COP26: Pledges are cheap & transition's expensive
Digital content team
Finance for developing nations to reach their Nationally Determined Contributions (NDCs) must be top of the COP26 agenda posited Barbara Creecy, Minister of Forestry & Fisheries and Environmental Affairs during a climate conversation with Business Day's Michael Avery and Investec's head of Sustainability, Tanya dos Santos.
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WATCH | COP26: Turning the tide
An eight-part series in the lead-up to COP26 to discuss whether we’re turning the tide on climate change.
This week Michael chats to Minister Barbara Creecy, Olivia Rumble, Tanya dos Santos and Melissa Fourie.
An eight-part series in the lead-up to COP26 to discuss whether we’re turning the tide on climate change.
This week Michael chats to Minister Barbara Creecy, Olivia Rumble, Tanya dos Santos and Melissa Fourie.
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- MA: Michael Avery – TV and radio personality and Business Watch host on Business Day TV
- BC: Barbara Creecy – Minister of Forestry & Fisheries and Environmental Affairs
- TDS: Tanya dos Santos – Investec's global head of Sustainability
- MF: Melissa Fourie - Executive Director of the Centre for Environmental Rights
- OR: Olivia Rumble – Director of Climate Legal
MA: Welcome you're watching Climate Conversations on Business Watch with me, Michael Avery as we build up to COP26 to discuss whether we're turning the tide on climate change brought to you by Investec.
And interestingly, children born this year are going to live their lives on a more drastically different planet than any other generation that came before them, thanks to the largely unmitigated progression of global climate change, that's according to research that was published in The Journal Science on Sunday.
It's an alarming prognosis that should really underscore the importance of taking urgent and significant steps to keep climate change in check. Just like with the impacts of climate change that we're already facing today; the researchers predict that developing nations will bear the brunt of the burden and that their wealthier neighbours will be able to avoid some of the worst.
Now this comes at a time when South Africa is looking for solutions to the Eskom crisis. We've got think tank Meridian Economics offering a 100 billion Rand solution accessing Global Green funding.
And as a high-level climate envoy meeting took place in Tshwane to discuss the issues earlier this week a key focus area for us here in still heavily coal-dependent developing South Africa, is what new commitments have been made to support developing countries respond to climate change and how much can South Africa offer given our developmental challenges and our dependence on fossil fuels. This should really be the call for action ahead of COP26 in Glasgow.
Well, to kick off this eight-week series of climate conversations, it's a great pleasure to welcome Minister Barbara Creecy, Minister of Forestry and Fisheries and Environmental Affairs; Olivia Rumble, a director at Climate Legal and co-author of Climate Change Law and Governance in South Africa; Tanya dos Santos, Global Head of Sustainability for Investec and Melissa Fourie, Executive Director of the Centre for Environmental Rights.
Minister, it doesn't pass notice that it's an all-woman panel today but given your conversations this week with climate envoys, which is led by the UK COP26 envoy John Merton. We had representatives from the UK, France, Germany, the EU, and the US, what was discussed in terms of commitments to support South Africa's response to climate change.
02:29 Barbara Creecy - "We're committed to changing but we need developed nations' help"
BC: Well, I think the central message which the South African delegation gave the climate envoys is that our country has adopted a significantly more ambitious nationally determined contribution.
The upper level of our NDC is compliant with the Paris Agreement's 2-degree target, the lower level is compliant with the 1.5-degree target. And where we get to on the spectrum really depends on the extent to which developed countries can honour their commitments in the Paris Agreement to support developing countries in their transition to lower carbon economies and more climate-resilient societies.
So we explored those issues with the climate envoys. The climate envoys wanted to understand where we wanted to begin with this transition and we explained the importance of decarbonising our electricity sector, which, as we all know, is the greatest contributor to greenhouse gas emissions in our country.
Obviously, our transport sector is the next most significant sector because that is the sector that is responsible for the second-highest cohort of greenhouse gases. And then lastly, I think we were talking about hydrogen, the green hydrogen value chain, as an important enabler of future shipping and aviation industries.
