RICHARD HALSEY: Just transition finance proposal needs better transparency
The Just Energy Transition Partnership (JETP) could be a great opportunity for SA. The $8.5bn international commitment — announced in November 2021 to help support the country’s just energy transition — could contribute to tackling some of its most pressing energy, social and environmental challenges. It could position the country as a leader in this new type of international support and set an example for other countries.
It could be catalytic, opening the door for much larger levels of aid. It could also fail to deliver on this potential. As a new mechanism, it is still being designed — but if this process is not transparent and does not sufficiently include the people it is meant to benefit, it will fall short.
The energy transition is all about shifting a country’s energy system to the one that is better for people, climate and the environment. In SA, this largely means moving from coal to renewable energy. But for the transition to also be just, various types of justice need to be met. For example, providing support packages for communities and individuals affected by the transition away from fossil fuels.
For the JETP to succeed, it must equitably address both energy and justice angles. If the justice elements are superficially tacked on to make for a good sales pitch, but the majority of the deal is focused on simply deploying clean energy technologies, the JETP will fail as a model for other countries to follow.
Financing for infrastructure that provides an energy service, such as a solar farm, can come from a variety of sources due to the prospect of a return on investment. In contrast, supporting coal workers and communities when coal facilities close is not a profitmaking exercise and cannot raise capital in conventional markets. Therefore, these essential social and environmental programmes must feature strongly in the JETP, and should be the focus for support.
The JETP should tend to the most urgent cases first. For instance, the communities living in Steve Tshwete and Emalahleni municipalities in Mpumalanga will be directly affected by power station closures and should therefore be the first to receive support.
Involve local communities
One goal of the just transition is to build a better future, and a second is to resolve injustices of the past. The key to achieving both these objectives is to make sure the process itself is also just. This cannot be done without ensuring the people most affected by the transition are meaningfully involved at all stages of the energy transition process. What’s more, these workers and communities must have free access to all relevant information in an easily accessible format.
To date, the JETP design process has not adequately included those people who will be most affected by its implementation. The international donors have developed their finance offers and the SA task team has been involved in producing an investment plan. Yet the composition of working groups has not been made public and the first official stakeholder consultation only took place nine months after the partnership was announced.
The public also hasn’t had a chance to consult these documents yet, nor have representatives of affected communities been directly involved in their development. While the Presidential Climate Commission, as a third party, has convened forums on just energy transition that are meant to feed into the task team, this is not sufficient.
To have a just process, the JETP must have two-way participation and transparency throughout — skipping this and allowing a plan to be driven by outside parties will not yield optimal solutions, breeds mistrust, and goes against the spirit of just transition. To avoid a totally tick-box-style consultation, where it comes too late to make any substantive changes or address fatal flaws, immediate action must be taken.
As the intention is to get the investment plan approved by the cabinet in October, all the relevant documents must now be made available and coal community representatives must be allowed to have direct, meaningful input to the investment plan. It is not too late to place justice at the heart of the plans.
If the JETP can significantly improve the lives of people in Steve Tshwete and Emalahleni and rehabilitate the local environment, that will be a huge step forward for the just energy transition. This brighter future requires true partnership, not only between governments but also with the SA people the plan is for.
• Halsey is a policy adviser on the SA energy team at the International Institute for Sustainable Development.