climate pathways and a just transition for south africa · 7/29/2020 · final prep publish final...

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Climate Pathways and a Just Transition for South Africa

Presentation to BUSA Just Transition Working Group , 29 July 2020

Business Action for Sustainable Growth

@NBISA

#NBIJustTransition

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Context … … and guiding principles

South Africa will be severely impacted by climate change in the coming decades

Unlike many countries, South Africa's economic case for implementing carbon neutrality, or even a 2°C mitigation path, is negative

In addition, South Africa must achieve a Just Transition to avoid exacerbating inequality, maintain social cohesion, and eradicate poverty; and plan for the physical impacts of climate change

A multitude of reports have been published by domestic and international institutions about what South Africa should do, however little practical progress has been made. Many reports show a limited understanding of the full context, including local realities that may challenge transition

The time is opportune for South African businesses to propose a coordinated, constructive, and inclusive way forward that protects economic competitiveness

To have the desired impact, South African business must propose a position that is:

• Unbiased – fact-based and objective, not a lobbying exercise by business

• Ambitious – proposing step-change solutions and difficult trade-offs, not repackaging current efforts

• Unified – widely supported across all critical industries and non-business sectors

• Just – centered on socio-economic implications, not only individual bottom lines - underscored by dialogue

• Balanced – efforts are in proportion to the physical and transition climate risk to which South Africa is exposed across development scenarios

• Visible – anchored on a major international and local event, COP26, to cement commitment and transparency and to demonstrate alignment with national poverty alleviation and economic goals

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A coordinated national effort

is requiredon critical questions

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2

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What is the roadmap to a Just Transition, particularly in the

geographies and sectors that will be most affected?

Based on physical and climate risk, what is an appropriate level of

ambition to reduce GHG emissions by 2050?

What concrete measures can be implemented in each sector

and how can we create an enabling policy environment to

reach the ambition?

What are the associated social and economic costs

and what are the support requirements of the

international community?

What are the consequences of local and global inaction and

how would the country adapt to physical risk?

In the context of a post-COVID

economy

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We need to ensure company leadership is on board with

the planning process and outcomes and will engage with

CEOs throughout

The recommendations developed must not be a surprise and

must be developed with input from government and labour

partners, requiring constant engagement and updating

Through expert working groups, company and industry

partners and experts will be included in developing solutions

and recommendations

Business views will be incorporated into government

stakeholder processes in the build-up to COP26

South Africa’s economic vulnerability and tenuous political environment means that stakeholder engagementis critical

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3

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This study has the potential to move SA away from …

And create enormous value by …

Stalled progress due to resistance from pockets concerned about being left behind

Inconsistent policies & regulations which incentivise counterproductive behaviour

Self-optimized company scenario planning due to national level uncertainty

Limited and haphazard cooperation between companies

Unlocking & channelling local & international support to high need & impact areas

Laying a foundation for consistent and effective policy development

Defining an optimized pathway at national level to decrease uncertainty for business

Mobilising coordinated cross-industry collaboration

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We propose a collaborative study to accelerate Green Stimulus & create a 'unified voice of SA business' at COP 26

July Aug Sep Oct Nov

Phase 1a: High-level pathways blueprint

Dec Jan

Stakeholder Engagement…with critical South African industries/business leaders, government ministries, civil society, labour, and COP26 representatives

Establish fact base and reference points (emissions baseline and outlook to 2050)

Define feasible climate pathways for South Africa (incl. sector couplings)

Assess feasibility and impact (incl. socio-economic and just transition implications)

Detail mitigation and measures & opportunities per sector

Feb Mar April May June June Aug

Phase 1b: Detailed design of pathways

Ramp Up to

Launch Event

Priority Sectors

Electricity

Chemicals

MiningDevelop Green Stimulus vision and strategy, prioritise 'no-regret' green projects and prepare international funding requests

Enhance emissions baseline with data for remaining sectors and fine tune previously covered sectors

Expand impact assessment for remaining sectors + fine tune previous

Complete mitigation pathways for South Africa (incl. adaptation and resilience impact)

Finalise Just Transition narrative and preparations for COP26

All Sectors

Transport

Metals

Refining

Mat. Manf.

AFOLU

Final Prep

Publish final report and roadshows

Incorporate findings in COP26 negotiation strategy

Accelerating Green FinanceAnalysis will be completed at a sector level and follows a 80/20 approach to asset-based detailing covering key assets only (excludes

adaptation and resilience detailing)

4-5 months 4-6 months

Electricity

Chemicals

Mining

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Deliverables will be developed incorporating inputs from all sectors of the economy

z

Electricity

Chemicals

Mining

Metals

Refineries

Materials man.