We're very clear as government that climate change poses enormous risks to our country, enormous physical risks. But it also poses enormous economic risks because as our major trading partners start to change their own economies to a lower carbon footprint, so many of our goods and services produced in this high carbon environment will become less competitive.
And we're very worried about some of the international developments around proposed carbon border taxes, as well as rapid disinvestment from high carbon intensity sectors. So we're committed to changing but we need help.
04:56 Does SA provide a compelling case study on how to transition from coal to clean energy?
MA: And that help really is all about what the Paris rule book is about to provide developing countries with funding and technical and other support to help them transition.
Minister just to stay with you for a second longer, I'm sure South Africa must present a very compelling case study in the emerging market context on how to get this right, on how to get a country so heavily dependent on coal to transition and to align to the Paris Agreement.
What was your sense, because I see at the end of the release yesterday, there's now going to be a technical working group, they're going to go away and get back to you on the mechanisms?
What was your sense for the appetite for the envoys to really deliver something tangible by the time that COP26 rolls around?
BC: I think that there is an appetite to support us. I think the real issue is the form in which the support comes. We all understand that our country is heavily indebted.
We understand that as a country, we have commitments to fiscal consolidation and I think what we were highlighting to the envoys is that if we are going to be able to sustain those other commitments, we've also got to look at support in the form of grant financing and also highly concessional financing.
So I think the envoys were committing to take back our views and revert in due course and of course, as you say, we are committed to setting up this joint technical task team so that we can see whether we can develop an enabling agreement by the time of COP26, which as we all know, is only in a month’s time.
06:37 Why wasn't the Minister of Resources and Energy in the meeting with the high-level envoy?
MA: Absolutely it's around the corner. Just one last issue around who was around the table, you had Treasury you had the Department of Trade, Industry and Competition, your ministry. B
But notably absent was the Department of Mineral Resources and Energy, given that this is really a coal conversation. We did have the minister in another conference saying he's not the Minister of Green Energy and inviting people to come and invest in coal. The optics look bad.
BC: Minister Mantashe and his team have been part of all of the processes in the build-up to the meeting with the envoys and I think that we share a common concern that we have to ensure energy security in our country, we have to ensure that as we talk on the one hand about decommissioning power stations, we've got to be clear about what we're going to be replacing those power stations with and how we're going to finance it.
So I think it's a common concern that we all share, we have to share, you know, in an energy-poor continent, how do we ensure that we continue to create an energy source that is accessible, affordable, and secure and stable for our economy and for our citizens.
07:51 Why is COP26 being billed as a "super COP"?
MA: There is a lot of talk around ESG with a big focus on the E. And really, we need to focus in a developing country context, what I'm hearing you say is on the S the social issues around socio-economic development, about jobs, all of that stuff.
Olivia, from your vantage point and you really have been following the COPs for a very long time now, what are the main negotiation points at this year's COP because it's being billed as something of a super COP since Paris of 2015?
OR: Yes, Michael, you're really right. It's gained quite a lot of momentum and seen as the next biggest COP after Paris and the reason for that is that the Paris Agreement contemplated that every country would go away and revise its nationally determined contribution in around 2020 and then within that provision express its highest level of ambition.
And because of COVID last year, a lot of countries were unable to revise their indices it requires quite extensive public participation processes.
Obviously, the COP was postponed last year and so there was particular momentum behind this year, and a lot of anticipation to see how ambitious different country NDCs would be. And at the same time, we've had a lot of science, as you quoted right at the beginning, coming out recently, spelling out the differences for example, between 1.5 and a 2-degree future, a lot more knowledge around sort of the implications for 2030, 2040, 2050.
And so the pressure has mounted for a demonstration by NDCs, and the countries behind them to show greater mitigation ambition.
Unfortunately, the latest studies seem to suggest and all the NDCs aren't in just yet, that they aren't really covering the gap that needs to be covered by science. And we're hoping to see at least in the final push just before this COP, a lot more ambition.
