Climate Pathways and a Just Transition for South Africa Business Action for Sustainable Growth Presentation to BUSA Just Transition Working Group , 29 July 2020 @NBISA #NBIJustTransition 0
Context … … and guiding principles South Africa will be severely impacted by climate change in the To have the desired impact, South African business must coming decades propose a position that is: • Unbiased – fact-based and objective, not a lobbying Unlike many countries, South Africa's economic case for implementing carbon neutrality, or even a 2°C mitigation path, is exercise by business negative • Ambitious – proposing step-change solutions and difficult In addition, South Africa must achieve a Just Transition to avoid trade-offs, not repackaging current efforts exacerbating inequality, maintain social cohesion, and eradicate • Unified – widely supported across all critical industries and poverty; and plan for the physical impacts of climate change non-business sectors A multitude of reports have been published by domestic and • Just – centered on socio-economic implications, not only international institutions about what South Africa should do, however little practical progress has been made. Many reports individual bottom lines - underscored by dialogue show a limited understanding of the full context, including local • Balanced – efforts are in proportion to the physical and realities that may challenge transition transition climate risk to which South Africa is exposed The time is opportune for South African businesses to propose a across development scenarios coordinated, constructive, and inclusive way forward that • Visible – anchored on a major international and local event, protects economic competitiveness COP26, to cement commitment and transparency and to demonstrate alignment with national poverty alleviation and economic goals 1
Based on physical and climate risk, what is an appropriate level of 1 ambition to reduce GHG emissions by 2050? What concrete measures can be implemented in each sector 2 and how can we create an enabling policy environment to reach the ambition? A coordinated national effort What are the associated social and economic costs is required 3 and what are the support requirements of the international community? on critical questions What are the consequences of local and global inaction and 4 how would the country adapt to physical risk? In the context of a What is the roadmap to a Just Transition, particularly in the post-COVID 5 economy geographies and sectors that will be most affected? 2
We need to ensure company leadership is on board with 1 the planning process and outcomes and will engage with CEOs throughout South Africa’s economic The recommendations developed must not be a surprise and vulnerability 2 must be developed with input from government and labour and tenuous partners, requiring constant engagement and updating political environment Through expert working groups, company and industry means that 3 partners and experts will be included in developing solutions stakeholder and recommendations engagement is critical Business views will be incorporated into government 4 stakeholder processes in the build-up to COP26 3
This study has the potential And create enormous to move SA away from … value by … Stalled progress due to resistance from pockets Unlocking & channelling local & international concerned about being left behind support to high need & impact areas Inconsistent policies & regulations which Laying a foundation for consistent and effective incentivise counterproductive behaviour policy development Self-optimized company scenario planning due Defining an optimized pathway at national level to to national level uncertainty decrease uncertainty for business Limited and haphazard cooperation between Mobilising coordinated cross-industry companies collaboration 4
We propose a collaborative study to accelerate Green Stimulus & create a 'unified voice of SA business' at COP 26 Phase 1b: Detailed design of pathways Final Prep Phase 1a: High-level pathways blueprint 4-5 months 4-6 months July Aug Sep Oct Nov Dec Jan Feb Mar April May June June Aug Enhance emissions baseline with data Priority Sectors All Sectors Establish fact base and reference points for remaining sectors and fine tune (emissions baseline and outlook to 2050) previously covered sectors Electricity Transport Electricity Detail mitigation and measures & Expand impact assessment for opportunities per sector Ramp Chemicals Metals remaining sectors + fine tune previous Publish final report Up to Assess feasibility and impact (incl. socio- and roadshows Complete mitigation pathways for Launch Mining Refining economic and just transition implications) Event South Africa (incl. adaptation and Define feasible climate pathways for resilience impact) Incorporate findings in Chemicals Mat. Manf. South Africa (incl. sector couplings) COP26 negotiation Finalise Just Transition narrative and AFOLU strategy preparations for COP26 Analysis will be completed at a sector level Accelerating Green Finance and follows a 80/20 approach to asset-based Develop Green Stimulus vision and strategy, prioritise 'no- Mining detailing covering key assets only (excludes regret' green projects and prepare international funding adaptation and resilience detailing) requests Stakeholder Engagement …with critical South African industries/business leaders, government ministries, civil society , labour, and COP26 representatives 5
Deliverables will be developed incorporating inputs from all sectors of the economy Sector Inputs Deliverables Electricity High-level pathways blueprint Funding secured (sector modelling with 80/20 view on asset based detailing) Chemicals • National emissions baseline and outlook to 2050 • Sector abatement curves and impact assessment Detailed design of Accelerating Green Mining • Climate pathways pathways Finance (comprehensive sector coverage and 2020 asset based detailing) Metals • Enhanced emissions • Green Stimulus Vision and baseline and outlook Strategy (including AFOLU 1 recommendations on how • Fine tuned and z to implement) Funding still required comprehensive national • Plan of action to fund abatement curve Refineries shovel-ready projects • National mitigation pathways and concrete Materials man. plan of action (including adaptation and resilience strategy) Transport Financial services 6 2021 1. Agriculture, Forestry and Other Land Use
To ensure representative, balanced and fact-based content; a comprehensive governance structure is proposed Government as ultimate stakeholder and recipient of final output Government Presidency, DEFF CEO champions publicly support study, provide directional input. Can take decisions through representatives on Steerco CEO champions Advisory boards Steering Committee Advisory board gives directional and methodological input. No decision power Selected CEO Industry, government and civil Selected CEO representatives society representatives representatives Steering Committee gives directional input on evolving content and process on regular basis. Can take decisions on items brought forward by core project team (within scope of study). In event of no agreement in Steerco, core project team Core project team NBI, BCG will act as tie breaker Committees Core project team Green Stimulus Energy-related Process-related • Leads content development within committees emissions emissions • Leads content integration and consolidation Sub-committees: Sub-committees: I) Materials Sub-committees : I) Materials • Drives stakeholder engagement (incl. CEO process + touchpoints with govt.) I) Green Stimulus vision manufacturing (Cement), manufacturing (Cement, II) Green Finance strategy II) Metals (Steel) , III) Chemicals, II) Metals (Steel), III) Chemicals, IV) Liquid fuels V) Electricity gen. IV) Liquid fuels Committees and sub-committees Transport emissions Agriculture & Adaptation and • Develop content under steering of core project team land-use emissions resilience • Can comment on integrated/consolidated content Sub-committees: Sub-committees: Sub-committees: • Committees will practically work in sub-committees dedicated to specific I) Commercial transport [tbd] I) Extreme weather resilience, II) Public transport II) Water management, subjects / sectors III) Adaptation finance Workshop series Workshop series will be held to discuss selected key enablers and opportunities I) Gas supply security, II) Green H2, III) Sector coupling, IV) Waste mgmt., V) Electricity market 7
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