Monday, 07 March 2022

Toward a Just Transition Finance Roadmap for South Africa: Action Agenda 2022-2025

  • Year: 2022
  • Author(s): Sandy Lowitt (TIPS Research Fellow)

Research undertaken in 2021 generated an evidence base of just transition project characteristics and financing needs in South Africa. The Mpumalanga sample of 26  projects covered a range of economic diversification interventions. Projects with novel technology opportunities related to land, water rehabilitation and agricultural dominated the sample.  All the projects were designed specifically to provide alternative employment and livelihood opportunities for workers and communities negatively affected by climate change and decarbonisation activities. The research showed that decarbonisation projects and associated investments were predominantly technology driven and sought as their core outcome reduced carbon emissions. Just transition projects and associated investments were people driven and sought as their core outcome improved socio-economic circumstances such as increased employment, new livelihood opportunities, skills development, improved access to services, and increased community asset ownership. Adaptation investments were more closely aligned to just transition outcomes than decarbonisation outcomes. Based on this research, it is argued that while the funding for decarbonisation and just transition investments are fundamentally interrelated, intertwined (and usually negotiated as a single package of funding),decarbonisation transactions and just transition transactions will chase different outcome measures resulting in different risk return profiles and different instruments anddeployment channels. It is therefore necessary to understand just transition finance supply and demand as a separate use of funds.

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