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What should South Africa do?

1

Enhance its NDC to be 1.5 degree aligned by COP28:

Committed to NZ by 2050, SA must implement JT to meet the “near 1.5oC aligned” end of its NDC range, including:

  1. Aligning sector policies with a robust climate regulatory system • JT Framework alignment of sector policies, particularly Energy; ZEVs and transport; agriculture; building; and industrial policy
    • Finance the JT: Cabinet decision – all Ministers to integrate JT Framework Action Plans in budgets. Finalise the JET-P and implement the Investment Plan. Restructure Eskom
    • Coherent Climate Change Regulatory System: Enact the Climate Change Bill. Resolve contradictory regulations and authorisations, particularly oil and gas investment. Implement Green and Transition Taxonomies. Increase the carbon tax
  2. Progressive international engagement advocating developing country needs, particularly the global financial sector’s climate response, including:
    • Alignment of financial flows with a just, resilient, 1.5°C-aligned path
    • Ending fossil fuel subsidies and new exploration/production funding
    • Decarbonise investment and lending that does not result in disinvestment in developing countries
    • Securing real adaptation and loss and damage finance
2

What should you know about South Africa?

  • An ageing coal generation system has led to rolling blackouts for months on end, dampening economic activity and prompting rapid policy changes to allow an increase in installed RE generation
  • Overriding development priorities: SA is among the most unequal societies globally with accompanying extreme poverty and unemployment. This informs overriding policy priorities
  • Constrained fiscal space: Categorised as emerging and middle-income, the economy is constrained by high and rising debt, weak economic growth, poor credit ratings, corruption, old and degrading power infrastructure. Importantly, this hinders access to finance for climate action in the context of a JT
  • Progressive commitment/poor implementation: A fragmented regulatory landscape and strong non-progressive civil society and private sector lobbies undermine public and private sector climate action
  • Coherence of policy with climate commitments: Inclusion of the PCC in the Climate Bill intends to synergise currently fragmented and often contradictory climate-relevant policy, law, and decision-making. The recently declared State of (electricity) Disaster potentially puts this at risk

Recent developments, threats and levers for action

Domestic climate politics face the difficulty of translating international climate rhetoric and commitment into concrete action in the context of a JT. In this regard:

  • Some positive developments and levers for change are underway, including cabinet approvals of the JT Framework, SA’s Investment Plan guiding the JET-P, and Climate Change Bill progress (albeit slow). The PCC has launched research and public consultations aimed at climate mitigation, adaptation and resilience, and JT finance implementation
  • However, finalizing a credible JET-P and JT framework action plan may be compromised with the resignations of Andre de Ruyter, Eskom CEO and Daniel Mminele, head of the Presidential Climate Finance Task Team that is creating policy uncertainty
  • This uncertainty is exacerbated by the declaration of a electricity National State of Disaster with a new Minister of Electricity in the Office of the President. Some are warning against the potential for corruption as seen with the Covid State of Disaster, as well as providing space for the coal and gas lobbies and other sector policy decisions inconsistent with the county’s NDC and LTS commitments

Strengths

  • Improving political profile of climate change as part of “Just Transition”
  • The Presidential Climate Commission has shifted to action planning
  • Energy regulatory reform has stimulated private investment in embedded RE; REIPPP projects have been approved and there is a new Ministerial determination for future REIPPPP projects
  • National Treasury has implemented carbon pricing, a green finance taxonomy and the Sustainable Finance Initiative

Opportunities

  • Resource: Extensive RE potential; large scope for energy efficiency
  • Regulatory reform: removal of licencing threshold to open private sector energy market and stimulate investment
  • Resilience with job creation co-benefits: new industries, agricultural practices, regenerative land use etc.
  • Finance: JT framework finance chapter includes eliminating perverse subsidies; both government and private finance beginning to focus on climate disclosure

Weaknesses

  • Lack of integrated planning with contradictory sector policies and decisions.
  • Ongoing electricity crisis risks of social and political unrest.
  • Private sector lobby holds undue influence over policy decision making, including JT policy positions of organised labour.
  • Fiscal constraints: Middle income status and debt burden limits access to finance for the JT, far in excess of what is provided for in the JET-P ($8.5 billion)

Threats

  • National electricity State of Disaster and new Electricity Minister creates uncertainty; support for new coal and gas; oil & gas exploration; and corruption opportunity
  • Resignations of Eskom CEO and Head of PCFTT compromises credibility of JET-P and JT implementation Minister of Energy is pro-coal, oil & gas High debt burden and upper middle income country status constrains fiscal space to support climate action or receive the external financing

About Climate Diplomacy Snapshots

The data is clear. Accelerated and enhanced action is needed now to build resilience and avoid the worst impacts of climate change. As they seek to address the ongoing health, economic and social impacts of COVID-19, the Ukraine-Russia war and growing climate change impacts, governments should seize opportunities to invest in a recovery that will build social, economic and climate resilience on the long-term. The Climate Diplomacy Snapshots aim to provide the climate community with a clear overview of what each country should do, on climate and recovery, to pursue these joint objectives and keep the global average temperature increase to 1.5°C. Each has been prepared with the help of national experts, and will be regularly updated. The snapshots aim to support climate advocacy in the lead up to COP28.

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