I think it's also a particularly important COP and you'll hear some people talk about it as a climate finance COP. It's not necessarily the case but it's been said because at this particular COP negotiations will start on the 2025 Climate Finance Goal.
And as Minister Creecy was just saying, climate finance is quite a critical component, particularly for a developing country from a mitigation perspective.
So if you read NDCs, for example, a lot of them from African countries say, we are willing to increase our ambition from 20% to say 40%, conditional on support in terms of finance, technology, capacity building, etc.
And historically, or at least, over the last couple of years, the studies are suggesting that the climate finance commitment of $100 billion per year hasn't been met.
So only about 70 out of the 100 is coming through. And so there's a huge push to see developed country parties delivering on that finance, and also to ramp up that finance quite significantly.
So it's a very exciting COP, there's a huge amount of pressure around it and we're all pretty excited to see what happens.
11:04 Why should the average South African care about COP, and what role to NGOs play?
MA: It's why we hear Boris Johnson, talking about coal, cash, cars and trees, and that cash being that 100 billion dollars and getting the developed world to actually fulfil those commitments.
Tanya, I mean for your clients for example, why should the average South African care about COP26? This seems to be something of an esoteric issue amongst climate nerds and climate financiers and geeks alike? Why should people care?
TDS: Well Michael, I guess I'm one of those climate nerds. You know, I've been following this climate conversation for more than 20 years now. And I've never seen the excitement and in the vibe around a COP, as you've seen with COP26.
So I think for me, that's really the defining difference with this COP. I remember going to COP11, I think it was 11 in Durban, which is 10 years ago, no one had a clue what it was about, the average person that I spoke to didn't know, it was oh some conference.
They couldn't tell you one thing about it, whereas now, every single stakeholder is engaged from government to industry, to clients, to staff, everyone wants to know, what is this about? What are our commitments?
What does it mean for us and how's it going to make any difference? So and I guess that for me is the most exciting part because so many COPs have come and gone, and not much happened.
And yet, I think this is the COP that will be probably the most defining COP. There seems to be genuine commitment across all stakeholders that this time things will change, this time things will be different.
MA: Well, let's hope we can get off of that red list so many people who do want to go are not forced into 10 days of quarantine and all the rest of it to get there.
And I'm sure that's important. I see you nodding Melissa, for the NGO sector very often has to operate on a shoestring budget. What role do you see for NGOs playing, heading into COP26 at the discussions?
MF: Yeah, I think that thanks Michael. I think that civil society has a major role to play here, and have already played a major role in the run-up to the COP.
I mean, I think it's important, it's correct what Tanya says that there is a lot of excitement and certainly we see this as an enormously and fast-changing space around climate change at the moment.
But at the same time, we also have to acknowledge that we are actually in a massive crisis, and the crisis is only intensifying. We saw the IPCC report released last month, and we know that things are happening much faster and with greater intensity than had been predicted.
And so this really, from a civil society point of view, looking globally, this is really a matter of life or death for many millions of people across the planet.
And so for the climate justice movement globally, there are a number of key issues that we want to see resolved at COP.
The first one is the issue of loss and damage and so this really relates to the cost that developing countries already have to bear as a result of past and existing climate impacts as a result of the actions of developed countries over the decades.
And so this includes the less visible impacts of climate change, the slow onset through sea-level rise through prolonged drought-like we see here in South Africa. And we talking about major losses and damages, many developing countries don't have the resources to deal with this.
And so we want to see out of this COP that developing countries providing the scale of funding for developing countries to address these costs and it's really to become a key conversation and a decision point at COP26.
And then the other huge issue for us is the issue of fossil fuels. I might be stating the obvious, but the NDCs on the table as we know as Olivia's alluded to is that we are not sufficient for us to meet 1.5-degree trajectory.
And so many of those NDCs also don't deal adequately with the actual phase-out of fossil fuels and with the issue of no new investments in any fossil fuels including oil and gas.
