Article by Audrey Rojkoff: the challenges of the just transition in South Africa

A process in 5 stages

By Audrey Rojkoff
Regional Director for Southern Africa,
National Director for South Africa for AFD (Agence Française de Développement)

 

1

Firstly, a political consensus for a country to take the decision to engage in a just energy transition. In South Africa, one of the highest greenhouse gas emitters and most unequal countries in the world, the political decision has been taken and is strong and unanimous. It has been prompted by the combination of external factors, such as the introduction of a carbon tax on the borders of Europe, its main trading partner, and internal factors, such as civil society demands to live in a healthy environment and benefit from a better sharing of opportunities.
There is agreement among all the various political parties, the various components of society and the various economic actors to engage South Africa on the path towards decarbonisation, which not only corrects inequalities, but also promotes social justice.

2

Yet things are not that simple and there is still disagreement over how the transition should be implemented, more specifically on its pace. Is it better to correct the trajectory in one go, take the climate emergency into account, simultaneously put together all the sectors of the economy, at the risk of sacrificing, at least temporarily, the workers in the most carbon-intensive sectors? Or is it better to first ensure that everyone can find their place, retrain people and convert territories, invent and adopt new technologies, before shutting down coal-fired power plants, at the risk of achieving this when it is too late?

3

Each just energy transition is different. The South African process cannot be replicated from country to country. Its starting point, its definition, its components, its issues, its pace, and the method for implementing a just transition are specific to each geographical, historical, political, economic, social and environmental context.

Each country must decide on its methods and its pace, choose their own trade-offs, make their own calculations, depending on the interdependence between their economy and the rest of the world and the structure of their society. It is essential to mobilise research for this, as South Africa has managed to do, in particular to measure the climate risks and their impacts on its economic and financial system.

4

But the public policy dialogue between countries remains useful. Most countries around the world are seeking this balance whereby people and nature prosper, where resources are consumed in a way that not only protects living beings, but also ensures that they thrive. The sharing of experiences, based on both successes and mistakes, will help all the partners make headway. It is the role of international institutions to encourage dialogue between national processes to support the stakeholders. France’s first policy-based loan in South Africa, via AFD, aims precisely to promote dialogue between our two countries. It is combined with support from grants which finance local research on the social impacts of the transition, the options for converting coal-fired power plants, the potential to create jobs and the opportunities to mobilise climate finance. The conclusions of this research will feed into the construction of the JET policy, inform political choices and contribute to defining the reforms to be implemented.

5

A South African investment plan is also currently being prepared. It will necessarily be scalable, depending on the broad policy outlines chosen. It will indicate how to implement the JET in practice and will express South African demand towards financial institutions. And we should certainly expect a demand for financial innovation, so that financing can support the JET and limit the obstacles to its ambition and its scale. Indeed, “transition finance” still needs to be devised, finance that would allow us to step up our partnership approaches, combine our instruments and expertise, mobilise the private sector and take more risks by trying to reach the most disadvantaged people.
AFD Group as a whole, with Proparco and Expertise France, aims to play its full part in this fascinating reflection.