowerment (BEE), coal remains King in South Africa. This, in turn, strongly suggests that BEE, in this greatly foreshortened account, is a major – if not, the major – reason why South Africa, rather than being a leading driver in the worldwide, government-financed and -supported rush to electric cars, is, instead, a stranded bystander.

South Africa’s self-imposed absence from the 2nd car revolution involves a striking opportunism; the opportunism shared by those governments financing the quickest possible transition to EVs. In South Africa, race is opportunistically used to promote class (by levering the asset of colour to access the capital needed to become, in the words of former president Thabo Mbeki, the “black bourgeoisie”); in the rest of the world, climate change is opportunistically used to camouflage the catastrophe of private cars, whether or not electric.

In South Africa, the proclaimed imperative of a racialised “transformation” is opportunistically used to promote coal at the expense of electric cars; in the rest of world, the reality of stagflation, the normal state of monopoly capitalism experienced by most people as austerity or unemployment, opportunistically legitimises the vast expenditure on electric cars by governments that, besides ignoring their own climate change commitments, invariably plead poverty. DM

In other news...

South Africa is in a very real battle. A political fight where terms such as truth and democracy can seem more of a suggestion as opposed to a necessity.

On one side of the battle are those openly willing to undermine the sovereignty of a democratic society, completely disregarding the weight and power of the oaths declared when they took office. If their mission was to decrease society’s trust in government - mission accomplished.

And on the other side are those who believe in the ethos of a country whose constitution was once declared the most progressive in the world. The hope that truth, justice and accountability in politics, business and society is not simply fairy tale dust sprinkled in great electoral speeches; but rather a cause that needs to be intentionally acted upon every day.

However, it would be an offensive oversight not to acknowledge that right there on the front lines, alongside whistleblowers and civil society, stand the journalists. Armed with only their determination to inform society and defend the truth, caught in the crossfire of shots fired from both sides.

If you believe in supporting the cause and the work of Daily Maverick then take your position on the battleground and sign up to Maverick Insider today.

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