By Lindiwe Johnson
South Africa is one of the most carbon-intensive countries in the world, heavily reliant on fossil fuels for its energy needs.
At the same time, the country also experiences the triple challenge of significant levels of poverty, inequality and unemployment.
These need to be addressed to overcome the legacy of colonialism and apartheid, and achieve social and economic progress.
In response to these challenges, South Africa has chosen to embark on a Just Transition to respond to both the climate crisis and advance its economic and social development objectives.
It is well established through our daily experiences that climate change mitigation and adaptation will leave some behind resulting in an Unjust Transition. The impact of climate change will disproportionately affect the most vulnerable and, therefore, safety nets and income support provisions will be crucial for those workers and communities who are unable to transition to new industries (Presidential Climate Commission (PCC), 2022).
An effective Just Transition must consider the differentiated sectoral needs of communities and workers who are adversely affected by climate change and the geopolitics of low-carbon transition. The livelihoods of workers in specific sectors could be affected by droughts, floods or extreme weather events and, therefore, specific vulnerable sectors must adapt and build resilience to climate change.
Other sectors may need to shift away from high-emitting means of production to remain competitive in international markets and/or attract finance.
Taken together, the Just Transition will involve mitigation, adaptation, climate finance and employment/innovation across multiple geographies, sectors, levels and actors, and must achieve restorative, procedural, and distributive justice, in a context of great uncertainty and change.
With this reality, we all must acknowledge that strengthening resilience will be best achieved by anticipating all the possible risks such as health and unemployment, and intervening to ensure that social protection systems, job creation and local economic development are core ingredients for an inclusive and a “Just” Transition.
The structural economic changes required to decarbonise are significant and have consequences for communities around the country. We are on a bumpy ride with a not easy task of developing new economic pathways due to entrenched institutional systems, narrow worker skills, poor environmental conditions, physical isolation and lack of interest by alternative investors. The failure to transition can lead to job losses, weakening institutions and the physical dereliction of infrastructure.
According to the International Labour Organisation (ILO) (2023) small, medium and micro-sized enterprises (SMMES) are globally responsible for more than two thirds of all jobs, they also account for most of the new job creation. The number of SMMEs in South Africa has, however, declined as it continues to recover from the effects of Covid-19, now exacerbated by the national electricity crisis.
Electricity is critical for economic development; it is an important input to production and in realising opportunity at many scales within an economy. In as much as large power users, such as a datacentre, a mine or a smelter can’t operate efficiently without a reliable supply of electricity, same is truthful for small businesses like a hairdresser or a contract welder.
SMMEs and low-income households remain disproportionately impacted by load shedding because they cannot afford alternatives (eg, generators, solar PV). Small businesses often fall outside of the traditional larger incentives as they do not have access to capital or investment into rooftop solar, generators, inverters or any form of embedded generation.
These micro enterprises and local industries require specific support to enable them to access alternative electricity sources at an affordable rate, to see out load shedding. They also need to be supported via increased access to insurance to protect their alternative energy sources, given their disproportionate exposure to crime, for example.
South Africa’s emergency and long-term electricity planning should be aligned to these economic realities, and be centred on realising the jobs benefit of the transition through a focus on industrial policy and economic diversification, labour market interventions and skills to equip the labour force to participate in this economy and support workers as the transition takes place.
The opportunities in the variable renewable energy options should be met with Investment in human resources and skills development. This should include: (i) the reskilling and upskilling of existing workers so that they are better equipped to navigate the transition; (ii) future proofing the education system by accounting for future skills and labour force requirements, particularly those required for the transition and new green industries; and (iii) prioritise foundational skills across the education system to improve the adaptive capacity of the broader workforce.
As a country we should incentivise green industrial development and the localisation of key transition value chains, particularly in regions of high coal dependence such as Mpumalanga and Eastern Cape, which will suffer a key shift to electrical vehicles with the automotive industry in Nelson Mandela Bay under threat according to Nelson Mandela Bay Business Chamber (NMBCC), which has been working closely with the PCC in developing a Climate Response Strategy for the “bay”.
In parallel to this effort, the Nelson Mandela Bay University partnering with the PCC is identifying the forms of social ownership that would enable unemployed workers and communities to become active “owners” of the economy, positively impacting employment levels and household livelihoods.
The literature review sheds light on both the global north and global south experiences on social ownership, drawing lessons from successful models. A range of stakeholders are being consulted, towards the development of a work programme for the implementation of social forms of ownership.
As we continue to chart our Just Transition pathway, communities, workers, youth and many more stakeholders have raised concerns over these broader economic risks, and expressed fears about how biophysical, policy and technology related climate change impacts may impact on South Africa’s developmental agenda.
At the pulse of our early actions, prioritising skills development and local economic empowerment diversification for populations that are at-risk will be important for building their resilience and addressing inequalities.
Lindiwe Johnson is the project manager of Employment Strategy at the Presidential Climate Commission.
BUSINESS REPORT