DA welcomes COP26 announcement of Green Financing deal but some questions remain
5 November 2021
The Democratic Alliance welcomes the recent announcement at COP26 of a 129-billion rand grants package designed to accelerate a transition away from coal power towards renewable alternatives.
South Africa and other developing countries are set to benefit greatly from this programme as the current costs of the transition are difficult for most developing countries to afford.
The DA would like to thank the countries involved in sponsoring this agreement for taking cognisance of the economic and structural challenges faced by the developing world in moving away from coal power.
Earlier this year the DA called for the developed world to do more to assist poorer countries and it is fantastic to see the progressive moves that are now taking place. It is important however not to get too excited until we know all the details as to how the proposed funding will be spent and what the long term implications will be.
South Africa currently generates the vast majority of its electricity from coal with the beleaguered state-owned ESKOM continuing to break down on a regular basis after many years of ANC mismanagement and neglect.
ESKOM alone produces over 40% of all greenhouse gas emissions in South Africa and up till now the ANC has not only failed to maintain the power plants, they have also failed to effectively begin any sort of effective transition towards renewable energy.
South Africa has some of the highest solar potential in the world and the existing grids in the Northern Cape are already unable to fully cope with the amount of energy being generated by solar installations. If we wish to move away from our reliance on dirty energy, we need to ensure that we have the systems and networks in place to get the energy to the citizens and markets where it is most needed.
The recent announcement at COP26 of a Green Grids initiative, spearheaded by the Climate Parliament is another step in the right direction. DA members are part of the Climate Parliament and were honored to participate in a virtual session at COP26 on Tuesday where the Green Grids initiative was announced and supported by British Prime Minister Boris Johnson and Indian Prime Minister Nerendra Modi.
The question on everyone’s lips at COP26 is how the planet and its people will adapt to our fast changing climate.
The time for dithering and debating about climate change is over and we have to now speed up and intensify our own move towards cleaner energy which will not only help save our climate, but will also help create thousands of new jobs. It is important to recognise that we will not create these new job opportunities through state interventions alone.
Government must embrace greater private sector involvement to ensure that any new initiatives are rolled out with speed and efficiency and not used to simply benefit connected tenderpreneurs. Government must start dismantling the power and patronage networks that exist within national state institutions and devolve more and more authority functional local governments and the private sector.
As welcome as this deal is, it raises a number of questions. The first, and foremost among these is: how exactly is the deal to be structured? Will it be a loan or a grant? If the former, can South Africa afford to incur more debt on its already strained fiscus – especially when some of that debt will have to be used to service the floundering ESKOM.
Secondly, what conditions will be attached to the funding? What are the expectations of the developed nations who are providing this valuable resource? What do we have to commit to, in order to get the money?
Thirdly: how exactly will it be implemented? If the proposal is to prop up ESKOM, that raises the very ugly spectre of state capture and maladministration all over again. It is essentially pouring money down a black hole, hoping for some kind of miracle.
If, on the other hand it is to expand the reach of independent power producers (and more specifically renewable IPPs), what will be done to speed up the independence of our transmission grid operator, to create a level playing field between IPPs and ESKOM?
And then there is the issue of oversight. Who will administer this funding? The Department of Mineral Resources and Energy has demonstrated its complete inability to properly manage the Risk Mitigation Independent Power Producers Procurement Programme.
What makes us think they will do better this time? What role will Parliament play in ensuring transparency and accountability in the process? How will it be measured?
Finally, how does this funding address the move away from coal, and more specifically, how will it address the impact on coal miners? What’s the transition plan for them?
The lack of clarity on the above issues needs to be addressed as a matter of urgency. President Ramaphosa has a golden opportunity to reign in his recalcitrant Minister of Mineral Resources and Energy, and build a cleaner, more efficient and hopefully cheaper energy supply sector. Is he up to the task?
Issued by Kevin Mileham & Dave Bryant, DA, 5 November 2021
