Overview
A transition to a lower carbon economy is occurring rapidly around the world.
With the return of the United States, 190 countries are now Parties to the Paris Climate Agreement, binding themselves to the goal of limiting greenhouse gas (GHG) emissions to well below 2°C (preferably to 1.5°C), compared to pre-industrial levels.1 National action plans are in implementation. Market shifts, too, are reflecting the urgency of redirecting priorities as financial flows and consumer preferences shift towards lowcarbon and climate-resilient products and investments.
The transition is being driven both by a realisation of the urgency required to save our environment and by economic reasons.
Climate change is already responsible for an increase in natural disasters, permanent loss of flora and fauna, destruction of agriculture and enormous immediate costs to society. As the threat to human survival and well-being has become more evident, attitudes have shifted and climate action is moving up on the priority list.
In parallel, the cost curves of cleaner energy and transport are diminishing. Combined with new technologies and business models, solar and wind power generation, and electric vehicles, for example, are rapidly replacing the industries for petroleum, coal and traditional combustion engine vehicles.
A transition to a lower-carbon economy is particularly urgent for South Africa.
The country is highly vulnerable to both the physical and transition risks of climate change and this has consequences for employment. Physical risks include, for example, more-intense storms, floods and droughts, soil erosion and runoff, and water scarcity. Such changes affect South Africa’s agriculture and industries.
Transition risks generally refer to the costs associated with climate response measures. In South Africa, the focus is on the costs of moving away from the largest GHG emitters, especially coal. However, there are also costs and vulnerabilities that are incurred as South Africa’s export partners transition to lower carbon economies.
The South African government has adopted its own vision of a ‘just transition’.
Given the country’s context and circumstances, this has a distinctive meaning and unique focus. In this article we discuss what a ‘just transition’ means in the South African context:
The article concludes with the opinion that the more swiftly we move from dying industries and establishing South Africa among the frontrunners in growing industries, the better the chances of maintaining and creating sustainable jobs in the future. This, however, needs to be accompanied by training and reskilling programmes as well as a major increase in domestic and international investment in climate action, both by the public and private sector.
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PwC Africa ESG Platform Leader, Strategy& and Chief Economist, Strategy& South Africa
Tel: +27 (0) 82 708 2330
