Search Climate Insights Directory

The policy brief examines the opportunities and challenges of a sustainable energy transition partnership between the African Union (AU) and the European Union (EU). It highlights Africa's vast renewable energy potential and the possibility of energy trade via Power-to-X technologies, while cautioning that the EU must avoid post-colonial rhetoric and provide tailor-made incentives for fossil-fuel-dependent African nations. The authors recommend joint vision formulation, large-scale green infrastructure investment through blended finance, and a focus on job creation and education to ensure a just transition.

South Africa's 2025 G20 presidency focuses on four key priorities: disaster resilience, debt sustainability for low-income countries, financing just energy transitions, and critical minerals for sustainable development. The presidency aims to elevate 'country platforms' like South Africa's Just Energy Transition Partnership (JETP) and bring African climate finance concerns to the forefront. The Sustainable Finance Working Group (SFWG) for 2025 is tasked with strengthening the global sustainable finance architecture, scaling up adaptation and just transition finance, and unlocking carbon market potential. The report highlights opportunities for South Africa to enhance follow-up mechanisms for G20 commitments, engage African Union (AU) structures, and coordinate with Brazil ahead of COP30. However, the report notes diplomatic challenges regarding the US presidency's approach to climate multilateralism and the Paris Agreement.

South Africa introduced a carbon tax in 2019 to meet greenhouse gas emission reduction targets of 34% by 2020 and 42% by 2025. The policy primarily targets the energy sector, which is responsible for approximately 80% of the country's emissions due to a heavy reliance on coal. While the tax aims to incentivize a shift toward renewable energy, it faces challenges including potential conflicts with WTO non-discrimination principles, the risk of carbon leakage due to a lack of border price adjustments, and negative socio-economic impacts such as increased consumer prices and potential job losses in energy-intensive industries like mining and steel. The document argues for a balanced approach that includes worker re-skilling, targeted incentives for renewables, and regional coordination through agreements like the AfCFTA to prevent protectionism and ensure a just transition.

The Institute for Economic Justice (IEJ) critiques South Africa's Just Energy Transition Investment Plan (JET-IP), a USD 8.5 billion deal with France, the UK, the US, and the EU. The analysis highlights that 81% of the financing consists of loans, with 89.4% targeted at infrastructure, leaving minimal funding for skills development (0.1%) and economic diversification (0.3%). The IEJ warns that the plan's reliance on 'de-risking' private investment through Independent Power Producers (IPPs) may lead to higher electricity tariffs, unsustainable sovereign debt from previous guarantee windows, and a failure to localize the renewable energy value chain. Furthermore, the document notes a lack of social security for workers in the Mpumalanga coal-belt, where up to 8,000 direct jobs could be lost. The IEJ advocates for a shift toward climate reparations, debt cancellation, and grant-based financing to ensure a truly just transition.

The G20 has transitioned from a narrow focus on financial stability (2005–2008) to an integrated governance model where energy security, climate action, and sustainable development are central. Key milestones include the 2009 Pittsburgh Summit's first mention of clean energy, the 2015 first Energy Ministers' Meeting, and the recent sequence of Global South presidencies (Indonesia, India, Brazil, South Africa) that have shifted the narrative toward equity, just transitions, and the reform of the international financial architecture. South Africa's 2025 Presidency specifically champions African interconnectivity, critical minerals sovereignty, and debt sustainability to enable a just energy transition.

South Africa faces increasing vulnerability to climate extremes, including droughts in the west and intense rainfall in the east, with economic costs reaching billions of rand. Despite the Climate Change Act of 2024 mandating a national adaptation plan, implementation is lagging. The energy sector, responsible for nearly 80% of national emissions, is identified as the most critical area for mitigation through the upcoming Integrated Energy Plan (IEP). WWF proposes a 'People's Energy Plan' as a feasible path to net zero CO2 emissions by mid-century that supports developmental growth and employment.

