Shameela Soobramoney, CEO of the National Business Initiative (NBI), says South Africa needs to “reorientate” its education system to provide skills for a low carbon economy as a matter of urgency.
“There is an urgency around the fact that the transition to a low carbon economy has already begun and the skills set is needed already.”
If the country is not ready to meet low carbon targets from 2030 the EU's Carbon Border Adjustment Mechanism (CBAM) will impose crippling tariffs, costing it export markets and jobs.
Modelling the NBI has done with its stakeholders around the 2050 carbon net zero deadline shows it's not only possible, but with the right polices and investments would be net jobs positive - and transitioning is economically imperative.
More focus on demand-led skilling could make our TVET college system so much more useful to the economy
— Shameela Soobramoney, CEO of the National Business Initiative
“While on the one hand we're deeply concerned about potential job losses in for, example, the coal value chain there's a lot to be lost in the rest of the economy by not transitioning.”
The opportunities created by transitioning could transform the economy, she says.
“We're well endowed with natural resources such as sunshine for renewables, and the manufacturing base we have could transition and open up new markets that are also transitioning. If we could do that and put in the right policies for localisation of value chains we could benefit from the jobs perspective. It's a massive opportunity to shape an economy that is going to be more future fit.”
Making the country's education system fit for purpose is an integral part of this.
“Currently our education and training system is not equipped to supply the skills we're already needing for this renewables-based future. We need to start looking at how this system can be used to produce these skills.”
The Just Energy Transition Skilling for Employment Programme launched by the NBI a month ago with the support of CEOs from at least 26 of South Africa's largest companies is an acknowledgment of the need for the private sector to work with government to address this challenge.
“Co-ordination is critical. Having a common vision and being on the same page as to where we need to go.”
Demand-led skilling is a must, she says.
“Producing skills in and of itself doesn't solve anything. Those skills need to be fit to be employed. That's where the private sector has a massive role to play.”
The current situation where people come out of the system with skills the economy doesn't need has exacerbated the unemployment crisis rather than solving it she says. That's why the private sector input the NBI wants to drive through its programme is key.
“More focus on demand-led skilling could make our TVET (Technical Vocational Education and Training) college system so much more useful to the economy. We need to make our technical education and training system far more fit for purpose.”
It would also help if TVET colleges were located more strategically to maximise opportunities for economic inclusion.
“Not everybody is going to come and live in an urban centre, so we need to start looking at how to develop township economies and SMEs using TVETS as hubs for skills that can be deployed into township SMEs, which could then form some of the supply chain into these new economic opportunities we're seeing in the transition.”
That is the kind of “intentional and purposeful” approach to inclusive economic growth that would give real meaning to the concept of a just energy transition.
“Moving to a low-carbon economy and having to meet EU targets presents a threat economically, obviously. But if we get our response right there is also a huge opportunity in new industries, new value chains, localisation of value chains and making use of what we're very well endowed with in terms of different resources that are all potentially going to be useful in a global transition and eventually position us as being quite competitive and give us that economic shift which is desperately needed.”
In spite of the potential opportunities opened up by the energy transition the EU, through its CBAM, is in effect forcing on South Africa, she believes trade and industry minister Ebrahim Patel's efforts to push back against this transition are not entirely unjustified.
Moving to a low-carbon economy and having to meet EU targets presents a threat economically, obviously. But if we get our response right there is also a huge opportunity in new industries
— Shameela Soobramoney
“We need to be careful about how we position that. There's a whole debate around the fairness of such unilateral measures and their timing and how it stands up in terms of WTO (World Trade Organisation) agreements.
“At the same time we shouldn't lose sight of the fact that the transition is an opportunity for us to look at our global competitiveness as an economy.”
She estimates that to be globally competitive in the new low carbon future by 2050, around 10,000 workers will have to be trained every year.
“Obviously, so much depends on having the right policy measures and enabling environment for that number to actually materialise.”
Having the government's just energy transition implementation plan in place at last, with which the NBI's skilling for employment programme is aligned, is a big positive, she says.
“At least now we have a view on three industries: renewables, green hydrogen and new energy vehicles (Nevs). It is also helpful in terms of being able to attract some of that international transition financing that is needed.
“As we see policy decisions that need to be taken around these for the enabling environment, hopefully we'll see more positives.”
Is South Africa moving ahead quickly enough with Nevs to attract this transition financing?
“That's a tough one. If we look at the measures for those export markets we produce vehicles for, with the EU and UK already saying they're going to be banning internal combustion engines from 2030, then we're exposed to losing those markets. We need to move more quickly, those time horizons are coming very fast.
“Reorientating an industry and supply chains and things like that is not something that happens overnight. At the moment it's a question whether we're going to be able to produce for those markets or whether we lose those markets.”
Soobramoney, the former head of sustainability at the JSE, says it's “difficult to say” if government shares the private sector's sense of urgency about moving to a low carbon economy.
“But judging by the departments we deal with I think it has increased.”
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