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South Africa’s coal deal is a new model for climate progress
South Africa’s coal deal is a new model for …
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The global response to this year’s UN Climate Change Conference, known as COP26, has the former US President’s grim speech Largely mirrored Barack Obama in Glasgow, Scotland on Monday; As Obama put it, « We have nowhere near done enough to deal with this crisis. » Perhaps he is right. However, an agreement announced at the conference offers a new model for progress: the unique agreement between South Africa and a club of developed country donors to accelerate the decarbonization of Africa’s most industrialized economy.
The disappointment at COP26 is not an anomaly. Most climate summits failed to meet the expectations of activists and politicians. But that is to be expected: at best, global climate conferences can produce goals and commitments. They are usually watered down to encourage as many countries as possible to join. Most commitments lack credible enforcement mechanisms, while the actual policy is then decided by governments and parliaments.
The South Africa deal – which goes under the title « Just Energy Transition Partnership » – sees 8.5 billion over the next five years US dollars in grants and cheap loans. The program, funded by the United States, Great Britain, France, Germany and the European Union, aims to hit the lower limit of South African emissions targets under the Paris Agreement and keep global temperatures rising to 1.5 degrees Celsius above 19th century levels. This is impressively ambitious by the standards of most countries, let alone those of the developing world.
The global response to this year’s UN climate change conference, known as COP26, has the grim speech of former US President Barack Obama on Monday in Glasgow, Scotland largely reflected; As Obama put it, « We have nowhere near done enough to deal with this crisis. » Perhaps he is right. However, an agreement announced at the conference offers a new model for progress: the unique agreement between South Africa and a club of developed country donors to accelerate the decarbonization of Africa’s most industrialized economy.
The disappointment at COP26 is not an anomaly. Most climate summits failed to meet the expectations of activists and politicians. But that is to be expected: at best, global climate conferences can produce goals and commitments. They are usually watered down to encourage as many countries as possible to join. Most commitments lack credible enforcement mechanisms, while the actual policy is then decided by governments and parliaments.
The South Africa deal – which goes under the title « Just Energy Transition Partnership » – sees 8.5 billion over the next five years US dollars in grants and cheap loans. The program, funded by the United States, Great Britain, France, Germany and the European Union, aims to hit the lower limit of South African emissions targets under the Paris Agreement and keep global temperatures rising to 1.5 degrees Celsius above 19th century levels. This is impressively ambitious by the standards of most countries, let alone developing countries.
In practice, this funding will serve three goals: early retirement of coal-fired power plants, building clean energy sources, and helping coal-dependent regions. Shutting down coal-fired power plants and helping coal-dependent regions will be a political challenge. The move away from coal threatens 120,000 jobs in heavily unionized mines and power plants in what is in some ways the highest unemployment rate in the world and where one job often feeds large families. However, the energy transition also requires new energy sources and thus new jobs (which, however, rarely go to former coal workers).
Realistically, South Africa has to support a considerable expansion of renewable energies with increased natural gas production. This coal-to-gas transition – which is behind most of the emissions cuts in the United States, the United Kingdom, and other countries – comes at an opportune time: In 2019, a Total-led project discovered an estimated 1 billion barrels of natural gas on the coast of South Africa. South Africa will need this domestic gas to replace its coal production with renewable energies – because weather dependent wind and solar energy always need a reliable backup power source.
If these agreements are made, they could accelerate global decarbonization in an equitable and effective way.
This deal is the first of its kind for three main reasons. First, the South African government has largely developed the bespoke program that allows it to accommodate local conditions on its own terms. Second, it represents a well-funded partnership between a small number of actors that creates greater accountability than would be possible in a vague global or regional agreement. Third, in addition to early decommissioning of coal-fired power plants, the agreement also provides funding for a “just transition” at the local level, helping to cushion the blow of local deindustrialization in a developing economy. All three details suggest that it is more likely than previous climate deals.
The associated funding is another cause for optimism. South Africa’s ailing utility company Eskom estimates it will need around $ 27 billion to accelerate the move away from coal. In order to achieve South Africa’s Paris goals, the electricity share of coal must drop much faster and drop to zero by 2050. US $ 8.5 billion will provide significant support to South Africa in decarbonising, with important global implications: The country is only the 12th largest emitter of carbon. The figure of 8.5 billion European Green Deal worth 1 trillion euros by 2030.
In addition, South Africans will benefit greatly from the agreement. The country’s coal-based electricity system delivers unreliable electricity at staggering prices and is slowing the country’s economic growth. At the local level, heavy pollution from coal mines and coal-fired power plants has catastrophic effects on the environment and public health: a leaked study by the South African government estimates that 5,000 people die each year as a result of pollution in the country’s coal belt. A transition to cheaper, decentralized renewable energy, backed by natural gas, promises cheaper, cleaner and safer electricity supplies.
The tailor-made multilateral agreement model is admittedly more difficult to scale than large, but vague global pledges. But in the long run, smaller agreements between fewer countries could bring much more concrete progress. Many of these agreements would also not be necessary to achieve meaningful reductions on a global level: only 10 countries are responsible for two thirds of global CO2 emissions, and the 20 largest emitters account for 79 percent of emissions.
The developed ones Countries should capitalize on and build on the success of the South Africa Agreement by entering into similar arrangements with other large coal-dependent economies. Indonesia, one of the ten largest coal consumers in the world, has committed to phasing out coal in Glasgow; a group of developed countries should follow suit with a bespoke, financed deal on par with that of South Africa. If these agreements are made, they could accelerate global decarbonization in a fair and effective way. Future generations might not see COP26 as a failure, but rather as the birth of a new form of climate diplomacy.
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