Demystifying Climate Finance in South Africa
Written by Alia Kajee.
With the worsening climate crisis, it’s clear that resources are needed to ensure we embark on a just transition away from fossil fuels in a way that mitigates and compensates for negative impacts to workers in the coal value change and affected communities. We must also prepare for the impacts of climate change and the disproportionate impacts it has on the most vulnerable. However, finances are not always neutral tools to make ends meet.
Internationally, financial flows are still going towards fossil fuels. Further the ways in which resources flow for climate action are very political and very complicated. For something that has a huge public interest, climate finance is largely un-transparent and often unaccountable with global funding targets from developed to developing countries never being met.
Panellists at the JETP CSO Townhall convened by the FairFinance Coalition Southern Africa. Photographed by Rapelang Ntamu.
At COP26, the Just Energy Transition Partnership was announced as an $8.5 billion dollar deal to support South Africa’s decarbonisation, support new sectors of electric vehicles and green hydrogen, as well as mitigate negative impacts of the transition for workers and affected communities. This was one of the watershed announcements of COP26 and has been publicly lauded as a political pledge and commitment towards climate action and its been one of the deals that made its way to media headlines. However, in the year that the deal was being assessed and negotiated by national task teams appointed by the president, there was very little information about the details of the deal with the public. A deal of this nature, predominantly made up of loans, could have serious implications on South Africa’s already indebted national economy, and thus wider national implications. It was imperative that consultation happened on this deal according to the procedural justice element of the just transition, and that it happened prior to COP27 where we believed the deal to be finalised.
On the 22nd of October 2022, the Fair Finance Coalition of Southern Africa (FFCSA), hosted a public Town Hall on Climate Finance and the JETP for civil society. The objective of this was to bring together partners and allies and share information about what we did know of the JETP to capacitate ourselves. The intention was to hold space for civil society, by civil society in order to prepare our responses for JETP and future climate finance deals.
The event saw over 50 participants at the historic Constitution Hill in Johannesburg. Climate finance was broken down in an intersectional way, before the Presidential Climate Commission was presented on and a brief introduction and overview of the JETP to date. A panel of civil society, affected communities, labour and youth also presented their perspectives on the JETP and broader climate finance dynamics. The value of the town hall was that the information was presented, but also contextualised in order for partners to have a working and critical understanding regardless of their level of knowledge of climate finance before. During the event, principles for fair climate finance were workshopped and expanded on, and were later presented at COP27 as guiding principles for the FFCSA.
Alia is a Public Finance Campaigner with 350Africa.org. With a focus on fossil fuel investments of Development Finance Institutions in South Africa, Alia has a keen interest in alternative economic and development models in the public finance campaign. Considering the history and role of DFIs, the campaign is exploring decolonial and intersectional approaches towards a goal of reforming institutions that uphold an extractivist economy.