/ 11 May 2021

So what is a Just Transition?

Youth Hold Key To Beating Poverty

Beyond its environmental components, addressing climate change is about economic competitiveness and opportunity. If we do not adapt our economy to become more competitive and able to maximise the opportunities of the future, we may experience a myriad of negative economic problems. Which in turn, will worsen poverty, inequality and unemployment, something South Africa cannot afford.

 Instead we must begin the process of transition. 

What is a “Just Transition”? 

A Just Transition is a concept first used by the labour movement internationally. It seeks to acknowledge our global and local context as we change the economy. The opportunity is to do it in a way that not only builds competitiveness but also creates a more inclusive, prosperous and equitable society. 

It proposes that the transition takes place in a way that generates jobs, builds skills, increases service delivery, transfers wealth and increases the welfare and health of all.

In a global context, it should acknowledge the historical abuse of the environment, and of people, and must address the need for the developed world to meet its commitments to support developing countries in the transition. These are not optional outcomes of a transition; they are critical for its success.

 Many countries are responding to the recommendations of science and are setting and legislating targets of net-zero carbon emissions by 2050. The net in this sentence means that all global carbon emissions must be chemically or naturally captured and stored in some way so that there is no further carbon emitted into the atmosphere. 

Capture and storage options are limited (especially in South Africa), with the implication that cuts to carbon emissions need to be deep and widespread.

 Why can’t we just carry on emitting?  

There are three main reasons. First, countries that are investing in low carbon infrastructure (physical, policy and market) will increasingly be reluctant to trade with us as they try to avoid the embedded carbon in products that are manufactured in carbon intensive ways. Given that 46% of our exports are to countries that have already made net-zero commitments, this is not something we can ignore. 

Second, as technologies improve, low carbon options are likely to be the cheapest options.  We see this in the case of electricity, where huge drops in prices have meant that they are often cheaper than coal.  

Finally, as a developing country, South Africa will need access to international financial, trade and capacity support. If we don’t have a bold commitment and a solid plan directed at contributing our fair share to the global net-zero by 2050 goal, our access to these support options are likely to be limited.

 Responding to these issues requires us to shift our economy to contribute to the achievement of a global net zero by 2050 target. This is an enormous undertaking but one that is achievable. We can have a modern and competitive economy that generates jobs and livelihoods with radically decreased levels of fossil fuels. 

But it would require significant change. As a coal dependent nation, it means a South African economy that is radically different to the one that we have.

 Opportunities and risks

The risks are large but the opportunities are larger. South Africa has significant assets, not the least of which is plenty of sun and wind. Renewable-dominated energy systems and local manufacture are key. Our coal assets are old, and it is possible to decommission them with minimal stranded asset risk. Our motor vehicle manufacturing expertise could easily be changed to electric vehicle production. Our stable and well-regulated financial services sector is a strong base for green finance for the continent. 

The combination of wind and solar enables the right kind of conditions for green hydrogen, setting the stage for us to be a net exporter. The role of platinum group metals in hydrogen and fuel cell use and the increased demand for certain mined commodities (such as copper) for use in green technology could bolster the minerals sector. 

Our experience with the Fischer–Tropsch process positions us to be the world leader in carbon neutral fuels. The infrastructure investment for a renewables dominated grid would be significant, creating many job opportunities. And who knows what other innovations await as we shift our industrialisation focus to produce goods that appeal to a global market themselves transitioning to net-zero.

 Transitioning our economy is essential. Doing so in a way that enhances justice and equality is non-negotiable. A Just Transition is possible and achievable but will require support and buy-in from all parties. Businesses will be critical for planning, implementation and investment support but ultimately supporting a Just Transition is everyone’s concern. The National Business Initiative invites you to join the conversation on the role of business in the Just Transition and in understanding and developing net-zero technical and social pathways for the economy.