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. And the country has been particularly hard hit by COVID-19, which has had a devastating impact in social and economic terms.
One of the most ethnically and culturally diverse nations in the world – with 11 different official languages enshrined under the constitution – South Africa 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. Despite boasting the second highest GDP 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 Its energy system is outdated, mismanaged and heavily dependent on coal; load-shedding and blackouts are endemic.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 close to running out of water entirely.
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-19 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 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 in dire need of structural economic reform to chart a path out of potential COVID-19 recession, the opportunity to seize a greener, fairer future is there for the taking.
Policy Scores
Last updated 23 Oct 2022
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
Multiple policy documents such as the National Development Plan, the Innovation Plan, the Green Economy Accord, and the National Strategy for Sustainable Development & Action Plan called for the transition to a green economy. Despite setting a strong early precedent, these plans have expired leaving South Africa lacking a coherent, strategic green economy vision at present - with sectoral approaches falling short of driving a wider transformation. However, a plan could be on the horizon given the recent adoption of the National Climate Change Adaptation Strategy in 2020 and the Climate Change Bill currently being tabled in Parliament.
Multiple policy documents such as the National Development Plan, the Innovation Plan, the Green Economy Accord, and the National Strategy for Sustainable Development & Action Plan called for the transition to a green economy. Despite setting a strong early precedent, these plans have expired leaving South Africa lacking a coherent, strategic green economy vision at present - with sectoral approaches falling short of driving a wider transformation. However, a plan could be on the horizon given the recent adoption of the National Climate Change Adaptation Strategy in 2020 and the Climate Change Bill currently being tabled in Parliament.
Inclusive governance
Social dialogue is core to South Africa's policymaking, notably through the multi-stakeholder National Economic Development and Labour Council. There have been several attempts at creating a social compact in favour of a just transition (such as the Green Economy Accord, Decent Work Country Programme, and National Planning Commission process) but these are yet to deliver meaningful results. The privately-appointed Presidential Climate Change Coordinating Commission aims to provide a platform for engagement with selected key stakeholders on just transition policies. South Africa has also committed to developing and enacting a host of legislative and policy frameworks aimed at promoting gender equality and eliminating gender-based discrimination, including establishing a National Department for Women within the Department of Environmental Affairs with a mandate for national consultation on policy.
Social dialogue is core to South Africa's policymaking, notably through the multi-stakeholder National Economic Development and Labour Council. There have been several attempts at creating a social compact in favour of a just transition (such as the Green Economy Accord, Decent Work Country Programme, and National Planning Commission process) but these are yet to deliver meaningful results. The privately-appointed Presidential Climate Change Coordinating Commission aims to provide a platform for engagement with selected key stakeholders on just transition policies. South Africa has also committed to developing and enacting a host of legislative and policy frameworks aimed at promoting gender equality and eliminating gender-based discrimination, including establishing a National Department for Women within the Department of Environmental Affairs with a mandate for national consultation on policy.
SDG business strategy
The National Strategy for Sustainable Development and Action Plan 2011-2014 did propose the development of monitoring 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 exists. The Department of Planning, Monitoring and Evaluation is engaging with UNDP on alignment work with the SDG Impact Standards in 2020 and is soliciting feedback from stakeholders on developing a standardised impact measurement and reporting tool.
The National Strategy for Sustainable Development and Action Plan 2011-2014 did propose the development of monitoring 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 exists. The Department of Planning, Monitoring and Evaluation is engaging with UNDP on alignment work with the SDG Impact Standards in 2020 and is soliciting feedback from stakeholders on developing a standardised impact measurement and reporting tool.
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 included in the Auditor Generals reports and integrated reporting initiatives within the private sector. Natural capital accounts aligned with the UN SEEA Framework have been developed under the Natural Capital Accounting and Valuation of Ecosystem Services Project (2017-2021). The project culminated with the national statistics office publishing a 10-year National Natural Capital Accounting Strategy. While additional natural capital accounts are being developed under the Ecological Infrastructure for Water Security project, there is no evidence as yet that South Africa is looking to expand this further to 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 included in the Auditor Generals reports and integrated reporting initiatives within the private sector. Natural capital accounts aligned with the UN SEEA Framework have been developed under the Natural Capital Accounting and Valuation of Ecosystem Services Project (2017-2021). The project culminated with the national statistics office publishing a 10-year National Natural Capital Accounting Strategy. While additional natural capital accounts are being developed under the Ecological Infrastructure for Water Security project, there is no evidence as yet that South Africa is looking to expand this further to national wealth accounting.
