South Africa
Green at the end of the rainbow?
South Africa is a complex country, with a complex past. Generations of racist and colonial rule came to an end with the country’s first fully democratic elections in 1994, but the legacy of apartheid still casts a long shadow over the Rainbow Nation’s economy and society. And the country has been particularly hard hit by COVID - both in health and economic impacts.
One of the most ethnically and culturally diverse nations in the world – with 11 different official languages enshrined under the constitution – it is also by some measures the world’s most unequal country.1 Wealth and opportunity are still divided starkly across racial lines, with white South Africans earning on average five times more than their black compatriots. By GDP the second largest economy on the continent, South Africa still suffers from high rates of poverty and unemployment, and the gap between the country’s GDP and its Human Development Index ranking is second only to Botswana.2
South Africa’s creaking infrastructure also belies the country’s status as an upper middle-income nation. Its energy system is outdated, mismanaged and heavily dependent on coal; load-shedding and blackouts are endemic. Water shortages are intensifying, with Cape Town making international headlines in 2018 when it came perilously close to running out of water altogether.
The government has made faltering steps towards a greener economy, with a 2011 National Strategy for Sustainable Development and the 2019 introduction of a much-delayed carbon tax. But overall commitment to sustainable economic reform is tentative at best: the 2011 NSSD expired in 2015 and has not been replaced, and despite world-class solar energy resources, South Africa has been agonisingly slow in weaning itself off domestic coal for energy use.
The government's response to COVID so far represents another missed opportunity to transition towards a greener future, with unconditional bailouts to South African Airways and the coal sector totalling nearly US$1 billion, relaxing air pollution standards and delaying carbon tax payments. The recently released ‘Economic Reconstruction & Recovery Plan’ sets a greener tone, with the stated aim of ‘building a sustainable, resilient and inclusive economy’, and includes mass public employment programmes supporting youth, women and the environment.
But South Africa’s coal sector remains an excellent example of the dangers of propping up the brown economy for too long and being left with stranded assets. As the world’s 4th largest exporter, coal has always been a huge source of government revenue. But with global demand collapsing, especially in South Africa’s key markets of South Korea, China and India, and local utilities also planning to cut their coal capacity, the government now must manage the decline of a major employer while simultaneously coping with declining export income.
In this context, the lack of a commitment to an adequate green economy strategy – one which could guide a just and equitable transition towards new green industries, jobs, and inclusive well-being – is doubly disappointing. With South Africa’s National Development Plan due to enter its next five-year implementation phase in 2020, the opportunity to seize a greener, fairer future is there for the taking.
Policy Scores
Last updated 19 Aug 2021
Green COVID-19 Recovery
South Africa has announced fiscal stimulus totalling more than USD$28 billion or 10% of GDP, according to the IMF. However, funds have largely been directed towards carbon-intensive energy and industrial sectors of the economy. Measures include the provision of unconditional bailouts to South African Airways and an unnamed polluting energy provider totalling nearly US$1 billion, relaxing air pollution standards for coal plants and delaying carbon tax payments - amounting to the loosening of existing weak environmental conditionality. A partially green measure introduced includes the accelerated procurement of additional electricity capacity, more than half of which is to come from renewables. At the same time, progress in increasing the renewable energy share has been stalled by the decision to cut variable sources of energy (specifically wind power) in response to the current drop in electricity demand.
Looking ahead, the recently released ‘Economic Reconstruction & Recovery Plan’ sets a greener tone, aiming to drive inclusive and transformative economic growth. The four priority areas for interventions are: infrastructure, energy generation capacity, employment and industrial growth. With a strong social component, the package includes mass public employment programmes specifically supporting youth, women and the environment. However, enhanced investment in renewables to secure South Africa's energy future is counterbalanced with greater investment in general infrastructure which does not support the transition to a green economy. As yet, many of the initiatives are under development with provisional allocations of funding and increasing media scrutiny on disbursment of funds, but there are signs commitments could become more concrete in the future.