The South African Renewables Initiative (SARi) aims to establish financing arrangements to enable a critical mass of renewable energy in South Africa, targeting 19 GW by 2030. The primary challenge is the higher financial cost of renewables compared to coal, which has historically been subsidized. To address this, SARi proposes a mix of concessional loans, risk insurance, and guarantees to leverage private investment. The initiative also emphasizes an industrial strategy to create local jobs and reduce the carbon intensity of exports.

The document explores the application of Just Energy Transition Partnerships (JET-P) in Colombia, analyzing international experiences from South Africa, Indonesia, Vietnam, and Senegal. It identifies a significant financing gap, noting that public investment currently represents only 0.01% of required resources. The brief proposes a country platform to attract international public and private capital, while emphasizing the need for grants over loans to avoid increasing public debt. It prioritizes strategic projects such as energy communities and the phase-out of coal plants, while arguing against financing fossil fuel infrastructure or inefficient subsidies.

The document critiques the Just Energy Transition Partnership (JETP) for focusing on electricity infrastructure over economic diversification and worker needs. It argues that the South African Reserve Bank's (SARB) current inflation-targeting framework and operational independence hinder developmental goals. The author proposes a shift toward 'promotional' central banking, utilizing underexploited liquidity in the banking and retirement sectors—estimated at R52.41bn from banks and potentially R600bn from retirement funds via offshore limit reductions. Key recommendations include reforming the South African Green Finance Taxonomy (SAGFT), implementing mandatory climate risk disclosures, and using credit allocation tools such as targeted refinancing operations, green-differentiated capital requirements, and state investment banks.

The Institute for Economic Justice advocates for a Universal Basic Income Guarantee (UBIG) in South Africa, defining it as a government commitment to ensure all adults have a regular cash benefit to meet basic needs as a right. The document highlights that while social grants have been effective, gaps remain for able-bodied adults aged 18-59, and the current Social Relief of Distress (SRD) grant is temporary and limited. It asserts that a UBIG, supported by complementary policies like a just energy transition and industrial policy, could eliminate poverty for the 18.3 million people unable to meet basic food needs, improve health and education, and reduce gender inequality.

The document examines the socio-economic challenges of the energy transition in South Africa and Brazil, focusing on the gap between decarbonisation goals and the actual reskilling of vulnerable workforces. In South Africa, the transition is complicated by a heavy reliance on coal for electricity and high unemployment, while Brazil faces challenges in balancing its clean energy mix with high emissions from agriculture and deforestation. Both nations struggle with structural inequality and the need for robust social protection systems to ensure that the shift to green industries does not exacerbate existing poverty or exclude informal workers.

The South African Renewable Energy Master Plan (SAREM) aims to industrialise the renewable energy value chain to drive economic recovery and a just energy transition. The plan identifies market certainty as the most critical factor for attracting manufacturing investment, proposing a shift from a percentage-of-CAPEX local content model to a points-based scoring system in the Renewable Energy Independent Power Producers Procurement Programme (REIPPPP). Key targets for 2030 include an annual GDP contribution of R141-164 billion, the creation of 32,500-35,000 new jobs, and achieving 70-90% localisation of key components. The strategy emphasizes integrating industrial opportunities into 'Just Transition hotspots' like Mpumalanga to reskill coal sector workers and diversifying procurement through private sector engagement and export promotion to regional markets, particularly within Africa via the AfCFTA.

The report examines the economic opportunities of transitioning to net-zero emissions by 2050 across several major economies. It argues that public investment can drive innovation and growth through signalling, crowding-in private capital, and reducing unit costs. While fossil fuel-exporting nations like the US, Canada, and Indonesia may face long-term GDP losses as global demand for hydrocarbons falls, the report finds that most subject economies—including the EU, UK, India, Japan, and South Africa—experience net gains in GDP and employment. The transition is predicted to significantly reduce household expenditure on fossil fuels, improve public health by reducing pollution, and enhance energy security, particularly for the EU in the context of reducing dependence on Russian gas.

