In the wake of Covid-19 corruption scandals, the R1.5-trillion purse attached to SA's Just Energy Transition-Investment Plan (JET-IP) plan will need tight governing.
It could also be undermined by political tension in the ruling party, but it’s a crucial plan for the way forward: SA is the largest carbon emitter in Africa and one of the most unequal countries in the world.
According to President Cyril Ramaphosa, the plan — which needs R1.5 trillion over the next five years — addresses both issues.
It was presented by Ramaphosa at COP27, to much support from developing nations that have contributed, and covers three priority sectors for finance: the energy sector, electric vehicles and green hydrogen.
Already $8.5bn has been mobilised by the International Partners Group (UK, France, Germany, US and EU) to “catalyse the first phase of the programme”, according to the IPG.
Wikus Kruger, an expert in power sector investment at the University of Cape Town’s Graduate School of Business, said: “A real risk is corruption and rent-seeking in the case of SA. We saw with Covid-19 how much funding for incredibly important purposes was meant to be ring-fenced and monitored but was then not used the way it was meant to be.”
He said it was understandable that the public would be “worried”.
In a more than 200-page document, the presidency outlined the full JET-IP, which included a pledge that it would set “exemplary governance standards from the outset, tracking performance in all relevant indicators”.
The document says SA will follow “emerging global practices” that move away from a top-down approach, where decisions are made at national level, and will instead adopt a hybrid governance structure for its decarbonisation programme, so that “decision-making is shared between national and subnational arenas, with a diverse set of actors involved at each level”.
Theophilus Acheampong, a political risk analyst from the Africa Policy Research institute, said Africa emits the least but stands to experience heavy climate change impact.
“On a per capita basis, the emissions have barely increased in the past three years,” he said.
SA, however, is an outlier and accounts for 40% of the continent’s total emissions.
Britta Rennkamp, a climate policy researcher at the African Climate and Development Institute at UCT, contributed to the report of the Intergovernmental Panel on Climate Change at the UN ahead of COP27.
She said this week: “The energy intensities of the SA economy are very high and translate into per-capita emissions similar to Germany.”
According to the report, the country emits 0.6kg CO2 per dollar of GDP, while 55% of people live in poverty, 10% of the population own 86% of the aggregate wealth, and unemployment is above 30%.
Rennkamp highlights the importance of the document but warns of political tension that could undermine it.
“I think with agreeing on this plan and accepting the finance, the SA government has made a commitment to moving ahead and has done a lot of work in thinking through the implications (socioeconomic and financial) of energy transitions in electricity, transport and hydrogen.”
But, she adds, “all international eyes are on JET-IP”.
“There are still factions in the ruling party, so many are asking if the plan will survive and if those funds will be saved.”
She asks: “Will the ANC government, divided as it is, and the president with his thin majority standing for election and the looming Phala Phala report, continue to support this beyond the election, or will the competing faction put the transition on hold, as happened under the Zuma years?”
Already there is tension around renewed calls by minerals and energy minister Gwede Mantashe for fracking proposals in the Karoo.
This focus on fossil fuels like oil and gas undermines the decarbonisation process and the JET-IP. Rennkamp said: “It seems like there is a political chess game in the ANC, and any of those moves have a butterfly effect that could impact the JET-IP. Karoo fracking is part of a political game.”
According to social scientist Nikiwe Solomon, an environmental anthropologist at UCT, it is crucial to take a long-term view of the transition from coal.
“We need to think about just transitions without just focusing on the economic aspects. We need integrative thinking. If we look at the wind farms on the Garden Route, for example, we see people were moved so wind farms could be built, but do the people who were made to move benefit from this or have access to that energy?”
The department of minerals, resources and energy, under Mantashe, declined to respond to questions by TimesLIVE Premium.
