Financial transparency key to just energy transition
The energy transition is a move away from fossil fuels towards low-carbon, renewable energy sources. At the core of a just evolution is building a socially resilient society in which workers and communities are protected during the transition. It should promote greater ownership of, involvement in and benefits from the production of energy by local communities, while making shifts to mitigate the climate crisis. This challenges our coalbased energy system and the financial methodology that enables it.
For a transition to be truly just, it must be transformative by placing workers, community and civil society members at the centre of all aspects of decision-making. This includes inclusivity in the financing that will shape it.
As members of civil society, we agree financing is needed and are open to engaging on offers such as the Just Energy Transition Partnership (JETP). However, we are concerned the processes followed thus far have not lived up to commitments of transparency and inclusivity.
SA’s JETP was announced a year ago at UN climate talks (COP26) by the International Partners Group comprising the UK, US, France, Germany and the EU. Its purpose is to contribute to decarbonising SA’s energy sector, supporting green hydrogen and electric-vehicle sectors, and championing workers and communities impacted by a shift away from coal. As a landmark deal, it aims to mobilise $8.5bn (about R153bn) over the next three to five years.
We welcome that the global north recognises its responsibilities to fund decarbonisation in the global south, given the historical context that has led us into crisis. Any terms and conditions of the deal, however, have not been made clear, making it difficult to evaluate. Transparency is key to creating an atmosphere conducive to proper and informed assessment.
To oversee the deal, President Cyril Ramaphosa established the Presidential Climate Finance Task Team (PCFTT) and the JETP Secretariat to assess details of the offer in the national interest and make recommendations on how the funds should be invested. They are also tasked with communicating and negotiating with international donors. At the same time, the Presidential Climate Commission (PCC) has convened consultations on the just transition and, most recently, planning meetings on the JETP.
The JETP’s investment plan is meant to be launched by COP27 in November. However, almost a year after the deal was announced, little is known about its design, what type of funding will be offered, what the funds will be used for, and how it will be implemented.
Civil society has responded to the JETP cautiously and coalitions such as the Life After Coal campaign and the Fair Finance Coalition of Southern Africa have submitted letters to and engaged with the PCFTT, the JETP Secretariat and the PCC to inquire about the deal and offer technical support in assessing it. These were attempts to ensure justice, transparency and social outcomes remain integral to the assessment and implementation plans of the deal.
These letters have led to meetings between the organisations and the PCFTT that were informative and constructive. Yet key documents and details, including the investment plan, have still not been made available to the public, despite commitments from decision-makers to share information before the plan goes to cabinet for approval.
Without these details it’s impossible to assess whether this deal is fit for purpose, let alone understand what it means for the average South African.
Nationally, any deal that could add to SA’s debt burden is worrisome. Existing debt has left us in a state of austerity, affecting people’s lives. Locally, lack of transparency creates gaps between the financing objectives and deployment of finance where it is most needed.
If funding does not enable transformation, initiatives supported by the JETP have the potential to recreate inequalities and further exclude communities from projects in their backyards. This leaves those who need immediate access to finance, social security or livelihood alternatives in the dark and further marginalises those who are economically excluded, especially women and the youth.
Massive resources and financial investment are needed for a transition, but what’s not often discussed is how the financing must be equally transformative and used in a progressive way to ensure the transition is economically and socially beneficial.
Actors directly affected and involved in the transition can shape and define sustainable pathways, true to the original framing of the just transition. Workers, affected community members and public-interest civil society groups offer legitimacy and feasibility to the just objectives of the transition.
If the JETP negotiations appear to include financial experts and policymakers and leave out the public, our energy system will remain exclusionary. Increased transparency ensures widespread oversight towards and accountability the objectives of the finance without perpetuating further inequalities.
This is essential in a just transition. While there have been public meetings on the JETP, more insight into the plans, rather than intended aims, could have built more confidence among civil society that the deal isn’t going to worsen inequality.
With the absence of a concrete investment plan being made public, it is important for civil society to develop a position and give input on the deal. It is important it understands climate finance and develops a collective perspective on how it should be mobilised and implemented. As the climate crisis intensifies, these financing deals will continue to shape how our country adapts.
As such, the Fair Finance Coalition of Southern Africa plans to host a JETP town hall before COP27.
By hosting such an event about climate finance and the implications of deals such as the JETP, further capacity can be built to support the call for meaningful engagement we seek from decision-makers. It provides a platform to shape clear demands on financing that represent people’s needs in the just transition and expectations of such finance. At the town hall, civil society organisations will champion draft guiding principles for climate finance to ensure human rights and climate justice objectives aren’t compromised.
This JETP will set a precedent for future climate finance as it is intended to catalyse further funding for SA and inform models for other countries.
We need finance for a just transition and a climate change response, and it is paramount that the example we set now is one of transparency, accountability and inclusive decision-making centring on impacted workers, youth, women, communities and civil society.
Almost a year after the JETP deal was announced, little is known about its design, what type of funding will be offered, what the funds will be used for, and how it will be implemented