South Africa

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.

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.

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.

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 General’s 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.

South Africa is in the process of developing a national green finance taxonomy, but wider plans for financial reform remain unclear. In May 2020, the National Treasury released the draft technical paper 'Financing a Sustainable Economy' as a foundational step towards encouraging more long-term investments in sustainable economic assets, activities and projects. A key recommendation of the paper was to “develop or adopt a taxonomy for green, social and sustainable finance initiatives, consistent with international developments, to build credibility, foster investment and enable effective monitoring and disclosure of performance”. A Taxonomy Working Group has since been established by the Treasury (comprising representatives from the Department of Environmental Affairs, Forestry and Fisheries; Department of Monitoring and Evaluation; the Johannesburg Stock Exchange, and the industry associations for banking, pensions, and asset management) and an initial phase of stakeholder engagement on a draft taxonomy is underway.

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.

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.

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.

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.

There is no formal government recognition of social enterprises. South Africa is in the process of developing a policy framework for the social and solidarity economy, with a National Social Economy Draft Green Paper released for consultation in February 2019. Initiatives such as the Business Incubation Policy, launched by the Department of Small Business Development and the Small Enterprise Development Agency, provide support to MSMEs through incubator, accelerator and hybrid programmes - but these do not specifically target social enterprises. There is some limited financial support for social enterprises which qualify as enhancing the participation of previously disadvantages people under the Broad-based Black Economic Empowerment policy framework.

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. 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.

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.

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.

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.

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.

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.

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.

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, with the country’s first natural capital accounting forum held in July 2019. South Africa recently published its first 10-year National Strategy for Natural Capital Accounting, and 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.

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.

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.