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What makes for a just energy transition?

A panel hosted by the Institute for Human Rights and Business (IHRB) on the fourth day of COP28 in Dubai agreed that the risks of energy transition are high if not well managed, and that participation by all stakeholders – civil society, government, communities and the private sector – is needed to make it work. The panel also expressed concern that the level of trust between especially civil society and government, but also between communities and companies, is very low, and that a formal platform for dialogue is needed to rebuild it. After all, “the South African miracle was built on dialogue,” noted one panellist.

The title of the discussion was “Private Sector Standards and Just Energy Transition Partnerships (JETP)S”, and the panel consisted of Sue Lund, Head, Just Energy Transition Investment Plan Projects Management Unit (JETIP PMU) in The Presidency; Shameela Soobramoney, CEO, National Business Initiative (NBI); Claude Kabemba, Executive Director, Southern Africa Resource Watch; and Haley St. Dennis, Head of Just Transitions, Institute for Human Rights and Business. The moderator was Alan Wallis, Senior Advisor, African Climate Foundation (moderator).

St Denis said global and local partners are needed because “we’re nowhere near the finance needed” to achieve a just energy transition, and so “we are not meeting energy targets”.

She said South Africa offers a ‘’better by co-design’ lead from which others in the world can learn, but the key question for the private sector is how to check standards, and how can corporate systems be used as levers to achieve human rights.

Lund stressed that all stakeholders must play a critical role, and that it is not just a government process. Climate change affects every element of society, and so a whole society solution is needed, she said.

The private sector recognizes that it faces a business risk if it does nothing, but also if the energy transition does not meet multiple goals. She noted that “business must be seen as being good to and for communities”.

She said that in SA business and society are intimately linked, and the need to address poverty  inequality and unemployment is acutely recognized.

She emphasized that the risks being faced are specific to particular industries. For example the motoring industry has to respond to export requirements for electric vehicles, and the market incentives being set in Europe for decarbonization. She said a tipping point will come when people on the ground will be affected, and therefore the risk needs to be well managed. The steel industry faces the same risk, with European markets imposing carbon restrictions on products relying on coal generated electricity.

“Every industry faces significant transition risks,” she said, and the sustainability of business has a knock-on effect on livelihoods.

However, Soobramoney said the skills gap a huge obstacle in achieving a just energy transition . She said that while adverts for “green jobs” were soaring, the available skills were not meeting that surge. “It’s a chicken and egg situation” because skills development depends on the correct development sectors being identified, but the energy transition is happening regardless. She noted that the economics of moving to green options make sense, and pointed to the fact that “when the self generation limit on electricity was lifted, the demand for solar immediately soared to a level higher than it had been in the previous 10 years.

However, she said there has to be a clear policy framework and that change cannot be haphazard.

She said “If we don’t transition fast enough the investment risk is high”, for example to pension  funds which risk being stuck with stranded assets.

Pointing to the tapestry on the wall woven by community members in Hamburg in the Eastern Cape as part of the Keiskamma Art Project, she said “That tapestry tells our entire story, of how communities are feeling. They are saying this is the impact of climate change: no fish, pollution, poverty, unemployment, inequality. The expectation is that the transition will bridge all these factors. This community is saying this must happen.”

Sounding a cautious note, Kabemba said “the assumption is that in the carbon economy there was justice. We have never had justice. What makes us believe that as we transition there will be justice. Is it just rhetoric? Is it just big words? This picture has existed for so many years. Business has always been there. Since 1994 the question has been ‘when is business coming to the party?’ Why are we failing in achieving justice. Why will a new type of energy take care of this?”

Look around the world: there has never been business driving justice. Business is about profits, creating wealth for shareholders. That is a big risk, if we want to provide space for private business to lead the way.”

He said that “if justice is a good it has to be public and has to be driven by the state. The state has to lead the way. We work in Carolina in Mpumalanga surrounded by 15 coal mines. We work with women whose husbands are working in the mines, or are unemployed. When we call meetings the mines don’t come,” he said, wondering whether they are fearful, or just not involved.

