Greening SA’s economy in a post-COVID era

Posted on October 12, 2022

Economists from the Faculty of Economic and Management Sciences (EMS), Profs Margaret Chitiga-Mabugu, Roula Inglesi-Lotz, Heinrich Bohlmann and Dr Jessika Bohlmann, are conducting a study funded by the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) focusing on the economy-wide and regional impact of the South African energy transition under the principle of ‘leaving no one behind’.

On 22 September 2022, the group of economists hosted a roundtable discussion to present the preliminary results of their study to key stakeholders from industry, academia, and government who have done important work on the Just Energy Transition (JET) and other aspects related to energy and environmental economics. Hosted at the School of Public Management and Administration (SPMA) Leadership Centre in EMS, the primary goal of the event was to have constructive discussions with the participants about the research being conducted and modelling efforts, and learn more about how the participants’ experiences and research knowledge could improve the study.

           Participants at the Just Greening of the South African Economy roundtable discussion

Aside from its macroeconomic qualitative component, the study examines the quantitative impact of an energy transition across a broad range of socioeconomic indicators, both at the national and regional levels.

During the discussion, which was based on the study, the key aspects of the consequences of the JET were highlighted. The economists noted that the shift away from coal-fired generation will have a meaningful impact on reducing CO2 emissions in South Africa and that, at a national level at least, there is a possibility of achieving a double dividend when greening the SA energy sector (at a national level), as well as a triple dividend if a just transition in Mpumalanga can be achieved – which will lead to improved growth, higher employment and lower inequality.  

The transition away from fossil fuels is important for greening South Africa’s economy. Although the energy transition is important at a national level, a regional analysis is important – particularly for the Mpumalanga economy – which is underperforming in its greening transition due to absence of targeted mitigation strategies, highlighted the researchers.

The researchers anticipate that low-paid and low-skilled workers in coal mining regions will be the most vulnerable in the near future, while potential labour mobility problems and inability of other Mpumalanga industries to pick up the slack in terms of output and exports may further hamper their employment prospects.

Given the transitioning challenges in Mpumalanga, the researchers stated that massive investment will be needed in the province’s industrial sector and its workers to achieve a just energy transition.

The group is currently finalising the final report and collating the feedback from the roundtable discussion to prepare a policy brief that will be available to the public. The report will be key to informing stakeholders on the economy-wide impact that the JET will have on the South African economy.

The roundtable is hopefully the beginning of a continuous stakeholder engagement towards sustainable energy and environmental solutions for South Africa. 

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