South Africa has announced fiscal stimulus totalling more than USD$28 billion or 10% of GDP, according to the IMF. However, funds have largely been directed towards carbon-intensive energy and industrial sectors of the economy. Measures include the provision of unconditional bailouts to South African Airways and an unnamed polluting energy provider totalling nearly US$1 billion, relaxing air pollution standards for coal plants and delaying carbon tax payments - amounting to the loosening of existing weak environmental conditionality. A partially green measure introduced includes the accelerated procurement of additional electricity capacity, more than half of which is to come from renewables. At the same time, progress in increasing the renewable energy share has been stalled by the decision to cut variable sources of energy (specifically wind power) in response to the current drop in electricity demand.
Looking ahead, the recently released ‘Economic Reconstruction & Recovery Plan’ sets a greener tone, aiming to drive inclusive and transformative economic growth. The four priority areas for interventions are: infrastructure, energy generation capacity, employment and industrial growth. With a strong social component, the package includes mass public employment programmes specifically supporting youth, women and the environment. However, enhanced investment in renewables to secure South Africa's energy future is counterbalanced with greater investment in general infrastructure which does not support the transition to a green economy. As yet, many of the initiatives are under development with provisional allocations of funding and increasing media scrutiny on disbursment of funds, but there are signs commitments could become more concrete in the future.
Governance
National green economy plan
The National Strategy for Sustainable Development and Action Plan set a strong precedent at its launch in 2010, but it expired in 2014 and no follow up strategy has yet been published. A very brief Green Economy Accord was published in 2011, and the National Development Plan does make some reference to sustainability, but overall South Africa is almost entirely lacking in strategic direction on green economy.
The National Strategy for Sustainable Development and Action Plan set a strong precedent at its launch in 2010, but it expired in 2014 and no follow up strategy has yet been published. A very brief Green Economy Accord was published in 2011, and the National Development Plan does make some reference to sustainability, but overall South Africa is almost entirely lacking in strategic direction on green economy.
Inclusive governance
The National Department of Women was established in 2013 within the Department of Environmental Affairs, with a mandate for national consultation on policy. However, little progress since then and no information found on corporate governance reforms.
The National Department of Women was established in 2013 within the Department of Environmental Affairs, with a mandate for national consultation on policy. However, little progress since then and no information found on corporate governance reforms.
SDG business strategy
The National Strategy for Sustainable Development, now five years out of date, did propose the development of monitoring and reporting tools for businesses on sustainability, and there has been some voluntary development of such by the private sector itself. However, little government direction and no follow-up legislation found.
The National Strategy for Sustainable Development, now five years out of date, did propose the development of monitoring and reporting tools for businesses on sustainability, and there has been some voluntary development of such by the private sector itself. However, little government direction and no follow-up legislation found.
Wealth accounting
There is widespread awareness of multi-capital approach to national wealth accounting in the public and private sector; social and environmental capitals are even included in the Auditor General’s reports and integrated reporting initiatives within the private sector. Natural capital accounts, in collaboration with UN SEEA, are in development, but there is no evidence yet that the SA national statistics department, government are exploring further national wealth accounting.
There is widespread awareness of multi-capital approach to national wealth accounting in the public and private sector; social and environmental capitals are even included in the Auditor General’s reports and integrated reporting initiatives within the private sector. Natural capital accounts, in collaboration with UN SEEA, are in development, but there is no evidence yet that the SA national statistics department, government are exploring further national wealth accounting.
Finance
Green finance plan
Public commitments made to sustainable finance, but the strategy is light on details and no supporting policies could be found from the central bank. The National Strategy for Sustainable Development gestures towards financing for green economy programmes, clean technologies etc, but this document now five years out of date and implementation on these aspirations patchy at best.
Public commitments made to sustainable finance, but the strategy is light on details and no supporting policies could be found from the central bank. The National Strategy for Sustainable Development gestures towards financing for green economy programmes, clean technologies etc, but this document now five years out of date and implementation on these aspirations patchy at best.
