Balancing climate transition with energy security

Wednesday, February 8, 2023

Minister of Forestry, Fisheries and the Environment, Barbara Creecy, has emphasised the importance of solutions that will balance energy security in the context of the climate transition to ease the physical and economic risks posed by climate change.

“If we fail to tackle the energy crisis, we know we will not meet our development targets. We will undermine our gross domestic product (GDP), and exacerbate our already high levels of poverty, inequality and unemployment.

“If we fail to mitigate greenhouse gas emissions and build domestic resilience to extreme weather events we risk damage to human health and well- being, built infrastructure, food and water security,” she said on Wednesday.

Addressing the Mining Indaba in Cape Town, the Minister said the issues of energy security and the just transition requires collective efforts and decisive action.

“Equally significant will be ensuring that as our major trading partners transition to greener forms of energy generation and industrial production, South African goods and services, all of which have a high carbon footprint, remain competitive.

“The European Union, a major trade partner is already introducing carbon border tariffs to protect investments in greener production from goods and services produced in carbon intensive economies.

“So understanding the physical and economic risks posed by the climate transition is essential as we start to position ourselves to approach the complex question of balancing energy security in the context of the climate transition,” the Minister said.

Building a low carbon economy

As the country negotiates its way through this complexity, a number of issues should be considered. They include building a low carbon economy; new opportunities for investment, employment and prosperity; regulations; finance and climate justice.

"Our government has never advocated a sudden or precipitous move away from either coal-fired generation or towards a low carbon economy. The National Development Plan and Eskom have talked about attaining net zero emissions by mid-century, nearly thirty years from now," Creecy said.

The Minister said building a low carbon economy and a climate resilient society will not happen overnight.

“It requires wide reaching technological, economic and societal changes. Changes that will build new forms of power generation, attract new investment in our productive processes, prioritise the needs of vulnerable workers, communities and social groupings. It is the task of a generation.

“This means as many commentators have said coal will remain part of our energy mix into the 2040’s, and improving the energy availability factor of our current power stations is a pressing imperative. But this doesn’t mean that we can just sit back and wait,” Creecy said.

Investing in renewables

She noted that India and China are already developing the biggest renewable generation programmes in the world.

“Yes, they are currently using coal. However, their renewable build tells us that they fully understand the economic transition risks that lie ahead, and they have absolutely no intention of being cut out of future trade markets,” the Minister said.

Addressing the issue of energy security and the just transition will bring in new opportunities for investment, employment and prosperity in the climate transition.

“For the mining sector these have to be in the so-called ‘minerals of the future’ and include rare earth minerals, lithium for battery storage and the platinum value chain where South Africa already has an established advantage.

“Mining houses such as Seriti and Anglo Gold have signalled their commitment to renewable energy by investing in solar and wind powered projects. Last year President Cyril Ramaphosa participated in the launch of the world’s largest hydrogen-powered mining haul truck at Anglo American’s Mogalakwena platinum mine,” the Minister said.

Accordingly, from an energy security perspective, significant opportunity also presents in wind and solar generation, the development of new green liquid fuels and the development of new forms of mining equipment using cutting edge technology in the green hydrogen value chain.

“Finance was one of the most heavily contested issues at COP27 [Conference of Parties] with developing countries putting up a significant battle to attract international support for both mitigation and adaptation. Unfortunately, concrete commitments for all developing countries were not forthcoming.

“In our case, outside of the formal United Nations framework, an initial amount of USD $8.5 billion has been offered by a number of developed countries through a combination of financial instruments including grants and concessional loans as a first small step to help finance the country’s just transition,” the Minister said.

She said prudent use of this initial investment could definitely attract further investment as there is interest and appetite amongst investors.

Climate Change Bill

“To create the necessary certainty to attract investment, and manage competing interests and stakeholders, a clear regulatory framework is required.

“The Climate Change Bill, which has been submitted to Parliament, aims to coordinate an effective climate change response. It supports the development of pathways to a low carbon future with a view to building social, economic, and environmental resilience, and an adequate national adaptation response,” the Minister said.

Last year government adopted the Just Transition Framework pioneered by the Presidential Climate Commission following extensive national consultation.

The framework highlights that climate justice will only be achieved if vulnerable workers and communities are included in identifying the transition challenges and opportunities of low carbon development pathways. –