Transport

Financial services

AFOLU1

High-level pathways blueprint(sector modelling with 80/20 view on asset

based detailing)

• National emissions baseline and outlook to 2050

• Sector abatement curves and impact assessment

• Climate pathwaysDetailed design of

pathways(comprehensive sector coverage and

asset based detailing)

• Enhanced emissions baseline and outlook

• Fine tuned and comprehensive national abatement curve

• National mitigation pathways and concrete plan of action (including adaptation and resilience strategy)

Accelerating Green Finance

• Green Stimulus Vision and Strategy (including recommendations on how to implement)

• Plan of action to fund shovel-ready projects

1. Agriculture, Forestry and Other Land Use

Sector Inputs Deliverables

Fun

din

g se

cure

dFu

nd

ing

still

req

uir

ed

2020

2021

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To ensure representative, balanced and fact-based content; a comprehensive governance structure is proposed

Government as ultimate stakeholder and recipient of final output

Advisory board gives directional and methodological input. No decision power

Committees and sub-committees• Develop content under steering of core project team• Can comment on integrated/consolidated content • Committees will practically work in sub-committees dedicated to specific

subjects / sectors

Core project team • Leads content development within committees• Leads content integration and consolidation • Drives stakeholder engagement (incl. CEO process + touchpoints with govt.)

Steering Committee gives directional input on evolving content and process on regular basis. Can take decisions on items brought forward by core project team (within scope of study). In event of no agreement in Steerco, core project team will act as tie breaker

CEO champions publicly support study, provide directional input. Can take decisions through representatives on Steerco

GovernmentPresidency, DEFF

NBI, BCGCore project team

Advisory boards

Selected CEO representatives

CEO champions

Committees

Sub-committees:I) Commercial transport II) Public transport

Sub-committees:[tbd]

Sub-committees: I) Extreme weather resilience,II) Water management, III) Adaptation finance

Industry, government and civil society representatives

Selected CEO representatives

Steering Committee

I) Gas supply security, II) Green H2, III) Sector coupling, IV) Waste mgmt., V) Electricity market

Workshop series Workshop series will be held to discuss selected key enablers and opportunities

Green Stimulus Energy-relatedemissions

Process-related emissions

Sub-committees:I) Green Stimulus vision II) Green Finance strategy

Sub-committees: I) Materials manufacturing (Cement),II) Metals (Steel) , III) Chemicals,IV) Liquid fuels V) Electricity gen.

Sub-committees: I) Materials manufacturing (Cement,II) Metals (Steel), III) Chemicals,IV) Liquid fuels

Transport emissions Agriculture &land-use emissions

Adaptation andresilience

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Deep-dive Committees

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• Presidency• DEFF• National Treasury• Industry reps from

committees II-V (for green project development)

Green stimulus

• Eskom• IPP Association• SAPVIA• SAWEA• EIUG businesses • Transnet• NERSA• DMRE• DEFF• DTI• DPME

Energy-related emissions

• Top emitters (excl. Eskom)

• Chemicals, steel and building material associations/companies (e.g. SAISI, ACMP, FAPA)

• DEFF


• Transnet• Logistics companies

(e.g. Imperial and Barloworld)

• Metros• DoT• DPME• DSI

Transport emissions

• Agricultural private/public associations (e.g. Forestry SA, SAPA , SAFA , ARC)

• Major retailers• DEFF

Agriculture and land-use emissions

• Agricultural private/public associations (e.g. Forestry SA, SAPA , SAFA , ARC)

• Major retailers• DEFF

Adaptation and resilience

• Sasol• Eskom• Academics (e.g. CSIR)• BUSA and NBI sector

representatives • DSI• DPME• DMRE

Special workshops

Proposed participants (II/II)

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Proposed committees – members still to be decided

• Government wide green stimulus vision and strategy

• Green and sustainable finance strategy

• 1st batch of "Quick Win" green projects

• Process to build pipeline of bankable green projects

• Barriers to green stimulus measures and green projects

• Climate smart / resilient agriculture

• Mitigation measures for agriculture

• Carbon sink conservation and extension

Electricity generation• Unlocking potential of

renewables; Storage, compensation, and flexibility options; Energy carrier substitution; Flexible generation

Industry energy efficiency• Tech. process

efficiency, Process alternatives; Flexible consumption

• Process alternatives• Technical process

efficiency• Organizational

efficiency• Process and product

innovation (new materials, regenerative feedstock)

