South Africa's energy crisis and its implications for trade dynamics.
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Date
2024
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Publisher
University of the Western Cape
Abstract
Sustainable, efficient, and affordable access to energy is fundamental to encouraging, strengthening, and elevating trade-intensive industries, both domestically and internationally. Consequently, this has not been the case for South African industries as they bear the brunt and challenges of unsustainable, inefficient, and expensive energy, as a result of a 15-years plus and counting run of the ever-growing energy crisis. The crisis has proven to stunt growth and undermine the capacity of South African industries to contribute effectively to the nation's economy. This position has made it necessary to explore how the South African legal and policy frameworks in view of the significance of access to stable and affordable energy in relation to stability and competitiveness trade in South Africa. This study explored the implications of the South African energy crisis on trade dynamics. Investigating the relationship between sustainable and efficient energy and trade, the research seeks the potential benefit of reforming South African law and policies for trade. Using desktop research by gathering information and data from existing sources consisting of literature from primary and secondary sources, the study assessed the correlation between renewable energy policies and their adoption and the reduction of energy sustainability and efficiency. The study revealed that the energy crisis significantly affected trade to the point of economic deterioration. Data analysis demonstrated a reduction in a number of trade intensive sectors and GDP supporting the hypothesis that energy policies need to be reformed in order to have sustainable and stable energy supply. Because Denmark has achieved estimable success its intervention through legal and policy frameworks that promote renewable energy and reduction of fossil fuels usage, the study explored the Danish experience and draws lessons capable of being adapted to South Africa's unique situation.
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Keywords
Energy crisis, Trade dynamics, Energy policy, Energy security, Trade-intensive industries