And so right now we see rich countries like the UK talking about the coal phase-out, but they're still issuing licenses for oil and gas and if this process is going to have any legitimacy this has to end.
We of course also support the South African government and Minister Creecy's efforts around increasing climate finance commitments, many developing countries don't have the fiscal space in the context of existing debt burden plus pandemic plus climate change to deal with these issues.
And of course, also the issues around adaptation and the way that adaptation has sort of taken a bit of a backseat over the last few years, we really want to see those issues coming to the fore in this COP.
15:42 - Finance for mitigation and adaption is SA government's focus
MA: Minister Creecy what is your team's focus going to be as you head into this COP26?
BC: Well, I think that, as others have said, the first big issue at this COP is the question of finance. And we have seen over many years, that developed countries have in fact failed to honour their commitments to developing countries for support, firstly, for mitigation, or for helping the economies of developing countries to move from high carbon intensity to lower carbon intensity.
But I think, as importantly, and very, very important on the African continent is the issue of finance for adaptation. What we know is that we are already living through the effects of climate change, drought, water shortage, extreme weather events, storms, sea-level rise, these are a reality for the African continent and for many developing countries.
And obviously, there is going to be a huge bill for adapting infrastructure, but also for making sure that certain sectors of the economy such as agriculture become climate proofed so that we can ensure food security.
Now the OECD has done research and they are estimating that developing countries are going to require over the next 15 years, something in the region of 3 to 4 trillion dollars.
So far, I think what's been put on the table at the most positive estimate is somewhere in the region of about 60 billion dollars. And most of that money is for mitigation, not for adaptation.
So we're saying there needs to be equality between the money that is available for mitigation and for adaptation and we're saying that honouring the past pledges with regard to financial commitment is a fundamental issue of re-establishing trust between developed and developing countries. I think that we've sorry, Michael...
MA: No, no, continue. I was just going to say that trust, I mean you've taken the first step with the climate envoys this week so that is something that we're leading the charge on.
BC: Yes. And I mean, obviously, we are happy as a country to have these conversations, but these conversations can't be limited to certain individual hand-picked countries.
All developing countries are facing these issues and all developing countries need support. Let's look at our neighbour Mozambique, one of their major cities was wiped out by Beira in one storm.
Where will Mozambique have the resources and the tax space to replace a city of that nature? And, you know, subsequent to that event which took place almost two years ago now we've seen two more tropical cyclones that have displaced I think the most recent one was about 7000 people.
So these events are ongoing and it's all developing countries that need support. I think the other issue is what exactly do we mean by an adaptation goal?
And when I attended the climate talks in the UK on the 25th and 26th of July, we suggested that just as we have concrete goals around mitigation, we need concrete goals around adaptation.
And we were saying that by 2030, we need to see a situation where we've improved the climate resilience of 50% of vulnerable people.
And by 2050, we've improved the climate resilience of 90% of vulnerable people. In the end, I think that is what underlies these issues is the question of climate justice. Here on the African continent historically, Africa has contributed 1% to carbon gas emissions and yet our continent is going to be one of the most severely affected with women in the subsistence agricultural sector carrying the greatest burden.
20:09 The role of business in addressing climate change
MA: I suppose it's appropriate then that we've got an all-woman panel as we kick off this eight-week series. I assure you men do care about climate change we've got many other male commentators lined up over the next eight weeks.
But it's a complex area and Tanya I wanted to bring you in on that point because it's not just mitigation it's adaptation and these negotiations have been ongoing for decades.
What do you see as the role of business here in addressing climate change? What should business and corporates be doing?
TDS: Well, Michael, I think obviously, business has a really crucial role to play, you know and coming from the banking sector we feel that there's been an unfair responsibility placed on the banking sector to monitor and almost manage what is happening in this space.
The pressure from shareholders and stakeholders and activists for us to stop or restrict our lending to certain high carbon-intensive industries is just growing and growing every year, so we're getting pressure on that side.
