Building a social compact around the climate transition

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Jenny Grice spoke to Presidential Climate Commission executive director, Dr Crispian Olver, to find out what the PCC aims to achieve as well as progress in regard to its important tasks.

The Presidential Climate Commission’s (PCC) major task according to the organisation’s executive director, Dr Crispian Olver, is “to build a social compact around the climate transition”.

A crucial principle in the climate crisis is the term the just transition (JT). Definitions vary widely. One of the PCC’s first tasks is to “get the different social partners to sign on to a common meaning [of the] JT; they all say they support it, how do we define it, what does it mean substantively, and what are the responsibilities of the different social partners in that regard,” says Olver.

They are doing this through wider dialogues with different commissioners that sit on the PCC, interested members of the public and different stakeholders. Many parties have each contributed their own powerpoints and documents. Although there are as yet no powerpoints and documents submitted by trade unions themselves, “the lead input into each dialogue has been made by TIPS, who are more closely aligned to labour than any other stakeholder,” says Olver. Moreover, in the ensuing discussions labour has participated actively, with labour commissioners often facilitating the dialogues, he says.   

Wider consultations and meetings are also planned in the new year, Olver told labour representatives who attended one of the PCC labour dialogues in November 2021. The PCC plans to meet directly with those affected, like coal miners who have already lost jobs, workers in coal-fired power stations who stand to lose jobs through decommissioning as well as those who live in the surrounding communities and are dependent on that mining activity to support their livelihoods.

The PCC will also seek input from rural communities, especially in rural areas and former homelands affected by catastrophic climate change. A multi-stakeholder conference will be held in March 2022; the PCC will adopt a final framework for the Just Transition ready for Cabinet by June 2022.

Starting to secure agreement

Already there are some positives says Olver. There is agreement that “climate change is happening” and “that it is going to involve deep systematic change in the way we do business and that change has social and economic consequences and we need to proactively manage those consequences.” The PCC he says, has to spell out “what are the implications of those changes for workers and communities and other vulnerable groups.”

Just how deep the systemic change goes, will be a matter for debate. Consensus is going to be tested when expounding on the exact models for the economy and ownership in the economy. In the policy dialogues convened by the PCC some constituencies, such as labour and NGOs, have argued that the climate transition presents opportunities for changing ownership models in the economy.

“Certainly business are not opposed to different ownership models, but they’re not going to sign onto the… kinds of socialist transformation that some of the partners would like to see [like] ownership of the means of production by the people.” The depth and model of transformation “is an ongoing discussion”, says Olver.

Urgent issues will have to be addressed and questions answered in areas where coal mines are downscaling and coal-fired power stations are being decommissioned, especially since the PCC has come out in support of Eskom’s proposal for an accelerated decommissioning of their coal-fired power stations.

He believes that Eskom’s proposal to decommission some of its old coal-fired power stations, is “quite carefully thought out”. These power stations are “no longer economic to run, their utilisation rate is below 50 per cent, their maintenance costs are very high … it’s going to pay Eskom to pull those off the grid faster than the IRP.”

Questions the PCC will debate are issues such as whose responsibility is it to fund such things as early retirement of those workers, their training and retraining and other labour market measures; whose responsibility is it to diversify and create an alternative economy in those areas?

The PCC wants to “define very tightly what corporate responsibility is and what government responsibility is in the transition”, says Olver. In this way, different authorities can be held to account.

This Table spells out the types of questions that the PCC will deliberate on. (Source: Towards a Just Transition)

For Olver, the JT is not just about finding ways to lessen the impact on workers and communities when mines and coal-fired power stations close. The PCC he says, “supports restorative justice including measures to redress historical wrongs such as land dispossession.” And as mines and coal-fired power stations are shut down, land will be released giving rise to a “major opportunity” to right these wrongs. However, before releasing the land, it “needs to be rehabilitated, and water resource areas restored to promote long-term water security.”

Decarbonising the grid

The absolute imperative for Olver is to “decarbonise the electricity grid” not just for climate reasons but also for economic reasons. Electricity from the Eskom grid powers the vast majority of our mines, factories and farms which produce exports. And if our energy mix on the grid is largely carbon-emitting, those embedded emissions “make those products emissions-intensive.” Globally there’s a move to implement carbon taxes on any imports from 2023 onwards, especially in SA’s important export markets like the EU and the US. These carbon taxes will make our exports more costly than those of our competitors. “We cannot be left at the end of that pipe.”

