Cutting through the COP – a five minute read on what it means for South Africa

With over 9 million online mentions of COP26 – that’s the UN Climate Change Conference taking place in Glasgow from 31 October to 12 November – already in circulation, you’d be forgiven for feeling a little lost in the hype. It is nonetheless a critical pivot point for South African (SA) businesses which operate in an economy – and energy system – that is one of the most coal-dependent in the world.

SA’s economy, on a per capita basis, is 25% more carbon intensive than China and double the global average – as well as accounting for about half the total carbon emitted by the African continent.  Add to that the sad state of Eskom and the increasing frustration and economic devastation wreaked by loadshedding, and this is a nation perched on the precipice of a potential social, environmental and economic implosion.

Yet another red flag is that in July this year, Minister of Forestry, Fisheries and the Environment, Barbara Creecy, proposed during a Climate Ministerial meeting hosted in London, that developed countries commit to a new collective goal of jointly mobilising $750 billion a year by 2030 towards aiding developing countries in climate mitigation investments.

This is a significant increase on the $100 billion a year previously proposed, and is a sure sign that she recognises there is no way SA can navigate the current climate change hurdles under its own financial auspices.  A successful COP26 is not just a nice to have for South Africa, it is clearly an urgent imperative.

The hype is arguably justified. But why?

• There’s a growing, more mainstream global movement calling for action on climate change. This is supported locally by The Department of Forestry, Fisheries and the

Environment publishing a draft Nationally Determined Contribution (NDC) in March 2021, outlining accelerated plans to reduce greenhouse-gas emissions by 2030.

• Increasing numbers of countries having committed to achieving Net Zero greenhouse gas emissions, with several thousand companies following suit.
• Major SA trade partners, such as the European Union (EU) planning carbon border tax regimes that penalise heavy emitters.
• Greater coverage and awareness of extreme weather disasters, which also appear to be occurring more regularly.
• Proof from the handling of the Covid-19 pandemic about how the world can collaborate when it is really needed.

It might seem rather ambitious but as host, the UK Government has made its agenda very clear for COP26. It has stipulated it would like to see nations in attendance commit to:

• Net Zero decarbonisation by 2050, with confirmation that countries will put in place (and crucially, deliver on) plans to achieve this.
• A temperature rise of no more than 1.5^o
• Phasing out coal.
• Phasing out cars fuelled by petrol or diesel.
• Stopping and reversing deforestation.
• A formalisation of the pledge of $100bn annually from developed nations to help poorer countries decarbonise.

Good news for Africa is that ahead of COP26, the Sustainable Energy Fund for Africa (Sefa) extended a $1-million grant to help accelerate African countries’ transition to flexible green grids and other clean power solutions.

However, it’s not all positive. That Vladimir Putin, Xi Jinping and Jair Bolsonaro may not attend as leaders of key emitting countries, could make reaching unanimous global agreement on some of these issues very tricky.

While SA’s policy plan around climate change mitigation focuses heavily on emission reductions achieved mostly via the energy sector, trying to tell which proposed innovations will work and how they can be scaled in the future is not going to be easy.

• SA has a 2050 Net Zero target but Minister Creecy has already conceded that the country’s draft Nationally Determined Contribution means the country is unlikely to reach net-zero in that timeline.
• In July 2021 Dr Stanley Semelane of the Council for Scientific and Industrial Research (CSIR) noted that the coal sector was the biggest mining contributor to gross domestic product (GDP) and the third-biggest employer when compared with other domestic mining activities. Summarily decommissioning coal would have far-reaching negative consequences for economic growth and unemployment.
• SA is still grappling with an economic recession and the need to rebuild the capacity of the State and its institutions following a decade of State capture. While starting to rebuild and transform the economy to make it resilient and relevant in a decarbonised world is a priority, it has to be balanced with the very real issue of ensuring that a transition from coal supports greater investment in renewable energy over time, without compromising the country’s energy security – or increasing joblessness.
• SA listed companies are still not required to report on climate-related financial disclosures, despite investors increasingly demanding climate disclosures as a condition for investment.

So, while some will say the political will, and even the funding, is lacking – and that our position on coal is inconsistent with that of our global peers – South Africa is actually in an advanced state of planning for climate change mitigation.  The thinking of what needs to happen is taking place, but the how we make this so called ‘just transition’ happen, while still ensuring we don’t compromise either our economic recovery or our citizen’s livelihoods, is the crux of the issue.

As such, it’s difficult to see the SA going further and tougher on domestic climate and energy policy as a direct output of COP26.

While there is certainly increasing awareness of climate change in South Africa, the stark reality of living in a country with overwhelming unemployment figures, loadshedding and food insecurity, means that most SA adults are more invested in day-to-day survival than they are in climate change.  Recent community protests in Saldanha and Nelson Mandela Bay calling on government to put economic opportunities for local communities ahead of the priorities of the ‘green elite’, demonstrates that for the majority of everyday citizens, lives and livelihoods currently take precedence over climate change.

This doesn’t mean that there isn’t there isn’t any public interest in the outcomes of COP26, after all it does take place at a time of ‘systemic nervousness’; people – shoppers, consumers, citizens – are anxious about a multitude of factors and the growing existential insecurity that these will bring.  The transition from concept to lived experience – from forest fires, drought and flooding, to the disruption of seasons and the erosion of life-sustaining ecosystems – means that now is probably the most important moment in human history for this conversation.

People want answers and solutions.  They want commitments and timelines.  A failure to deliver at COP26 could have consequences for an already anxious and fraught system of people, nations and administrations.

In many respects, COP26 is focused on developed world players trying to lever other countries up to (nearer) the levels they are setting, at least on paper.  Many countries may be required to commit to new targets, which they will then need to implement. This could lead to them changing their energy sources more quickly, to raising energy standards for consumer items, or to protect or set biodiversity enhancement requirements for land that might be used for commercial purposes. In fact, there are a myriad of new policies that countries may have to contemplate and deliver.

However, this may well have unintended negative consequences for emerging markets, who can feel held to ransom against developed world expectations that take no cognisance of on-the-ground realities.  For example, if the European Union’s consideration to implement a carbon export tax by 2023, as part of its ‘Fit for 55’ European Green Deal package, is implemented, this will see levies being imposed on imports in carbon-intensive sectors, such as steel, from countries with lower environmental standards than itself.

This can have far-reaching implications for countries who are not yet ready (nor have the treasury) to make the changes demanded. And it can in fact have a significantly negative impact on the ability for that country to successfully pursue its growth and socio-economic development targets – or to even compete equitably in the global marketplace.

COP26 is undoubtedly a seminal moment in our planet’s response to dangerous climate change, but it will affect SA and other African countries in different ways. It’s essential to establish how SA should approach engagements at the outset of the conference to manage internal expectations and to seize external opportunities following COP26.