Finance
Green finance plan
The Treasurys technical paper 'Financing a Sustainable Economy', published in May 2020 as part of South Africas Sustainable Finance Initiative, sets out a series of reform recommendations for government, including the development of a green taxonomy, publication of technical guidance on disclosure of environmental and social (including climate-related) risk, the development of a benchmark climate risk scenario for use in stress tests, and enhanced use of sustainable finance mechanisms such as green bonds.
Following a two-year consultation process, South Africa recently launched its National Green Finance Taxonomy establishing an official classification of assets, projects and sectors which can be considered green. The taxonomy aims to improve consistency and credibility of green reporting and enable financial participants to track and demonstrate their green credentials. However, present coverage limits the classification of activities to climate mitigation and adaptation objectives, with the inclusion of broader environmental objectives (sustainable water resources, pollution prevention, ecosystem protection, sustainable resource use) anticipated in a future update.
Though the taxonomy is a significant step forward, South Africas commitment to broader green financial reform remains unclear, with limited discussion on the adoption of sustainable finance instruments.
The Treasurys technical paper 'Financing a Sustainable Economy', published in May 2020 as part of South Africas Sustainable Finance Initiative, sets out a series of reform recommendations for government, including the development of a green taxonomy, publication of technical guidance on disclosure of environmental and social (including climate-related) risk, the development of a benchmark climate risk scenario for use in stress tests, and enhanced use of sustainable finance mechanisms such as green bonds.
Following a two-year consultation process, South Africa recently launched its National Green Finance Taxonomy establishing an official classification of assets, projects and sectors which can be considered green. The taxonomy aims to improve consistency and credibility of green reporting and enable financial participants to track and demonstrate their green credentials. However, present coverage limits the classification of activities to climate mitigation and adaptation objectives, with the inclusion of broader environmental objectives (sustainable water resources, pollution prevention, ecosystem protection, sustainable resource use) anticipated in a future update.
Though the taxonomy is a significant step forward, South Africas commitment to broader green financial reform remains unclear, with limited discussion on the adoption of sustainable finance instruments.
Green fiscal & monetary policy
There is no national green procurement policy or practice in place. A 2006 environmental fiscal reform paper proposed the introduction of environmentally-related taxes in the electricity sector and new water pricing strategies, but these were not implemented and the paper has since expired. The Treasury recently commissioned another fiscal sustainability review, exploring the potential for new environmental reforms and tax instruments. A technical paper on sustainable finance has also been published, supporting the development of a sustainable financial sector.
There is no national green procurement policy or practice in place. A 2006 environmental fiscal reform paper proposed the introduction of environmentally-related taxes in the electricity sector and new water pricing strategies, but these were not implemented and the paper has since expired. The Treasury recently commissioned another fiscal sustainability review, exploring the potential for new environmental reforms and tax instruments. A technical paper on sustainable finance has also been published, supporting the development of a sustainable financial sector.
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
After almost a decade of delays, a carbon tax was finally passed into law in May 2019. The tax covers about 80% of South Africa's GHG emissions and is complemented by a carbon budget. Set at 8 USD per tonne of CO2e (to increase progressively), allowances and exceptions mean the effective tax rate will be less than half that amount. Climate Action Tracker rates the tax as highly insufficient at present, with recent analysis suggesting that it does not contribute to emissions reductions due to its effectively low levy. However, the tax is currently in its trial phase, with much resting on the planned ratcheting of the rate from 2022 onwards.
After almost a decade of delays, a carbon tax was finally passed into law in May 2019. The tax covers about 80% of South Africa's GHG emissions and is complemented by a carbon budget. Set at 8 USD per tonne of CO2e (to increase progressively), allowances and exceptions mean the effective tax rate will be less than half that amount. Climate Action Tracker rates the tax as highly insufficient at present, with recent analysis suggesting that it does not contribute to emissions reductions due to its effectively low levy. However, the tax is currently in its trial phase, with much resting on the planned ratcheting of the rate from 2022 onwards.
