Benedict Mongalo, Managing Director: Novare Impact Investment Partners
One of the most topical issues occupying the minds of leaders in governments, policy makers, corporates and scenario planners alike in recent times must undoubtedly be the adverse effects of global warming.
Apart from a few climate change denialists, there is general consensus in the scientific community that worldwide adverse and erratic climate conditions experienced in recent years are largely attributable to global warming.
The environmental campaigning organisation, Greenpeace Africa, conducted research and authored a report titled “Weathering the Storm – Extreme weather events and climate change in Africa”. The report provides valuable insights on historical drivers of extreme weather events and more importantly, it simulates how Africa might be affected by global climate change in the future. The picture is not looking good with records of observational data suggesting that extreme heat events may even lead to excess deaths on the continent.
Closer to home in South Africa, we have recently seen unprecedented floods in the province of Kwazulu-Natal and severe droughts in the Western Cape, but these events are neither isolated to the southern tip of Africa nor the African continent. Numerous European countries recently experienced unprecedented severe heatwaves, Antarctica is experiencing melting glaciers and sea ice which lead to rising sea levels, and the Americas have also seen rising temperatures. All these changes in weather patterns across the globe are well documented.
In view of the recent adverse weather events, there is consensus at least among policy makers that urgent intervention is required to limit the potentially harmful effects of global warming. Towards mitigating these unfavourable conditions, the Paris Agreement was adopted by 196 parties in 2015 at the 21st Conference of Parties (COP 21), in Paris. The parties are effectively sovereign states which include numerous African states as well as the regional bloc, the European Union.
The Paris Agreement is a legally binding international treaty on climate change whose goal is to limit the increase in global average temperature (global warming) to below 2-degrees Celsius, preferably 1.5-degrees Celsius, above pre-industrial levels. To be able to achieve this ambitious goal, greenhouse emissions need to be reduced by 45% before 2030 and reach net zero by 2050.
The transition goal to net zero emissions by 2050 is what has caused enormous debate, primarily on whether this necessary transition would be just, inter alia whether social justice considerations were factored in determining this target, and whether it is even possible. Some prominent people engaged in this debate such as the United States of America’s climate envoy and former Secretary of State, John Kerry, agree that the transition must be just. He further highlights that humanity does not have any other alternative but to intervene and ensure we reach this net zero target by 2050.
One of the arguments on the extreme end of the debate is often characterised by accusations advanced by emerging economies that historically, developed countries built their economies on the back of fossil fuel driven industrialisation, consequently damaging the planet; but now they want to impose perceived unrealistic targets on developing nations.
The other argument often advanced is that a continent such as Africa accounts for approximately only 3.8% of the planet’s carbon emissions and to achieve its often-canvassed economic potential, it requires a lot of energy. Given that Africa is endowed with natural resources, some quarters share the view that it is unreasonable to prevent it from fully utilising fossil fuels to achieve its economic developmental agenda.
Other moderate views suggest that the 2050 target is just way too soon, that the transition should take place gradually over time, and that the suggested three-decade timeline is unrealistic, especially in the absence of immediate equivalent alternatives.
Evidently, the arguments advanced are weighty issues which could potentially be a source for future confrontation amongst sovereign states, if there is no consensus on how to address them. In pondering these thoughts, one ought to ask what exactly is just transition, and what would it look like specifically for a poor continent such as Africa?
The phrase often used by various people to describe what they perceive to be just transition is that it should be “a transition that ensures that no one is left behind.” Broadly speaking, just transition would be the progression of societies that currently rely on fossil fuels or any environmentally unsustainable practices towards environmentally sustainable economies, in a manner that does not unjustly disadvantage them. This transition is also by no means limited to energy, which often takes centre stage of discussions, as it accounts for 73 percent of human-caused greenhouse gas emissions and is a primary economic driver.
What does just transition entail? Essentially, this is a call to afford countries that rely heavily on fossil fuels viable alternatives and sufficient assistance in replacing them. When one considers that countries such as Nigeria and Angola rely heavily on oil and gas resources for revenue and/or their foreign currency earning, and that South Africa relies on coal for its base load power generation; they cannot simply abandon these processes abruptly.
It is a fact that countries that have vast natural resources have built economies underpinned by these natural resources. In some cases, such as in South Africa, towns were built on the back of the discoveries of these commodities. For example, a town such as Witbank was built subsequent to coal mining discoveries and this resulted in the economic activity in the area.
This is not just a Witbank phenomenon but also in other countries, discovery of mineral deposits generally results in commencement of economic activity. Another example is Mozambique, where the immense find in 2010 of a natural gas field, and the subsequent liquefied natural gas (LNG) projects were poised to significantly benefit this impoverished nation economically and socially.
This implies that if these countries were to actively reduce production of these resources on quest to meet the net zero goals, the immediate economic activity and consequently the immediate societies would potentially be adversely impacted, assuming that no other alternatives are provided.
The International Labour Organisation (ILO) in their report titled “Guideline for a just transition towards environmentally sustainable economies and societies for all” suggests that in the transition to environmentally sustainable economies, the world of work can benefit from major opportunities such as net gains in total employment, social inclusion, and improvements in job quality amongst others. Admittedly, at this stage these benefits are not easily evident.
Rather, it is the potential challenges that are most evident and thus the view is held that there is more that needs to be done to crystallise the alternatives and the potential opportunities thereof. It is also apparent, as recognised by the ILO, that there is no “one size fits all” as each country has its own unique challenges, it may be at a different stage of development, it might have different sectors, and/or their degree of reliance to fossil fuels vary. All these dynamics would accordingly necessitate different solutions for each country.
Whilst there is ongoing debate and engagements around just transition, several countries are putting roadmaps and/or policies in place towards meaningfully contributing to this journey. What is clear is that the world is racing against time to ensure decarbonisation of the planet. The alternative of inaction is potentially dire for the planet.
We hold the view that the transition for the African continent and other emerging economies would require significant collaboration and financial resources from developed economies. The recent COVID-19 pandemic tested the collaboration between various sovereign states and/or regional blocs and it became evident that to resolve a global problem, global collaboration is necessary. An uninhabitable planet is a threat to the human species and similar to the recent pandemic, global warming presents challenges to all of the human race.
Whereas the Paris Agreement is a good framework to guide requisite measures to be taken by each of the signatories, the value of just transition strives to ensure that each country, particularly those that rely on fossil fuels, are assisted financially and otherwise, to reduce emissions without disadvantaging them. An analysis by Climate Policy Initiative, an independent advisory firm, projects the total cost of implementing nationally determined contributions (NDC) for climate action in African countries to be $2.8 trillion for 2020-2030, and 90% of this would require external financial support. The commitments made by African states under the Paris Agreement suggest that their energy requirements should be sourced from clean renewable sources.
However, in order to do so, African governments also need to take steps towards creating an enabling policy environment to support the achievement of NDCs. Although governments need to take the lead on goalsetting and process, involvement of the private sector, cities, and wider civil society, including youth, is essential for the design of a balanced and just transition process that is aligned with global goals and meets multiple economic and social priorities.
The other significant step, which is necessary, is that governments should ensure there is consensus with societies on the roadmap to environmental sustainability. In South Africa, for example, labour unions in the mining sector have already voiced their dissatisfaction and concerns about reduction of coal use/coal contribution in the energy generation sector. This is indicative of the fact that robust social dialogue needs to be expedited among stakeholders.
Whatever the outcomes of these ongoing engagements, the road to net zero 2050 would involve difficult decisions for governments.
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