Q: You’ve been a strong advocate that SA doesn’t need to take decades to achieve a so-called just transition and that we should be moving faster towards a more sustainable power generation system. Can you unpack this stance?
A: We do not advocate an immediate transition. We advocate action in alignment with climate science, which means that global emissions must be reduced by 45% by 2030. SA is the 13th largest greenhouse gas emitter globally, with the 38th largest per capita emissions (higher than China and India), the most carbon-intensive economy in the G20 (Group of 20), and the highest reliance on coal. This poses enormous risk to our economic competitiveness as our trade partners will increasingly seek to source imports from low-carbon economies.
The world is already transitioning. For example, the sale of internal combustion engine (ICE) vehicles will be banned in the EU from 2035. All the vehicles manufactured in SA are ICE vehicles, 77% of which are exported to Europe. If we do not adapt, we are placing at risk a sector that contributes over 4% to GDP and directly employs over 100,000 people.
As far as I’m aware not a single economy on earth has managed to industrialise or achieve a high standard of living without using fossil fuels. Is it realistic to expect one of the poorest regions on earth — Sub-Saharan Africa — to achieve this when the world’s most developed nations couldn’t do so?
Renewable energy is now the cheapest form of energy, and it is hard to understand why anyone would advocate Africa’s future development to be reliant on fossil fuels, which are now the most expensive method of power generation. Rapid and extensive scaling up of renewable energy generation is the most cost-optimal energy pathway for the continent.
It is unrealistic to expect the rest of the world to treat SA as a developing nation in terms of emissions when we have one of the most carbon-intensive economies on earth. For over a century, SA has had unlimited access to coal, but has still failed to generate prosperity for the vast majority of the population. The past and present offer no templates for the future — tackling our systemic inequality, unemployment and poverty demands radical changes in the structure of our economy.
What’s the point of forcing listed companies to stop funding fossil fuel projects when it could result in more unemployed people who end up chopping down trees to cook their food and keep warm at night?
We have never asked any listed company to stop funding fossil fuel projects in the near term. We ask for science-based targets to reduce fossil fuel funding over time. The idea of a just transition is that it will be carefully managed, over a period of decades to limit negative outcomes. The Presidential Climate Commission’s framework for a just transition addresses the reskilling and upskilling of existing coal workers so that they are better equipped to navigate the transition.
It is unfortunate that coal workers dominate the discussion about the just transition, when there are so many other jobs at risk if we fail to act — like those in the automotive sector, as discussed above.
What is Just Share’s stance on the funding of coal projects in SA, whether this be new coal mines or new coal-fired power generation?
For the foreseeable future, SA will still require existing coal-fired power generation, which necessitates coal mining from existing mines to supply Eskom. SA is still highly dependent on coal not because this is our best or cheapest option, but because political interference has prevented sufficient investment in renewable energy. Our past mistakes are a poor basis to argue for further investment in fossil fuels.
Banks are aware of the risks associated with continued financing of coal and are highly unlikely to be involved in new coal financing in the future. Nedbank, FirstRand, Standard Bank and Absa have all ruled out further financing of coal-fired power generation; and Nedbank and FirstRand have gone further, excluding investment in new coal mining.
Is it really practical for SA to transition to renewables almost overnight? Isn’t this why Europe is in trouble now that Russia has turned off its gas supplies?
It would be impossible to transition our power grid almost overnight, and no-one is suggesting we can. The Just Transition Pathways project estimates that we need to be building 6GW-7GW of renewable energy every year for the next 30 years just to decarbonise the power sector — more than we have built in the past decade. The longer we wait to get started, the more difficult it will become to achieve this.
Europe is not in trouble because it has transitioned its power grid to renewables. The European energy crisis is partly a result of European countries being highly dependent on fossil gas provided by a country which is now using that gas as a geopolitical weapon. Some European countries have temporarily returned to the use of coal-fired power to supply energy for this winter, but they are also accelerating their plans for a massive increase in renewable energy to avoid being held to ransom by fossil fuel dependence in the future.
Isn’t it hypocritical of the EU to threaten countries like SA with higher tariffs if they don’t transition to more sustainable options when they themselves were only able to do so because they’re getting cheap natural gas from Russia?
Tariffs like the carbon border adjustment mechanism (CBAM) are aimed at reducing “carbon leakage” i.e., to prevent reductions in emissions in the EU being negated by increasing emissions in non-EU countries. Whether it is hypocritical or not is beside the point, because countries like SA can’t control it. The CBAM is another illustration of the fact that the transition is already under way, and we simply have no choice but to adapt.
Just Share has been quite critical of Standard Bank’s refusal to rule out funding of the East Africa Crude Oil Pipeline (Eacop). How can Standard Bank refuse involvement in a major economic project for Uganda, a country where more than 40% of people live in poverty?
It is far from certain that Eacop will have long-lasting positive development impacts on Uganda or the region. The pipeline is being built to export most of the oil out of Africa, and it is valid to question whether the revenue from those exports will be used to benefit people living in poverty. Uganda has already had to renegotiate terms with TotalEnergies, terms less favourable to Uganda. The pipeline development in Murchison Falls National Park is already disrupting tourism, one of Uganda’s most important sources of revenue.
And the government and TotalEnergies’ commitment to benefiting the poor has already been called into question by reports from multiple international human rights organisations and local NGOs about poor treatment of those who are being displaced by the pipeline construction, and the government’s persecution of those who speak out against it. And we haven’t even started to talk about the climate impacts.
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