Sectors
Green sectoral policy plan
Some sectoral sustainability planning at the programme level in government departments (for example the National Cleaner Production Centre, the Energy Efficiency Strategy, and the Extended Producer Responsibility Scheme), but no overarching sectoral policy.
Some sectoral sustainability planning at the programme level in government departments (for example the National Cleaner Production Centre, the Energy Efficiency Strategy, and the Extended Producer Responsibility Scheme), but no overarching sectoral policy.
Small business support
South Africa recently published its 10-year National Integrated Small Enterprise Development Masterplan which aims to support the development and growth of SMEs in line with the vision of the country's White Paper 'National Strategy for the Development and Promotion of Small Business in South Africa'. Though comprehensive, and aligned to the National Development Plan, the masterplan sets out generalised support for SMEs and does not reference green businesses or social enterprise. Although South Africa has a dedicated Department of Small Business Development which hosts several initiatives such as the Department of Trade, Industry and Competitions Incubation Support Programme and the Black Industrialists Scheme these do not focus on or encourage the development of green business models.
In April 2020, South Africa launched a USD$27 million Green Outcomes Fund (GOF) through a partnership with GreenCape, a non-profit organization specialising in the green economy, and the National Treasurys Employment Fund. The GOF provides outcomes-based matched (concessional) funding to local investment funds to support investment in local SMMEs that make a demonstrable contribution to South Africas green economy, as well as job and enterprise creation in priority impact areas (such as the provision of renewable energy, water, waste and land management services). The scheme aims to incentivise greater investment in green businesses, and establish standardised metrics which can be used to track verifiable green outcomes. While a promising start, there is further to go in terms of nationwide regulatory support and training schemes for green SMEs.
South Africa recently published its 10-year National Integrated Small Enterprise Development Masterplan which aims to support the development and growth of SMEs in line with the vision of the country's White Paper 'National Strategy for the Development and Promotion of Small Business in South Africa'. Though comprehensive, and aligned to the National Development Plan, the masterplan sets out generalised support for SMEs and does not reference green businesses or social enterprise. Although South Africa has a dedicated Department of Small Business Development which hosts several initiatives such as the Department of Trade, Industry and Competitions Incubation Support Programme and the Black Industrialists Scheme these do not focus on or encourage the development of green business models.
In April 2020, South Africa launched a USD$27 million Green Outcomes Fund (GOF) through a partnership with GreenCape, a non-profit organization specialising in the green economy, and the National Treasurys Employment Fund. The GOF provides outcomes-based matched (concessional) funding to local investment funds to support investment in local SMMEs that make a demonstrable contribution to South Africas green economy, as well as job and enterprise creation in priority impact areas (such as the provision of renewable energy, water, waste and land management services). The scheme aims to incentivise greater investment in green businesses, and establish standardised metrics which can be used to track verifiable green outcomes. While a promising start, there is further to go in terms of nationwide regulatory support and training schemes for green SMEs.
Carbon budgeting
The Department of Environmental Affairs is leading the development of carbon budgeting mechanisms, which were used in 2015 to determine the countrys intended national decarbonisation commitments under the Paris Agreement. South Africa is currently in the transitional phase of its carbon budget implementation timeline, with submissions made on a voluntary basis receiving a 5% carbon tax allowance. This phase has been extended for a further two years until January 2023, when operationalisation of the piloted budget methodology will kick in (Phase 2). It's only at this point that carbon budgeting will become mandatory for entities meeting the legislated threshold under the Climate Change Act.
The Department of Environmental Affairs is leading the development of carbon budgeting mechanisms, which were used in 2015 to determine the countrys intended national decarbonisation commitments under the Paris Agreement. South Africa is currently in the transitional phase of its carbon budget implementation timeline, with submissions made on a voluntary basis receiving a 5% carbon tax allowance. This phase has been extended for a further two years until January 2023, when operationalisation of the piloted budget methodology will kick in (Phase 2). It's only at this point that carbon budgeting will become mandatory for entities meeting the legislated threshold under the Climate Change Act.
