Prematurely shutting down emissions-intensive, trade-exposed sectors could trigger major economic fallout, including a GDP decline of more than 10% and a 9% drop in employment, business leaders warned at the national ministerial stakeholder consultation on Monday.
Speaking on behalf of Business Unity SA (Busa) ahead of the COP30 summit, Shamini Harrington said the current emissions trajectory risked closures, job losses and economic contraction, citing independent modelling that underscored the cost of an unmanaged transition.
“We urge [the] government to adopt a phased, flexible and incentive-based mitigation framework that reflects central differentiation and allows for realistic decarbonisation aligned with technology readiness and market demand,” she said.
Harrington emphasised that SA’s updated Nationally Determined Contribution (NDC) — the country’s emissions pledge under the Paris Agreement — must remain “conditional on the receipt of adequate financial, technological and capacity support”. She warned that setting rigid targets without the necessary resources could have unintended economic consequences.
One of the most pressing external risks identified by business is the EU’s Carbon Border Adjustment Mechanism (CBAM), a carbon tariff that will affect SA exports in carbon-intensive sectors such as steel, cement and fertilisers.
“The impact of CBAM on business is profound, impacting financially, operationally and from a human perspective. Business is preparing for CBAM implementation and continues to reduce its emissions trajectory. However, a defensive strategy alone is not enough, and therefore we call for the advocacy approach to still continue,” Harrington said.
“We’re urging government to exhaust all diplomatic avenues to secure a fair CBAM deal, whether that’s a longer transitional period, recognition of our unique system or financial support aligned with the promises of climate finance.”
Despite these challenges, Harrington reaffirmed that the private sector is firmly committed to a net-zero future. She said many companies were already investing in energy efficiency, renewables, green hydrogen, and sustainable aviation fuels, and are actively working to reduce their emissions.
However, she stressed that SA could not rely on international climate finance alone. With global funding pools tightening, business is calling for a bottom-up domestic financing strategy “developed in partnership with industry, with clear costing, contingency planning and alignment to articles 9, 10 and 11 of the Paris Agreement”.
Articles 9, 10 and 11 focus on ensuring developing countries receive financial support, access to climate-friendly technology and capacity-building assistance to effectively implement climate action.
“We are ready to lead, invest and innovate, but we must do so in a way that preserves economic stability, protects jobs and ensures energy security,” she said.
“COP30 in Belém, Brazil, presents not only a global milestone, but a national opportunity to re-emphasise our climate ambition to enable a just, feasible and economically resilient transition.”
