Issued by Ismail Joosub on behalf of the FW de Klerk Foundation on 12/08/24

Introduction

On July 18 2024, President Cyril Ramaphosa signed the Climate Change Bill into law, marking a significant step forward in South Africa’s efforts to combat climate change. This newly enacted Climate Change Act aims to align national policies to facilitate a transition to a low-carbon, climate-resilient economy. As South Africa faces economic challenges and climate vulnerabilities, this law’s potential impact on the country’s economic and constitutional landscape deserves a thorough examination. This article will delve into the key provisions of the Act, its economic implications, its alignment with the Constitution and the future prospects and challenges it presents.

Background and Key Provisions

The Climate Change Act establishes a comprehensive framework for South Africa’s response to climate change, including mitigation and adaptation strategies. It aims to reduce greenhouse gas emissions, enhance climate resilience and create job opportunities in the emerging green economy. The Act also seeks to align national policies, ensuring coherent action across various sectors and levels of government.

Key provisions of the Act include:

• Establishing the functions of the Presidential Climate Commission (s10): The Act empowers the Presidential Climate Commission to oversee the national climate response. This body is tasked with ensuring a just transition to a low-carbon economy, balancing environmental goals with socio-economic considerations. The Commission’s role includes monitoring progress, advising on policy and facilitating stakeholder engagement across sectors.
• Outlining the roles of provinces and municipalities (s8 and s9): The Act delineates specific responsibilities for provincial and local governments in climate mitigation and adaptation. Provinces and municipalities are required to develop and implement climate action plans aligned with national objectives. This decentralised approach ensures that climate strategies are tailored to regional contexts, promoting local innovation and resilience.
• Supporting South Africa’s commitments under the Paris Agreement (s24): The Act reinforces South Africa’s Nationally Determined Contributions (“NDCs”), which set targets for reducing greenhouse gas emissions. It mandates the integration of NDC goals into national and sub-national policies, ensuring that climate actions are coherent and comprehensive. This alignment is crucial for meeting our international obligations under the Paris Agreement and enhancing the country’s global climate leadership.

Positive Economic Implications:

South Africa’s economy finds itself at a critical juncture, grappling with a trifecta of challenges: Persistent load shedding, soaring inflation and a heavy reliance on coal for energy. These issues have not only stunted economic growth, but also deepened the nation’s vulnerability, pushing it to the brink of a severe economic downturn. The current state reflects a broader struggle to balance energy needs with economic stability, creating a precarious situation that demands immediate and effective intervention.

This economic strain is compounded by a sluggish growth rate. The first quarter of 2024 saw a 0,1% contraction and, while there are signs of recovery, the path to robust economic stability remains uncertain. The National Treasury’s fiscal consolidation efforts and the Reserve Bank’s monetary policy are expected to offer some relief, but challenges persist.

Against this backdrop, the Act emerges as a crucial piece of legislation with the potential to drive positive change. The Act is designed to transition South Africa towards a more sustainable and resilient economy. By prioritising renewable energy sources and reducing the country’s dependence on coal, the Act promises to mitigate the energy shortages that have plagued businesses and households alike. This shift is not just an environmental imperative, but an economic necessity.

Constitutionally, the Act aligns with section 24 of the Constitution, which guarantees the right to an environment that is not harmful to health or well-being. Energy shortages and pollution directly undermine this right. By prioritising sustainable practices and reducing pollution, the Act seeks to uphold this constitutional promise, contributing to a healthier environment for all citizens.

While section 27 of the Constitution, which addresses socio-economic rights such as access to healthcare, may not be directly targeted by the Act, the Act’s broader goal of improving environmental conditions indirectly supports these rights. A healthier environment can enhance living conditions and support overall well-being, thereby contributing to the realisation of these fundamental rights.

South Africa’s economic challenges spotlight a system struggling with outdated energy infrastructure and unsustainable practices. The Act provides a vital opportunity to rejuvenate this system by promoting a green economy, which is anticipated to generate significant job opportunities and drive growth in emerging sectors.

Furthermore, meeting our NDCs under the Paris Agreement stands to significantly bolster South Africa’s economy. South Africa is one of more than 190 members of the United Nations Framework Convention on Climate Change who are parties to the eight-year-old Paris Agreement. By adhering to these targets, the country will drive investment in clean technologies and renewable energy sources, creating a surge of job opportunities in new industries. This commitment not only positions South Africa as a leader in global climate action, but also stimulates economic growth by attracting green investments and reducing dependency on volatile fossil fuels. As we meet our NDCs, we enhance energy security, mitigate climate risks and stimulate sustainable economic development, setting a foundation for long-term prosperity and resilience.

Negative Economic Implications

The transition to a low-carbon economy, while crucial for long-term sustainability, presents some immediate economic challenges. The Act’s push towards renewable energy and reduced reliance on coal inevitably disrupts traditional energy sectors. Coal mining, a significant employer in South Africa, faces potential job losses as the country shifts away from fossil fuels. These short-term disruptions could impact communities heavily dependent on coal-related jobs, exacerbating economic insecurity for many.

Managing this transition requires a careful, balanced approach to support affected workers and communities. Implementing retraining programmes and creating new job opportunities in emerging green industries are vital steps. Without these measures, the risk of increased unemployment and economic hardship for vulnerable populations could undermine the Act’s overall goals.

Additionally, ensuring that support mechanisms are in place to assist those most affected will be crucial. Effective policy design must integrate strategies to cushion the negative economic impacts while promoting the benefits of a green economy. By addressing these concerns proactively, South Africa can navigate the transition more smoothly, ultimately achieving a sustainable economic transformation that benefits all citizens.

Conclusion

The Climate Change Act signifies a notable step in constitutional advancement. By aligning with South Africa’s commitment to environmental rights under section 24 of the Constitution, the Act addresses critical issues such as pollution and energy inefficiencies. It promises to revitalise the economy through job creation in the green sector, demonstrating a proactive approach to economic resilience and sustainability.

However, its success in constitutional advancement hinges on how effectively it manages short-term disruptions in traditional sectors and supports affected communities. If implemented with a balanced strategy that mitigates economic hardships while promoting long-term benefits, the Act will not only advance constitutional goals, but also foster a more equitable and sustainable future for South Africa.