Clean energy policy
A solid medium-term vision marred by lack of political support and strong resistance from vested interests in the coal value chain. 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. Between 2011 and 2018, the government completed four bidding windows for the competitive REIPPPP tender (part of its Integrated Resource Plan 2010-2030), successfully bringing in 6.4GW of renewable energy-based electricity generation. However, the rollout of embedded generation stalled in 2018 and has been hindered by policy and regulatory bottlenecks. South Africa's 2019 Integrated Resource Plan includes new targets for electricity generation from renewables, albeit alongside continued support for coal expansion. Meanwhile, targets to increase the share of renewables are being undermined Eskom's decision to cut energy supplied by variable sources during the pandemic and the country's carbon-intensive economic recovery measures.
A solid medium-term vision marred by lack of political support and strong resistance from vested interests in the coal value chain. 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. Between 2011 and 2018, the government completed four bidding windows for the competitive REIPPPP tender (part of its Integrated Resource Plan 2010-2030), successfully bringing in 6.4GW of renewable energy-based electricity generation. However, the rollout of embedded generation stalled in 2018 and has been hindered by policy and regulatory bottlenecks. South Africa's 2019 Integrated Resource Plan includes new targets for electricity generation from renewables, albeit alongside continued support for coal expansion. Meanwhile, targets to increase the share of renewables are being undermined Eskom's decision to cut energy supplied by variable sources during the pandemic and the country's carbon-intensive economic recovery measures.
People
Green jobs
There is no specific green jobs policy in place currently. The expired National Strategy for Sustainable Development mentions green jobs, but lacked concrete measures; the 2011 Green Economy Accord (which formed part of the New Growth Path framework) also aspired to the creation of 5 million new jobs by 2020 through sustainability and environmental programmes, but again provided little information on implementation. Despite lagging in planning terms, there are signs of ambition here, with South Africa's Covid-19 Economic Reconstruction and Recovery Plan incorporating a Presidential Employment Stimulus aiming to create 800,000 jobs, including in some green sectors.
There is no specific green jobs policy in place currently. The expired National Strategy for Sustainable Development mentions green jobs, but lacked concrete measures; the 2011 Green Economy Accord (which formed part of the New Growth Path framework) also aspired to the creation of 5 million new jobs by 2020 through sustainability and environmental programmes, but again provided little information on implementation. Despite lagging in planning terms, there are signs of ambition here, with South Africa's Covid-19 Economic Reconstruction and Recovery Plan incorporating a Presidential Employment Stimulus aiming to create 800,000 jobs, including in some green sectors.
Pro-poor policy
South Africa has embedded a strong pro-poor approach within its development policies such as the Basic Conditions of Employment Act, employment tax incentives and sectoral minimum wage laws, and a key goal of the country's national and rural development plans is to eliminate poverty and reduce inequality by 2030. The Working On and Working For programmes are recognised worldwide as best practice for combining poverty alleviation projects with environmental restoration and nature conservation, contributing significantly to job creation and social inclusion. During the pandemic, a Presidential Employment Stimulus provided new public sector jobs for the unemployed which included green industries.
South Africa has embedded a strong pro-poor approach within its development policies such as the Basic Conditions of Employment Act, employment tax incentives and sectoral minimum wage laws, and a key goal of the country's national and rural development plans is to eliminate poverty and reduce inequality by 2030. The Working On and Working For programmes are recognised worldwide as best practice for combining poverty alleviation projects with environmental restoration and nature conservation, contributing significantly to job creation and social inclusion. During the pandemic, a Presidential Employment Stimulus provided new public sector jobs for the unemployed which included green industries.
Participatory policymaking
Since 2015, South Africa has required all draft policies and regulations go through a socio-economic impact assessment where the impacts of the proposed legislation on a broad range of stakeholders are considered. Impacts are assessed against five criteria: social cohesion, security, economic inclusion (employment creation and equity), economic growth and investment, and environmental sustainability. Key policy proposals are also discussed at the quadripartite National Economic Development and Labour Council where they are subject to public consultations processes. However, consultation processes are not always effective and social dialogue processes can be used to hinder progress. Looking ahead, the newly established Presidential Climate Change Coordinating Commission is expected to facilitate some stakeholder engagement on just transition policies.