Green fiscal & monetary policy
There is no national green procurement policy or practice in place; no evidence found of sustainability reviews for government budgets and/or monetary policy.
There is no national green procurement policy or practice in place; no evidence found of sustainability reviews for government budgets and/or monetary policy.
Safe & accountable banks
Some standardised stress testing according to IMF standards, as well as additional liquidity reserves held in case of emergency under the Basel III requirements, but no acknowledgement of environmental or social risks alongside financial ones.
Some standardised stress testing according to IMF standards, as well as additional liquidity reserves held in case of emergency under the Basel III requirements, but no acknowledgement of environmental or social risks alongside financial ones.
Pricing carbon
Some progress in this area: after almost a decade of delays, a carbon tax was finally passed into law in May 2019. Set at 8.34 USD per tonne of CO2e, allowances and exceptions mean the effective tax rate will be less than half that, with planned ratcheting of the rate from 2022. However, Climate Action Tracker rates the tax as “highly insufficient”.
Some progress in this area: after almost a decade of delays, a carbon tax was finally passed into law in May 2019. Set at 8.34 USD per tonne of CO2e, allowances and exceptions mean the effective tax rate will be less than half that, with planned ratcheting of the rate from 2022. However, Climate Action Tracker rates the tax as “highly insufficient”.
Sectors
Green sectoral policy plan
Some sectoral planning at the programme level in government departments, for example the National Cleaner Production Centre, but no overall sectoral policy.
Some sectoral planning at the programme level in government departments, for example the National Cleaner Production Centre, but no overall sectoral policy.
Small business support
Currently no formal government recognition of social enterprises; organisations are classed as either Not-for-Profit or For-Profit, with no properly legislated definition or support for blended organisations. Some government programmes on SMEs, but no specific initiatives for green SMEs from the government.
Currently no formal government recognition of social enterprises; organisations are classed as either Not-for-Profit or For-Profit, with no properly legislated definition or support for blended organisations. Some government programmes on SMEs, but no specific initiatives for green SMEs from the government.
Carbon budgeting
The Department of Environmental Affairs is leading the development of carbon budgeting mechanisms, which were used in 2015 to determine the country’s intended national decarbonisation commitments under the Paris Agreement. Nothing implemented since then, but proposals for budgets to guide the country towards its targeted 2025 emissions peak are on-going.
The Department of Environmental Affairs is leading the development of carbon budgeting mechanisms, which were used in 2015 to determine the country’s intended national decarbonisation commitments under the Paris Agreement. Nothing implemented since then, but proposals for budgets to guide the country towards its targeted 2025 emissions peak are on-going.
Clean energy policy
A strong medium-term vision marred by lack of ambition and the legacy of coal dependence. Targets are for a reduction in the share of fossil fuels in the energy mix from 86.5% in 2010 to 57% by 2030, with renewables set to fill 21% of the generation gap and nuclear the rest. Public sector investment in large-scale wind and solar is lagging – especially unfortunate given the huge potential for these technologies in the country. The October 2019 publication of the long-overdue Integrated Resource Plan, including new targets for renewables but continued support for coal expansion, may provide additional impetus.
A strong medium-term vision marred by lack of ambition and the legacy of coal dependence. Targets are for a reduction in the share of fossil fuels in the energy mix from 86.5% in 2010 to 57% by 2030, with renewables set to fill 21% of the generation gap and nuclear the rest. Public sector investment in large-scale wind and solar is lagging – especially unfortunate given the huge potential for these technologies in the country. The October 2019 publication of the long-overdue Integrated Resource Plan, including new targets for renewables but continued support for coal expansion, may provide additional impetus.
People
Green jobs
The now-expired National Strategy for Sustainable Development mentions green jobs, but lacked concrete measures; the 2011 Green Economy Accord also aspired to the creation of 5 million new jobs through sustainability and environmental programmes, but again little information on implementation.
The now-expired National Strategy for Sustainable Development mentions green jobs, but lacked concrete measures; the 2011 Green Economy Accord also aspired to the creation of 5 million new jobs through sustainability and environmental programmes, but again little information on implementation.
