South Africa has comprehensive policy tools to respond to climate change adaptation and mitigation needs but timely access to funding remains a major impediment to implementing the country’s Just Energy Transition Implementation Plan.
Mr Cedric Frolick, the House Chairperson for Committees, Oversight and ICT in the National Assembly made these remarks at a COP28 Global Legislators Organisation’s event under the theme: “Just Transition: A parliamentary perspective on South Africa’s progress towards meeting the goals of the Paris Agreement.”
The COP28 conference is currently underway in Dubai where a multi-party delegation from both Houses of Parliament is attending as part of the national country delegation.
Mr Frolick stressed the need for blended finance to help South Africa achieve its transition towards a low-carbon economy. Currently, South Africa has only raised about $11 billion (R205 billion), which makes up only 13% of the required $86 billion (R1.6 trillion) needed for decommissioning of coal power plants, the expansion and strengthening of the transmission and distribution infrastructure and economic diversification of affected mining towns. The breakdown of the finance already raised showed that 81% is in loans, 4% is grants, and 15% is guarantees. “Unless we meet the financial commitments for the Just Transition programme it will be difficult to meet our 2030 and 2050 targets. It is also a concern that the majority of commitments made has been in the form of concessional loans which might place an unintended burden on the fiscus in the long term,” Mr Frolick told delegates.
To prevent the unintended consequences of decommissioning of power plants, Mr Frolick called for urgent reskilling of workers in the affected mining towns, majority of which are in Mpumalanga. According to Mr Frolick, training and upskilling will provide concrete alternatives to low-skilled workers and downstream economies that have benefited from fossil fuels and will give assurances that the transition will be inclusive and just. “The basics need to be right, because if we continue on this trajectory and leave people behind then our people will not accept it,” he said.
He told delegates that achieving a balance with this called for a blended finance model. This, he said, will help de-risk climate change ventures and will encourage private capital to invest and help drive forward mitigation and adaptation solutions.
Mr Frolick reaffirmed South Africa’s commitment to limiting temperature increases to 1.5°C through the implementation of the Just Energy Transition Implementation Plan. This plan seeks to, among others, have emission reductions through decommissioning of six coal power stations by 2030, and a further seven coal power stations by 2050. This plan, however, has inherent risks, including creating ghost towns and job losses in the energy sector and downstream economies. It is projected that up to 48 500 jobs are expected to be lost if the government meets its target of decommissioning six coal plants by 2030.
He also stressed the critical role of focused oversight in ensuring an equitable, inclusive and just transition. Mr Frolick underscored the oversight role of parliamentarians to ensure workers and communities affected by mitigation-induced economic shifts are supported and that climate change projects are well-managed, just and equitable. Parliamentarians must also assess if opportunities resulting from the transition contribute to a positive and transformed economic outlook, he said.
Mr Frolick also said parliaments must heighten oversight to ensure that there is greater transparency in the details of the available climate finance and the affordability thereof.
He said the transition also provides an opportunity for greater trans-boundary collaboration between South Africa and Southern African Development Community countries to scale up renewable energy generation and transmission to those countries with higher demand. According to Mr Frolick, the education sector must also be involved to contribute by developing the expertise necessary to drive a greener economy.
He concluded by stressing that while the down-scaling of coal use is part of the just transition, adequate support for vulnerable workers and communities should be prioritised before the coal power stations can be decommissioned.
ISSUED BY THE PARLIAMENT OF THE REPUBLIC OF SOUTH AFRICA