Since 2015, South Africa has required all draft policies and regulations go through a socio-economic impact assessment where the impacts of the proposed legislation on a broad range of stakeholders are considered. Impacts are assessed against five criteria: social cohesion, security, economic inclusion (employment creation and equity), economic growth and investment, and environmental sustainability. Key policy proposals are also discussed at the quadripartite National Economic Development and Labour Council where they are subject to public consultations processes. However, consultation processes are not always effective and social dialogue processes can be used to hinder progress. Looking ahead, the newly established Presidential Climate Change Coordinating Commission is expected to facilitate some stakeholder engagement on just transition policies.
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. However, Statistics South Africa has produced some reporting on SDG progress, including how the NDP echoes SDGs 14 & 15. While South Africa has several strategies related to ocean and land conservation (such as the Biodiversity Strategy and Action Plan, Strategy for Plant Conservation and Climate Change Adaptation Strategy) alongside extensive protected conservation areas, implementation and enforcement are haphazard. Land, water and air pollution, as well as conflict with extractive activities remain highly problematic issues.
The current phase of the National Development Plan was adopted before the SDGs were passed and thus the two are not particularly well aligned. However, Statistics South Africa has produced some reporting on SDG progress, including how the NDP echoes SDGs 14 & 15. While South Africa has several strategies related to ocean and land conservation (such as the Biodiversity Strategy and Action Plan, Strategy for Plant Conservation and Climate Change Adaptation Strategy) alongside extensive protected conservation areas, implementation and enforcement are haphazard. Land, water and air pollution, as well as conflict with extractive activities remain highly problematic issues.
Natural capital accounts
South Africa is at the forefront of the global movement on natural capital accounting, having been a founding member of the UNSD's Experimental Ecosystem Accounting mechanism since 2014 (a project which seeks to pilot the SEEA accounting framework in the country). Statistics South Africa and the South African National Biodiversity Institute have been consulting on the subject since 2017.
South Africa recently published its first 10-year National Strategy for Natural Capital Accounting, following an extensive co-development process with a range of stakeholders. Initial natural capital accounts are now available for key sectors such as water, energy, fisheries and minerals, while a broader range of accounts are under development. To support implementation and monitoring of the national strategy, South Africa will hold a second National Natural Capital Accounting Forum in October 2022.
South Africa is at the forefront of the global movement on natural capital accounting, having been a founding member of the UNSD's Experimental Ecosystem Accounting mechanism since 2014 (a project which seeks to pilot the SEEA accounting framework in the country). Statistics South Africa and the South African National Biodiversity Institute have been consulting on the subject since 2017.
South Africa recently published its first 10-year National Strategy for Natural Capital Accounting, following an extensive co-development process with a range of stakeholders. Initial natural capital accounts are now available for key sectors such as water, energy, fisheries and minerals, while a broader range of accounts are under development. To support implementation and monitoring of the national strategy, South Africa will hold a second National Natural Capital Accounting Forum in October 2022.
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. While an NCA Advisory Committee has been recently established, it looks set to support the development of the newly released National Capital Accounting Strategy rather than act in an independent advisory capacity.
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. While an NCA Advisory Committee has been recently established, it looks set to support the development of the newly released National Capital Accounting Strategy rather than act in an independent advisory capacity.
Nature-based fiscal reform
Carbon tax passed 2019 to incentivise heavy polluters in industry and energy sectors to decarbonise, but the tax rate remains low and revenues are not earmarked for natural conservation or restoration. There are a few environmental levies on specific products such as cars, tyres and filament bulbs. Some national budget reserved for conservation and restoration programmes through the environment ministry but this is not currently 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, and the Treasury is preparing to publish an environmental fiscal reform paper exploring the national environmental tax structure.
Carbon tax passed 2019 to incentivise heavy polluters in industry and energy sectors to decarbonise, but the tax rate remains low and revenues are not earmarked for natural conservation or restoration. There are a few environmental levies on specific products such as cars, tyres and filament bulbs. Some national budget reserved for conservation and restoration programmes through the environment ministry but this is not currently 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, and the Treasury is preparing to publish an environmental fiscal reform paper exploring the national environmental tax structure.