Fiscal Policy and a Just Energy Transition

The paper proposes a state-led fiscal strategy for South Africa's energy transition, centered on a climate response fund. It recommends mobilizing domestic resources through carbon taxes, fuel levies, and mineral royalties, alongside the issuance of climate bonds. The goal is to protect vulnerable workers, particularly in coal-dependent regions like Mpumalanga, and provide an estimated R100 billion annually for climate priorities.

• South Africa should establish a climate response fund supported by specific earmarked revenues: 30% of the General Fuel Levy (which earned R93 billion in 2023/24), all mineral and petroleum royalties (estimated at R15 billion annually), and half of the revenue from a progressive carbon tax.
• To fund renewable energy infrastructure, the document recommends the issuance of government-issued climate bonds to create a predictable and credible funding mechanism.
• Fiscal reforms, such as capping retirement contributions, could generate R20 billion annually to be redirected toward climate action.
• A worker-centric approach is necessary to support vulnerable workers in coal-dependent areas, specifically mentioning Mpumalanga, to ensure that poorer households are not disproportionately affected by the transition.
• The proposed fiscal measures could result in an estimated R100 billion annually being allocated to climate priorities.

APA

iej_admin (2025). Fiscal Policy and a Just Energy Transition. Institute for Economic Justice. https://iej.org.za/resource/working-paper/fiscal-policy-and-a-just-energy-transition/

Chicago

iej_admin. Fiscal Policy and a Just Energy Transition. Institute for Economic Justice, 2025. https://iej.org.za/resource/working-paper/fiscal-policy-and-a-just-energy-transition/.

Wikipedia

{{cite report |last1=iej_admin |title=Fiscal Policy and a Just Energy Transition |publisher=Institute for Economic Justice |date=28 February 2025 |url=https://iej.org.za/resource/working-paper/fiscal-policy-and-a-just-energy-transition/ |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{iejadmin2025fiscal, author = {iej\_admin}, title = {{Fiscal Policy and a Just Energy Transition}}, institution = {Institute for Economic Justice}, year = {2025}, month = feb, url = {https://iej.org.za/resource/working-paper/fiscal-policy-and-a-just-energy-transition/}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }