Minister Barbara Creecy: Launch of Just Transition to a Decarbonised Economy for South Africa (JUST SA)

14 March 2023, Johannesburg, Gauteng Province, Republic of South Africa

His Excellency Ambassador Andreas Peschke, Ambassador of Germany to South Africa, Lesotho and Eswatini,
Acting Country Director of the GIZ Mr Gregor Schmorl,
Moderator,
Distinguished members of the Presidential Climate Commission,
Ladies and gentlemen,

It gives me great pleasure to deliver the opening remarks on the occasion of the launch of the JUST SA project, which is designed to contribute towards the just transition efforts that are underway in the Province of Mpumalanga and across South Africa.

As we have heard so eloquently expressed by the youth representatives, Mpumalanga is a province that finds itself on the frontline of the struggle to fundamentally transform our economy, which is currently reliant on coal, towards more sustainable and environmentally friendly modes of production and consumption.

Mpumalanga shares the characteristics of the rest of the sub-continent of being one of the areas most vulnerable to the effects of climate change, as has been recently witnessed with the devastating floods in the province. At the same time, Mpumalanga is one of the more industrially developed regions and the coal industry and its value chains provide livelihoods and sources of income to hundreds of thousands of people in a country that is still confronting the triple challenges of poverty, unemployment and inequality.

Illustrating this fact is something that I experienced in Mpumalanga in 2019, when I was campaigning for my party before the national elections that year.

Firstly, when we were campaigning during the day many people were not at their homes, because they were at work. This may seem normal, but given the rate of unemployment in our country the fact that people were employed and busy during the day in these areas showed me that there were many available jobs in Mpumalanga.

The second thing I noticed when we were going from door-to-door and campaigning, was that almost every house’s washing line had either an ESKOM or SASOL overall drying on it.

These two things left an impression on me because they showed how important the coal value chain is to Mpumalanga, and the thousands of jobs reliant on the sector.

The success of the just transition effort in Mpumalanga is therefore a necessity, not only for the people in that province, but also for South Africa. Furthermore, as this international partnership testifies, what happens in Mpumalanga is of international significance, because the world is in dire need of success stories that demonstrate that just transitions are not only possible, but better in every way than climate measures which leave our people and our communities behind. We need to demonstrate that a region such as Mpumalanga can decarbonise its economy, without undermining its industrial base or significant employment, and at the same time, improve its social and economic welfare. We need to go further still and demonstrate that the green economy can surpass the outdated fossil-fuel driven global economic development model of the past, and crucially, do so in a far more socially just, inclusive and equitable manner, leaving no one left behind.

The JUST SA initiative is therefore welcomed by the Government of South Africa as a signal of hope, as we seek to harness the opportunities and mitigate the risks associated with climate action. An important part of this programme is to help us achieve an all-inclusive dialogue amongst national stakeholders and to raise awareness.

On behalf of government, I therefore wish to express our appreciation to the Government of the Federal Republic of Germany, which continues to be our leading international partner in support of our climate actions.

Ladies and gentlemen,

At the COP 27 United Nations Climate Conference in Egypt last year, South Africa launched its Just Energy Transition Investment Plan (JETP-IP) for the period, 2023 - 2027. We also welcomed the first loans, provided by Germany and France, towards the $8,5 billion they have committed to the Just Energy Transition Partnership (JETP) to establish new industries for electric vehicles, green hydrogen and electricity generation.

The JETP-IP outlines the enormous scale and nature of investments needed to achieve our decarbonisation goals. According to the plan, South Africa will need the investment of approximately US$ 98 billion over the next five years to enable part of the just transition and achieve the ambitious targets we have set out in our Nationally Determined Contribution (NDC) to the Paris Agreement.

The plan includes a portfolio of investments across three priority sectors: the electricity sector, green hydrogen and new energy vehicles. More specifically, it focuses on investing in our electricity transmission and distribution networks and dramatically expanding renewable energy generation. It also includes investment in local production of green hydrogen and electric vehicles, and investing in local economies to develop skills and enable economic diversification.

This partnership presents an opportunity to develop a new and innovative model for financial support for just transitions in developing countries.

Already, the South African JETP is serving as a model for partnership between other high-carbon economies of the global South, and developed economies of the G7. JETPs have been announced for Indonesia and Vietnam. It is therefore a shared interest of the international community that the South African path-setting and pioneering efforts on the Just Transition are successful.

At the same time, we are under no illusions that innovative partnerships like JETP by themselves will help us solve the climate emergency. A more much wider funding stream will be required to achieve just transitions in developing countries. This suggests that nothing short of a fundamental transformation of the global financial architecture and reform of the multilateral development banks to make them fit-for-purpose in supporting the sustainable development imperatives of developing countries, will suffice. It is simply not possible to address a global crisis of this nature in a sustainable way on the basis of loans that lead to yet more debt, during a time when many developing economies are already facing mounting debt burdens.

Ladies and gentlemen,

I would like to close by reiterating South Africa’s unwavering resolve to contribute its best effort towards addressing the global challenge of climate change and to achieve the most ambitious goals in our Nationally Determined Contribution to the Paris Agreement

It is our intention that we do this in a manner that meets our broader development challenges and creates new opportunities for work, ownership and social development in Mpumalanga.

I thank you