If SA hangs on to the old technologies he warns, “in 10 years’ time we are going to be without the technological base to do the transition and saddled with a whole lot of outdated technologies that are now penalised in the global trading system.”

Finding consensus on the energy mix

Getting agreement on the energy mix both now and in the future in this transition is going to be difficult. There are deep differences between those pushing for the continued use of coal, nuclear and gas as against the strong grouping of NGO commissioners and others who are diametrically opposed to this and want instead an urgent move to renewables with no gas as a transitional fuel.

He agrees with Eskom that after investing so much in new power stations, Medupi and Kusile, they can’t just be shut down. Coal will inevitably form part of the energy mix for some time to come. The NGO grouping is strongly opposed to this and to the use of gas. “It will need to demonstrate how the grid can be stabilised without additional peaking capacity, given the scale of the renewable rollout. We don’t yet have battery storage at utility scale that can pick up the slack… there’s a strong argument for the South African hydrogen economy [to do this] later towards the mid-2030s and into the 2040s.”

To try and reach consensus, Olver says the PCC will have a series of dialogues at the beginning of 2022. Each party will have a chance to put forward their ideas on the energy mix, show how their proposal will reach the target of net-zero carbon emissions by 2050 (or carbon-zero emissions by 2050). “Energy security” must be central to each groupings’ proposals. From these, the PCC aims to come out with a technical report that makes recommendations on the energy mix.

Renewables to mop up the job losses

There have been harsh criticisms of some proposals that look to expanded public works programmes (EPWP) as providing the jobs to ease the pain of workers and communities who are left stranded when coal mines close and coal-fired power stations decommission. Given the low rate of pay of EPWPs and their temporary nature, the criticism is understandable.

Olver instead favours a vision which sees renewable energy expanding massively at a rate of 3 giga watts per year up to 2040. At this level, there are economies of scale for local manufacturers to produce the parts for both wind and solar. This manufacturing can create real jobs – not just “intermittent jobs … in the installation and construction… [but] serious, decent jobs linked to large manufacturing exercises.”

Manufacturers were doing this previously he said. “There were wind turbines being built in Gqeberha, …most of the solar photo voltaic value chain had started,” he says. It was government’s delay in opening Bid Window 5, that led to all those manufacturing companies going bust.

It’s not only the manufacturing sector that will benefit from a renewables manufacturing expansion. SA has many of the minerals needed in the renewables manufacturing process: iron and steel for wind turbines, copper, cobalt, rare earths, aluminium etc. “Mining as an industry is going to prosper under a low-carbon economy,” Olver says, but it must take place “in a socially and environmentally responsible manner.”

Answering the critics

The PCC is not without its critics. The Climate Justice Charter Movement (CJCM), has chosen so far not to engage with the PCC. One of its coordinators, Vishwas Satgar told Daily Maverick, that the PCC’s recent targets that it proposed for nationally determined contributions (NDC) as well as net-zero targets don’t go far enough. 

Olver is cognisant of the crucial importance of correctly setting the pace of decarbonisation of our economy. Move “too fast and we devastate high-emitting economic sectors and jobs; too slow and we will stifle the transition to a green economy and lose economic competitiveness and jobs.” Those arguing for a more radical approach to cutting out fossil fuels “need to demonstrate how the social and economic impacts can be ameliorated,” he says.

At the other extreme are those naysayers that say the PCC and its ideas have been captured by Western developed nations. Although not aware of this criticism, Olver says he is cognisant that some are saying that the recent climate finance deal announced at COP26 “is a tool of western nations”. Olver believes the argument is often used to “argue against increased mitigation efforts to lower our emissions”. In his view such a “backward looking and defensive approach will cause serious long term economic harm to our economy.” To protect our national interests, “embracing and getting ahead of the climate transition is the correct thing to do.”

Finding common ground in the PCC will require a lot of energy from all parties. Olver appeals to stakeholders to engage actively in the debates around the climate transition to try to find common ground. “The climate transition has serious long-term development and economic impacts, and decisions about the path we follow have to involve everyone that is affected,” he says.  

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Jenny Grice
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