Pro-poor policy
South Africa’s “Working On…” and “Working For…” programmes are recognised world-wide as best practice for combining poverty alleviation projects with environmental restoration and nature conservation, contributing significantly to job creation, social inclusion and the low carbon economy.
South Africa’s “Working On…” and “Working For…” programmes are recognised world-wide as best practice for combining poverty alleviation projects with environmental restoration and nature conservation, contributing significantly to job creation, social inclusion and the low carbon economy.
Participatory policymaking
Evaluation of public policy does include several social and environmental indicators, including gender, and is undertaken by an independent commission, and the National Development Plan includes several frameworks for assessment of progress towards the SDGs, although no public consultations are currently scheduled.
Evaluation of public policy does include several social and environmental indicators, including gender, and is undertaken by an independent commission, and the National Development Plan includes several frameworks for assessment of progress towards the SDGs, although no public consultations are currently scheduled.
Innovative social protection
Limited innovation on social protection policies, with more focus on traditional basic grant schemes, but extensive biodiversity and restoration linked job creation programmes under the “Working For…” programmes. As of 2017, these projects create around 50,000 jobs every year, and target economic support for the most disenfranchised: underprivileged women, young people, disabled individuals, and those living with HIV/AIDS.
Limited innovation on social protection policies, with more focus on traditional basic grant schemes, but extensive biodiversity and restoration linked job creation programmes under the “Working For…” programmes. As of 2017, these projects create around 50,000 jobs every year, and target economic support for the most disenfranchised: underprivileged women, young people, disabled individuals, and those living with HIV/AIDS.
Nature
Ocean & land conservation
The current phase of the National Development Plan was adopted before the SDGs were passed, and thus the two are not particularly well aligned. With the next phase due in 2020, government has an opportunity to better integrate the SDGs into the NDP, but this may be challenging. Statistics South Africa has produced some reporting on SDG progress, including how the NDP echoes SDGs 14 & 15.
The current phase of the National Development Plan was adopted before the SDGs were passed, and thus the two are not particularly well aligned. With the next phase due in 2020, government has an opportunity to better integrate the SDGs into the NDP, but this may be challenging. Statistics South Africa has produced some reporting on SDG progress, including how the NDP echoes SDGs 14 & 15.
Natural capital accounts
South Africa has been a founder member of the SEEA Experimental Ecosystem Accounting mechanism since 2014, and Statistics South Africa has been consulting on the subject since 2017, with the country’s first natural capital accounting forum held in July 2019. Initial assessments are available, and the first draft of a plan for advancing ecosystems accounts is currently under revision.
South Africa has been a founder member of the SEEA Experimental Ecosystem Accounting mechanism since 2014, and Statistics South Africa has been consulting on the subject since 2017, with the country’s first natural capital accounting forum held in July 2019. Initial assessments are available, and the first draft of a plan for advancing ecosystems accounts is currently under revision.
Natural capital committee
The National Plan for Advancing Environmental-Economic Accounting 2017 proposed the creation of an independent natural capital committee, although this has yet to be implemented.
The National Plan for Advancing Environmental-Economic Accounting 2017 proposed the creation of an independent natural capital committee, although this has yet to be implemented.
Nature-based fiscal reform
Carbon tax passed 2019 to incentivise heavy polluters in industry and energy sectors to decarbonise, but tax rate remains low and revenue from the tax not earmarked for natural conservation or restoration. Some national budget reserved for conservation and restoration programmes through the environment ministry but this is not linked to a natural capital-based approach. OECD has in the past noted that there is scope for South Africa to further extend the use of targeted environmental taxes.
Carbon tax passed 2019 to incentivise heavy polluters in industry and energy sectors to decarbonise, but tax rate remains low and revenue from the tax not earmarked for natural conservation or restoration. Some national budget reserved for conservation and restoration programmes through the environment ministry but this is not linked to a natural capital-based approach. OECD has in the past noted that there is scope for South Africa to further extend the use of targeted environmental taxes.