How renewables can help SA’s economy recover from Covid
The only recovery from the crisis that can attract investment to deliver high-quality and sustainable jobs is a green one, writes Nigel Casey
At the beginning of 2020, which now seems an age away, we were looking forward to Cop26, the crucial summit of world leaders that we were due to host in Glasgow in November to address our common climate emergency.
Then Covid-19 crashed uninvited into all our lives. It has had a profound effect on all of us, as individuals and as families, and on our economies and societies.
One consequence was a collective decision to delay the Cop26 summit by 12 months, to November 2021. The reason for delaying wasn’t because the summit had become less important. On the contrary, the science makes clear that the need for action is more urgent than ever.
The reason was rather that past summits have shown that it is only by bringing ministers and heads of government together in person, with the clock ticking, that we can create the necessary pressure to take the tough decisions vital for our planet’s future.
Those hoping for an environmental silver lining from the coronavirus crisis will be disappointed. Despite the big hit to economic growth, global emissions are only 4.5% down on pre-Covid levels, less than the targets agreed in Paris in 2015. And emissions are already rising again as economies recover.
Meanwhile, the effects of climate change continue to grow. From the threatening changes to rainfall patterns in Southern Africa to flooding in East Africa, to more than 100-million people along the West African coast displaced from the shoreline by rising sea levels. Africa is warming faster than the global average, and SA faster than Africa as a whole.
So delaying action while we deal with coronavirus will only store up bigger problems for the future. We must keep up the momentum.
As hosts of Cop26, we in the UK are redoubling our ambition to achieve a climate-resilient, zero-carbon economy at home, and a high-ambition outcome from Glasgow in 2021.
We’ve set a target of net zero emissions by 2050 and are investing significantly in our own green economy. We’ve committed to doubling our international climate finance contribution, helping poorer countries reduce carbon emissions and adapt to the effects. We’re investing more than £200m in clean technology development in SA, and have launched a new Partnering on the Acceleration of Climate Transitions programme.
We recognise our responsibility as a wealthier country and major historic carbon emitter to show this kind of lead. But if we’re to make a real impact on the trajectory of global emissions, there is no avoiding the reality that everyone, including SA, needs to play their part and submit more ambitious reduction plans to 2030 — known as Nationally Determined Contributions (NDC) — as well as longer-term plans to achieve net-zero greenhouse gas emissions.
And herein lies an opportunity for SA, one that chimes with President Cyril Ramaphosa’s ambitions to attract more international investment to SA and pump prime the recovery through infrastructure.
We’ve seen the severity of the hit to SA’s GDP from the coronavirus crisis. We know economies around the world will take time to recover. And we can see that competition for private capital for international investment will intensify.
But we also know from our work to promote UK investment into Africa, including at the London African Investment Summit in January, that there remains a strong appetite for investment opportunities, both from development finance institutions and the private sector, in renewable energy. SA has competitive advantage here that it could be exploiting.
The numbers are clear. Renewable energy costs have plummeted: solar, onshore-wind and battery storage costs have fallen 77%, 35%, and 85% respectively since 2010. Every $1m spent in the sector generates 13.5 full-time jobs in renewables infrastructure, and 7.72 in energy efficiency. That translates to cleaner air, better health, cheaper power, and jobs.
And SA already boasts a world-leading policy framework for attracting investment in renewables, the Renewable Energy Independent Power Procurement Programme (REIPPP). Previous rounds have drawn in long-term investment from around the world and demonstrated that power generation need not rely on endless public subsidies. Opening a fresh round now would send a strong signal to investors and create jobs and support localisation. It would influence broader investor sentiment about SA in a positive direction. Further delay will see international investors commit their money elsewhere.
We also know that there remains strong international interest in investment in infrastructure, and we’ve been supporting work by the presidency, National Treasury, Development Bank of Southern Africa and department of public works to develop a framework for attracting private capital into a big new infrastructure investment effort, which plainly cannot be funded purely from the public purse.
We hope to see soon some of those projects prioritised by the government move on to the point where development finance institutions and private investors have well prepared, bankable projects to consider, with the terms on which private investment is invited to participate clearly defined.
I know there will be considerable interest, particularly in ambitious, high-profile new developments such as the Gautrain extension. But again, time is of the essence as investors can only look seriously at projects that are ready for prime time, and the international competition for scarce capital becomes fiercer.
A green and resilient recovery from Covid-19 is not only possible but in all of our interests. And the only recovery from the crisis that can attract investment to deliver high-quality and sustainable jobs is a green one. World Bank evidence suggests that with the Right policies the net benefit of investing in more resilient infrastructure in countries like SA would be $4.2-trillion, with $4 in benefit for each $1 invested.
So let’s set an ambition to be remembered as the generation that responded to our twin coronavirus and climate crises by building a fairer, greener and more resilient global economy. A recovery that will create jobs in the industries of the future, not reinvest in the damaging legacies of the past. We look forward to supporting SA in increasing its ambition for a low-carbon economy at home, and to working together internationally for a high-ambition outcome in Glasgow in 2021.
• Casey is British high commissioner to SA.
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