Budget speech 2023: Combating climate change and energy crisis in SA

During his 2023 budget speech, finance minister Enoch Godonwana addressed South Africa’s electricity crisis, saying it goes hand in hand with climate change challenges.

During the speech, Godongwana presented government’s proposals for spending and revenue collection and explained how these plans will be put into action.

Budget speech 2023

Energy crisis

Gogongwana said it is vital for South Africa to implement a “just transition” to a low-carbon economy, which means transitioning to a cleaner source of energy.

This, in turn, would limit the emission of greenhouse gases and boost sustainable economic growth in the country, while also alleviating the current electricity crisis.

Godongwana said since South Africa is already among the most water-scarce countries in the world, this initiative would be vital in the face of extreme weather events in the future (floods, heatwaves, droughts, etc).

Climate change challenges

A research paper published in the Journal of Climate found that South Africa is likely to experience more frequent and intense heat waves in the future.^[1]

Another study in the journal Climate Dynamics projected that future rainfall in South Africa is likely to become more variable.^[2]

Thus, climate change is exacerbating South Africa’s water crisis by altering rainfall patterns and increasing the frequency and severity of extreme weather events.

To address these climate change challenges, Godongwanasaid the Just Energy Transition^[3] plan includes investing in new energy technologies, electric vehicles, and energy-efficient appliances.

Upskilling and job opportunities

A just transition to a low-carbon economy will benefit all South Africans by driving economic growth, creating jobs, and increasing our energy security, while addressing the serious threat of climate change.

The new transition and technological ventures tied to it won’t replace humans, however.

Godongwana said it is vital to ensure the communities tied to high-emitting energy industries (such as iron and steel, chemicals and plastics, and cement) are not left behind.

Instead, they should be equipped and empowered with new skills, as well as economic and employment opportunities.

Sectors to see the biggest ROI include electric vehicles, green hydrogen, renewable energy, and manufacturing.

What is the Just Energy Transition plan?

The investment plan was launched at the COP27 conference in 2022 and aims to make significant investments in South Africa over the coming five years.^[4]

Godongwana said these investments will be supported by a coherent industrial policy to enable innovation and economic diversification.

Furthermore, Godongwana said the International partner Group pledged $8.5 billion (approximately R155 billion) to support South Africa’s transition.

While this would go a long way, Godongwana said developed countries could still do more to support these transitions in developing nations.

References:

^{[1] Heatwaves in the Future Warmer Climate of South Africa; I. Mbokodo, M. Bopape, H. Chikoore, F. Engelbrecht, N. Nethengwe; 10 February 2020
[2] SA’s Future Climate: Trends and Projections: Contemporary Changes and New Directions; The Geography of South Africa (pp.305-312); Mark R. Jury, January 2019.
[3] SA’s Just Energy Transmission Investment Plan.
[4] Just Energy Transmission COP27 announcement.}