EDITORIAL: Let’s be realistic but also ambitious with new climate target

The government has made it clear implementation of the just energy transition, which will see the country move to a low-carbon energy sector to help cut greenhouse gas emissions in line with its global climate commitments, will happen at an affordable and “appropriate pace” to ensure nobody gets left behind.

Given the stubbornly high employment rate, coupled with wide inequality and widespread poverty, moving at a pace that will prevent sudden, large-scale employment losses in the coal industry, for example, is a pragmatic approach. The danger, however, is that by moving at a pace the government is comfortable with the entire country is at risk of being left behind while other countries speed up reforms needed to meet their climate ambitions.

The EU’s carbon border adjustment mechanism (CBAM), which will impose a carbon tariff on imports of certain energy-intensive goods, entered into force in 2023 and it is expected that countries such as the UK, Canada and the US (all major trading partners of SA) will implement similar measures.

The CBAM will ensure that the carbon price of imports is equivalent to the carbon price of domestic production for EU producers. That will ensure the EU’s climate objectives are not undermined by imports from carbon-intensive producers.

SA’s high carbon intensity, because of the reliance on coal-fired power from Eskom, and its low effective carbon price (implemented through the carbon tax) exposes the country to economic shocks from the CBAM. The Reserve Bank warned in a report that the mechanism could cut exports by 10% by 2050.

The government is seeking adjustments to the implementation of the CBAM, arguing that the legislation is incompatible with the World Trade Organisation’s rules. However, its protestations are probably coming too late and even if allowances are made to delay full implementation, this will not provide long-term relief from complying with these and similar regulations from other countries when they come.

The only long-term solution is for SA to step up the pace of climate action. This can include making faster progress on the implementation of the new Climate Change Act and the just energy transition implementation plan, raising carbon taxes (or at least doing away with some of the allowances that are still in place) and being realistically ambitious in setting the country’s nationally determined contribution (NDC) targets for the period 2030 to 2035.

In the previous update, the NDC target range for 2030 was tightened, bringing emissions to within a range of 398-million to 614-million tonnes of carbon dioxide equivalent to 350-million to 420-million tonnes. 

President Cyril Ramaphosa and other members of the cabinet have affirmed the country’s commitment to these targets, but decisions such as delaying the decommissioning of some of Eskom’s coal-fired power stations and exempting certain power stations from meeting minimum emissions requirements will make it difficult to achieve.

Even if SA does achieve this target, an assessment by the Climate Action Tracker, an independent scientific project that monitors government climate action, rates SA’s 2030 NDCs as insufficient to be consistent with limiting global warming to 1.5°C in line with the Paris Agreement.

The government must submit new NDCs for 2035 next year. This is an opportunity to strike a more ambitious tone for climate action and to address some of the economic risks the country faces from climate-related trade restrictions such as the CBAM.