“How do you bridge the gap between state, private sector and people,” he asked.

If there is no ownership, there will be no justice, he said.

Moreover, “there is risk in continuing with the neoliberal economic model, which creates injustice. Responsibility is not in this room, it is at a global level. Africa will provide some of the critical windows to open up to green transition, but we must create a society where we minimize conflict over resources. Look at this country (UAE): the state provides the important services, not the private sector.”

Lund concurred that the transition must be restorative, procedural and just.

She asked what scale of investment, in infrastructure for example, was needed for the energy transition. “What is the justice component. How do we create new opportunities for livelihoods especially for people relying on coal, like in Mpumalanga. Government has a role, as do civil society organisations and the private sector.

She said at least a third of scale of need of investment must come from private sector, but the private sector in turn asks “where is the project pipeline”, which is government’s job.

Lund noted that R45 billion a year is spent on Corporate social investment. “Are there ways of channelling that finance into a just energy transition, and match it with different forms of finance. If we can operationalize what we have, how to we rally CSI to leverage other investments?”

She said the presidency is setting up a grants register of international community grants for a just transition, to try to match project originators and funders.

Soobramoney said that while the focus is now on job losses, understandably given the impact on the coal industry, the 2050 zero carbon target would be jobs positive. “Even prior to Covid the economy was in trouble,” she said, “and now we can reposition the economy to be future-fit” by following the sectoral decarbonization pathways.

She cautioned that along the way there was a risk of “greenwashing and greenhushing” which needed to be avoided.

Kabemba argued that before anything could be achieved, “we need to create hope. I know it’s not policy. There is too much stress in communities just to make a living. So people need to be convinced that the state and the private sector are working together to get us out of the quagmire of poverty.”

He said there is a gap between pronouncements and policy. “We need to close that gap, to find effective ways”. We have environmental, social, and governance standards, he said, but have they been effective, he asked.

“There need transparency,” he said, to build hope and trust between different stakeholders.

And “we need to take these conversations to very low levels. Then people can engage, once they understand. 

And we need partnerships, which must “first be local, and then global”.

Lund urged people to “think about how companies can help communities have agency. Poverty does terrible things. People are broken.” She said therefore there has to be an emphasis on building organisations that that can take control over decisions. Shareholder must take extra step and put dipstick into community and bring that back.

Responding to an observation from the floor that the relationship between civil society and government was very hostile, Kabemba said “It’s true we’ve seen animosity. It’s sad that it’s the ANC government that has that attitude. We would think it would want to strengthen civil society. We need to fix that. We come back to dialogue. There is no organised platform where civil society and government sit as a society. Our miracle was built around dialogue. We need to find a way to agree that, for example, if we can’t abandon coal now, what do we have in place. How do we convince civil society? How do we get a private sector, civil society agreement on coal? Have the conversation. That will build trust. We need a platform to rebuild trust.”

Commenting on the panel debate, head of Oppenheimer Generations Research and Conservation Duncan MacFadyen, said: “Now, more than ever, the private sector needs to come together to support a just energy transition to improve the quality life for all South Africans, thus buffering communities to a certain degree to the adverse impacts of climate, fostering climate resilience in rural and urban ecosystems, and reducing emissions, in line with best available climate science. Business needs to review energy value chain supply and demand, ensuring an increased productivity as well as reducing emissions, unpacking key concerns around the existing and needed private sector standards, as well as the related private sector business, green-based energy opportunities, and feedback loops that drive the country’s energy system.”

President Cyril Ramaphosa concluded his official visit to Dubai on Saturday, where he presented the UN Secretary General Antonio Guterres, South Africa’s Implementation Plan of the Just Energy Transition (JET) Investment Plan. The presidency said “the plan has been shared with some of the JET partners who have committed up to US$ 8,5 billion towards South Africa’s efforts in decarbonising the economy and mitigating the effects of climate change”.

Yves Vanderhaeghen is a member of the Oppenheimer Generations Research and Conservation delegation to COP28. He writes for Jive Media Africa, science communication partner for OGRC.

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Yves Vanderhaeghen

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