And then on the other side, we're getting pressure to set our net-zero emissions, which is incredibly hard for any company to do in any industry in South Africa if we don't have that guidance from government, when that is the crucial role that they play.
They hold that component. And so I guess what we're looking for is really the sector level guidelines and it's very encouraging to hear from Minister Creecy, that this is where the focus is, transport is a critical sector.
And we look forward to seeing what's happening with the other industries, because the role that we can play is really going to depend on what are those trajectories looking like and how quickly can we help finance that, depending on what that journey looks like?
MA: And my fear is that when you say net carbon zero by 2050, I mean, that's the next, next, next management teams, CEOs problems, so you can make the commitments where, how are you going to hold people accountable?
Olivia just as we've got four minutes to go. What do you see as some of the key sticking points as we build up to COP26?
OR: For sure, there's been exactly as Tanya was mentioning, a lot of push around net zero. If you look at the G20, or the ministers meeting prior to the G20 in October, there's a lot of push and pull around whether developing countries should be pulling out of coal completely by 2040.
There's still some debates somehow around whether we should be pushing for 1.5 or a 2-degree futures.
So if you look at the language coming out of the G20 ministers meeting, for example, it doesn't firmly endorse a 1.5-degree future. A definite sticking point, as everyone's been talking about is climate finance. So not just in terms of the quantum of finance, but the quality and the equity issues around how it's dispersed.
So equal lending between adaptation and mitigation finance. How can we transform the GCF, which is the main disperser of these funds in a way that makes it easier for developing countries, the conditionalities around finance, those types of things?
And then, most notably, it will be about the extent of ambition within existing NDCs.
23:34 Renewable energy as part of the Just Transition must be accelerated
MA: As a concluding thought, Melissa, and then back to you, Minister. Melissa are you encouraged that as a government here South Africa is speaking with a unified voice as we build up to COP26.
MF: Yeah there are many things that are encouraging, and certainly listening to Minister Creecy now, it's great to see and hear South Africa play a leading role and really standing in solidarity with other developing countries.
Here in South Africa, we have a big task ahead of us. Yes, that NDC is an improvement that Cabinet approved a few weeks ago it's an improvement, but it's certainly according to civil society organizations not far enough yet.
And I think the most important thing that we need to do is to really focus now on trying to meet the lower bound of that target that's broadly aligned with 1.5 degrees and that's going to take a significant effort and collaboration and coordination on all of us, including abandoning new coal projects that are still on the table of the environment in and outside of the IRP.
We can't be distracted by new gas infrastructure projects that you know, we can't, we're not going to need in future. We must accelerate the retirement of our coal fleet needless to say, and obviously most urgently as part of the Just Transition, we must dramatically scale up and accelerate our renewable energy build here in South Africa.
We are so far behind already. We now need to build around up to about four gigawatts of renewable energy per year for the rest of this decade just to catch up.
And so there are lots of positive spin-offs of this it's part of the discussions we having around the Just Transition and the Presidential Climate Commission, but there's a big task ahead of us
MA: A big task minister, you've got 30 seconds, can we get this Just Transition transaction off the ground in time for COP26?
BC: We're going to give it our best shot. I think we all understand that our futures and the futures of our children and our grandchildren are tied up with the decisions that we make today.
Time is running out, and we have no alternative but to put everything into making sure that we set our country on a better economic and social trajectory.
MA: There is certainly a great deal of energy as we build-up to this historic COP26.
That was Minister Barbara Creecy of Forestry and Fisheries and Environmental Affairs, joined around the table by Olivia Rumble, Director of Climate Legal and the co-author of Climate Change Law and Governance in South Africa, Tanya dos Santos, Global Head of Sustainability for Investec, and Melissa Fourie, Executive Director of the Centre for Environmental Rights with the first in this series of eight conversations on Climate Change on Business Watch with me, Michael Avery.
We're building up to COP26. And we're really going to put the spotlight on whether we're turning the tide on climate change brought to you by Investec.
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