Five principles to observe for a just climate transition
The climate change commission will have to soften the potential for job losses in almost every sector of the economy
Talk of a “just transition” to a low-carbon, climate-resilient economy is getting louder. Environment minister Barbara Creecy again underlined its importance on October 4 at a national climate change ministerial stakeholder dialogue. This echoed the announcement a year ago of a presidential climate change co-ordinating commission at the presidential jobs summit.
But the commission has still not met; its membership and mandate remain opaque. Anxiety among all social partners — business, labour and civil society — is understandable. The just transition is not only a National Development Plan commitment and an environmental imperative, but a move that will have a profound effect on society and the economy.
Trade & Industrial Policies Strategies (Tips) is working at the request of the departments of economic development and environment on mapping how SA society is vulnerable to the effects of climate change and proposing resilience plans. Other processes are ongoing in parallel: the National Planning Commission is spearheading a social dialogue to chart a vision for the transition, while researchers at multiple institutions are investigating its implications in specific sectors and contexts. All this work suggests that to get the process moving five key principles need to be grasped.
First, a just transition is an economy- and society-wide process. Though the question of the coal value chain has been the hot-button issue dominating much of the public debate, it is not only about coal or even energy. In terms of employment and economic development, other sectors are more critical. More people — about 130,000 — are employed at petrol stations than in coal mining, which has a workforce of about 80,000. The rise of electric cars will likely see those filling station jobs decline.
The platinum mining industry employs about 170,000 people. They could face hard times as fewer catalytic converters are used: catalytic converters absorb 40% of global platinum demand. Tourism employs about 700,000 people and relies heavily on sustaining our rich biodiversity in the face of a changing climate. The agricultural value chain provides 800,000 jobs, but is vulnerable to changes in climate, farming and food production practices and water availability. Water insecurity could threaten more than half of all SA jobs.
That means, second, that the climate change commission has to consider both physical and transitional climate change effects. Physical impacts relate directly to climatic hazards that might damage infrastructure, assets, communities and individuals. These include rising temperatures and sea levels, cyclones, wildfires and floods.
Transition impacts emerge from the shift to sustainable development. They range from policy developments such as carbon pricing, to technological trends such as renewable energy and e-mobility, and can also alter market and trade dynamics. As, for example, when consumers turn away from coal and insist on eating local, or when stakeholders and shareholders exert pressure.
So, third, a just transition must focus on both employment and inclusive growth. Vulnerable stakeholders — workers, small businesses and low-income communities — must be at the core of the transition. It is not sufficient to declare they will “not be left behind”. They must be proactively supported, particularly those at the most vulnerable stages of the affected value chains, such as coal miners, petrol attendants and small-scale farmers.
Additionally, access to green solutions such as e-mobility and renewable energy has to be inclusive and beneficial to all. The transition to a green economy cannot simply be an elitist process that primarily benefits large businesses and high-income households with the resources to tap into the new opportunities that arise.
For this reason, fourth, just transition interventions cannot be left to market dynamics. Active labour market policies for job creation, such as retraining and reskilling of workers, are necessary. But alone they are inadequate in an SA context dominated by high unemployment, inequality and poverty.
They must be accompanied by strong economic development policies, including industrial and spatial development policies and multifaceted, cross-cutting interventions. Rather than simply planning, for example, to replace coal mining employment with jobs in renewable energy technologies, it is more about designing a comprehensive rejuvenation plan for coal-dependent regions, such as Nkangala and Gert Sibande, of which renewable energy would only be one component.
Fifth, to achieve all this the commission has to be a multi-stakeholder and multidisciplinary entity. There must be process space for all stakeholders to reach a common understanding on what a just transition means, which interventions are most appropriate for managing it, and who should manage those in terms of responsibilities, resources and potential benefits. Only then will the just transition train start moving in the right direction.
• Montmasson-Clair is a senior economist at Trade & Industrial Policies Strategies.