The report examines the potential of South Africa's shale gas reserves, estimated by the US Energy Information Administration as the eighth largest globally. It contrasts a 'Base Case' of no fracking with a 'Shale Boom' and a 'Blue Bridge' scenario. While a shale boom could boost GDP and reduce poverty, it risks significant water contamination in the semi-arid Karoo region and may increase long-term carbon emissions by delaying renewable energy investment. The authors propose a 'Blue Bridge' approach, using an excise tax on fracking to fund renewable energy infrastructure, which they argue could maximize economic growth while ensuring long-term environmental sustainability.

The report analyzes how the shift toward a multipolar world, the EU Green Deal, US energy strategies, and China's dominance in critical minerals impact South Africa. It highlights the contradictions in European energy policy following the Russia-Ukraine conflict and the paradoxical nature of China's green energy support versus its fossil fuel investments in Africa. The authors argue that South Africa should adopt a strategy of 'active non-alignment,' diversify its critical mineral supply chains, and foster domestic innovation to achieve energy sovereignty and a just transition.

The document examines the tension between Africa's significant natural gas resources and the global shift toward net-zero emissions. It argues that while gas provides short-term revenue and energy security, long-term investments face high risks of becoming stranded assets due to declining global demand and the falling costs of renewable energy. The paper advocates for leveraging climate finance to scale up renewables and green hydrogen, which it presents as more sustainable pathways for economic diversification and energy access.

The paper contends that South Africa's current policy of austerity is economically destructive and proposes a R1 trillion fiscal stimulus over three years. It argues that the country has the fiscal space for expansion because its debt levels are comparable to emerging market peers and its productive capacity is underutilised. Using input-output modelling, the authors estimate an average fiscal multiplier of 1.68, suggesting that a stimulus of 10% of GDP (approximately R500 billion) could generate over R800 billion in economic expansion and nearly 3.5 million jobs. The proposed stimulus is guided by ten principles, including targeting high-multiplier sectors, reducing inequality, and ensuring environmental sustainability through a 'Green New Deal'. Financing is proposed through progressive taxation, rebuilding the capacity of the South African Revenue Service (SARS), leveraging Development Finance Institutions (DFIs), and reforming monetary policy.

The document outlines the challenges of South Africa's coal-dependent energy system, including environmental externalities and the financial crisis at Eskom. It proposes cancelling further coal Independent Power Producers (IPPs), reforming Eskom's business model to invest in renewables, and increasing the localisation of renewable energy manufacturing. A central theme is the 'just transition,' emphasizing the role of unions and the state in protecting vulnerable workers through re-skilling and social protection. The brief recommends the urgent finalisation of the Integrated Resource Plan (IRP) 2016 and the establishment of a Just Transition Taskforce.

The report identifies that South Africa's public procurement, representing approximately 15% of its GDP, offers a significant opportunity to address environmental challenges. While national legislation specifically for green public procurement (GPP) is absent, existing regulations permit the integration of environmental considerations. Successes in the Western Cape and City of Cape Town demonstrate the feasibility of GPP in reducing water, energy, and waste. However, mainstreaming GPP is hindered by legislative gaps, limited practitioner capacity, financial constraints, and market readiness issues for smaller companies. The report recommends five strategic areas for improvement: embedding GPP into legislation, enhancing procurer capacity, integrating GPP into budget planning, establishing monitoring systems, and supporting small companies to improve market readiness.

South Africa's green technology transfer ecosystem is characterized by a comprehensive but fragmented policy landscape that creates tensions between social equity goals and climate urgency. While the Renewable Energy Independent Power Producer Procurement Programme (REIPPPP) demonstrates successful public-private collaboration, other sectors struggle with institutional silos and a significant gap in funding for the commercialization of research. Key barriers include conflicting localisation requirements and data regulations that may act as non-tariff barriers to foreign investment.