UK, US, France, Germany and the EU to assist SA in making the shift. From Moneyweb.
President Cyril Ramaphosa announced on Tuesday that SA has concluded a historic agreement to secure R131 billion to finance the country’s transition to a low carbon economy.
A statement from the president’s office says partner countries – the US, UK, France, Germany and the EU – will mobilise $8.5 billion (R131 billion) over the next three to five years through a range of financial instruments, including grants and concessional finance, which typically come with softer terms than normal market-related loans.
The announcement comes shortly after the COP26 United Nations Climate Change Conference kicked off in Glasgow, Scotland on Sunday (October 31).
The event is a follow-on from the COP21 conference of 2015 that resulted in the Paris Agreement where signatory countries agreed to limit global warming to below two degrees and to make more money available to deliver on these aims.
COP26, which was delayed for a year due to the Covid outbreak, is where countries are expected to update their plans for reducing carbon emissions.
The goal is to achieve ‘net zero’ emissions by the middle of this century by accelerating the phase-out of coal, curtailing deforestation, accelerating the switch to electric vehicles and encouraging investment in renewable energy.
A big moment for SA
Tracey Davies, executive director at climate activist group Just Share, says this announcement represents a big moment for SA, and a significant shift in political will on climate action.
“For months, the government has been saying that the country needs support from the developed world to help us transition to a low-carbon economy,” says Davies. “It now has that support, and so there are no more excuses.”
She adds: “To maintain credibility and trust, and to ensure that this is only the beginning of just-transition investment and financing, the money must be spent transparently, and with a focus on social and environmental justice for the most vulnerable.
“It must not be used to subsidise business as usual for big polluters, enrich politicians or corporate elites, or for investment in gas.”
Alex Lenferna, a campaigner at climate activist organisation 350Africa.org, says if done right, this deal could pave the way to a renewable energy future that works for all.
The ‘biggest obstacle’
“To help make such a reality possible, the Climate Justice Coalition has been calling for a Green New Eskom suited to the demands of the 21st Century,” says Lenferna.
“We have also been protesting the biggest obstacle to change, namely Minister [Gwede] Mantashe and his Department of Mineral Resources and Energy.
“They want to keep us locked into outdated, expensive and polluting coal and gas, rather than embracing the cleaner, more affordable and job-creating energy future that could be unlocked.”
Renewable energy might not be enough
However, not everyone is convinced that renewable energy will deliver anything like what the country needs to sustain itself as it transitions to a low-carbon future.
Says Des Muller, spokesperson for the SA Nuclear Build Platform: “It’s great to see the earlier discussions [on climate change] materialise into a complementary partnership. I am however surprised that developed countries are trying to convince developing countries to repurpose their retired coal power plants with renewables. These sites were not selected for their excellent solar or wind resources, but for their abundant coal supplies.
“You would be lucky if renewables would replace even 10% of the capacity of the coal power plant,” says Muller.
“The skills developed in running coal power plants will be wasted on maintaining a solar power plant,” he adds.
“Small modular reactors would be better suited to repurposing a coal power plant. You enhance your energy security, drastically reduce your emissions and up-skill the existing workforce, which also aligns well with the intended objectives of this partnership.”
The announcement from the president’s office says the agreement just concluded was motivated by the need for international communities to collectively halve their greenhouse gas emissions by 2030, and achieve net zero emissions by 2050.
Care must be taken not to harm vulnerable communities
This must be a “just, equitable and inclusive transition for workers and affected communities so that all are protected against the risks and benefit from the opportunities presented by this transition, and no one is left behind”, reads the statement.
It recognises that the transition has the potential to negatively impact certain sectors of the economy, such as mining, energy, manufacturing and transport.
The plan envisages developing new economic opportunities such as green hydrogen energy and electric vehicles to soften the shift to a low-carbon future.
Efforts will be made to protect vulnerable workers and communities, especially coal miners, women and youth, while at the same time stimulating jobs and business creation through decarbonisation and the shift to alternative energy sources.
A task force is to be created and will have six months to plot the way forward, set the terms of finance, and identify initial sources of finance.
Within a year, a more comprehensive financial plan for reducing Eskom’s financial sustainability will be proposed, while means of addressing the country’s longer-term funding needs to lower emissions will be devised.