The flow of funding to energy transition initiatives in rich countries could pose a threat to SA and other developing economies, says public enterprises minister Pravin Gordhan.
Referring to the US Inflation Reduction Act, which set aside about $369bn for spending by the state on a range of projects, including many in the green economy, Gordhan said a “huge concern” is that such spending in developed economies could see these countries “outsmart and outrun everybody else”.
This could lead to “green nationalism” where a country such as the US with “lots of money” to advance technological developments uses it for its own benefit and doesn’t “treat this as a public good that the whole world needs to have access to”.
Gordhan has been sceptical before about the landmark climate finance agreement SA reached with rich nations in 2021. France, Germany, the UK, the EU and the US would mobilise $8.5bn to support SA’s move to renewable energy.
Commenting on the Just Energy Transition Partnership announced at COP26 in Glasgow, Gordhan expressed doubt that rich nations would stick to their word. He cited experiences with Covid-19 and vaccine access where rich nations failed to provide developing countries with fair access to Covid-19 vaccines and the technology to manufacture it at the height of the pandemic.
Speaking at an engagement session in Mpumalanga among Presidential Climate Commission members, senior Eskom representatives and people from communities near the recently decommissioned Komati power station last week, Gordhan was wary of the degree to which developed countries will share new technology that can take forward the transition from fossil fuel-dominated energy to renewables.
Green nationalism, explained Gordhan, is when citizens of a country develop new technology and then end up “dominating green technologies”, which they “don’t share with the rest of the world”.
“You have an island in the US or in any country that matches the US, where lots of money is available, technological developments take place, but they only use it for their own purposes and don’t treat this as a public good that the whole world needs to have access to,” he said.
Gordhan admitted, however, that SA should move faster in implementing its own just transition plans.
“What we are lacking at the moment in SA, and in this process, is urgency. And time frames tend to be very elongated. And we’ve got to find a way of doing things more quickly, learning more quickly, executing more quickly the ideas that we have, because we don’t have all the time in the world,” Gordhan said.
In mapping out its own transition, SA has to be mindful of what is happening in other countries, particularly how this could affect its ability to trade internationally, he said.
EU barrier
New regulations by the EU that will penalise exporters from high-emissions countries through the introduction of carbon border taxes could soon pose a significant barrier to trade for SA businesses that rely on coal-fired electricity.
The implementation of the EU’s carbon border adjustment mechanism (CBAM), and the UK and EU’s plans to ban the import of internal combustion engine vehicles from 2030 and 2035 would mean that certain goods manufactured in SA would be denied entry into these markets.
This would have serious implications for SA, and it is one of the reasons SA needs a clear plan for a just energy transition, Gordhan said.
But the just transition also represents a moral obligation to act now to keep the effects of climate change within limits that would “make [the planet] liveable for future generations”.
“The just energy transition will introduce, I think, great opportunities for all of us to work together to make sure that we keep up with changes the world requires, [and] the planet requires,” he said.
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