• Substitution (material and sources of energy)

• Efficiency of drives• Change in fuel• New fuels• Freight transport

options• Modal split• New organization• Linking transport with

power system

• Extreme weather resilience (e.g; infrastructure, early warning systems)

• Water management• Finance, including

complementarities with green and sustainable finance and potential for public-private partnerships

Key topics

Green Stimulus vision & G&S1

finance strategy

Agriculture & land-use emissions



Transport-related emissions

Adaption & resilience

Committee

No

n e

xha

ust

ive

& f

or

dis

cuss

ion

1. Green stimulus vision

2. Green and sustainable finance strategy

3. 1st batch of "Quick Win" green projects

4. Process to build future project pipeline

5. Recommendations for removing barriers to green projects

1. Baselining input

2. Levers & opportunities for agriculture and land-use emissions and adaptation

3. Identified technical and policy / regulatory key enablers

1. Baselining input (asset view)

2. Quantified levers & opportunities for supply side and demand side


1. Baselining input (asset view)

2. Quantified levers & opportunities for process emissions


1. Baselining input

2. Levers & opportunities for transport / mobility emissions mitigation


1. View on vulnerabilities and risk to sectors posed by climate change

2. Quantified levers & opportunities for adaption & resilience

3. Timeline of proposed investments

4. Complementarities with green and sustainable finance strategy

Key deliver-

ables

For example: • Natural gas supply

security• Green Hydrogen• Sector coupling• Waste management • Pre-requisite: Eskom

unbundling

1. View on new business opportunities

2. View on cross-cutting structural enablers incl. game changer technologies and policies

3. Proposed roadmap for considered measures

Special workshops Key enablers & opportunities

1. Green and Sustainable

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Committee I: Green stimulus vision & green and sustainable finance strategy

Proposing a green stimulus strategy incl. vision, green and sustainable finance strategy, view on first batch of "Quick Win" projects, process for further developing project pipeline, and barrier identification

Suggested members

Government reps e.g.; Presidency, DEFF, National Treasury

Industry reps from committees II-V (for green project development)

Suggested BCG experts

TBD

WIP

Green Stimulus

Governmental alignment

• Bodies such as Presidency and PCCCC which have mandate to align departments on one strategy

Finance

• Entity with expertise and mandate to draft finance strategy

Technical expertise

• Various players from different sectors with expertise on potential green measures (e.g.; transport, industry, agriculture etc.)

Policy makers

• Policy makers for relevant fields (e.g.; electricity, transport) which can remove policy barriers

❖ Stimulus strategy ❖ Green and sustainable finance

• Government wide green stimulus vision and strategy

• Green and sustainable finance strategy

• 1st batch of "Quick Win" green projects

• Process to build evolving pipeline of bankable green projects

• Barriers to green stimulus measures and green projects

Vision and strategy

• What should be SA's overarching Green Stimulus vision and strategy?

• How to externally communicate and build credibility?

Green and sustainable finance

• What should be the government wide green and sustainable finance strategy?

• What are current barriers to green and sustainable financing?

Bankable green projects

• What "Quick Wins" (shovel-ready green projects with funding potential) exist?

• What should be the private-public process going forward for further developing green projects?

• What are barriers to green projects?

Competences requiredSub-committees & key topics

Key questions (examples)

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Committee II: Energy-related emissions

Power supply

• National utility, IPPs

Grids

• Power grids, gas grids, district heating

Fuels

• Refinery

Emitters

• Chemicals, Steel, Building materials, Mining, Metals (excl. steel), Food products, Paper, Glass & ceramics, Textiles, Mining

Factories and processes

• Factories, mechanical engineering, process control, specialty chemicals

❖ Power generation❖ Metals❖ Material manufacturing❖ Chemicals ❖ Mining❖ Liquid fuels

Electricity generation

• Unlocking potential of renewables

• Storage, compensation, and flexibility options

• Energy carrier substitution

• Game changers (e.g. H2)

Industry process energy efficiency

• Technical process efficiency, organisational efficiency

• Process alternatives

• Flexible consumption (DSM, storage, PtG, etc.)

Electricity generation

• How can renewables deployment be accelerated, including via self-generation?

• What is the potential for increasing the efficiency of existing fossil-fuel plants?

• How great is the potential of CCU/CCUS in terms of CO2 emissions?

• To what extent can grid expansion keep up with the expansion of renewables?

• How great is the potential for power-to-gas/liquid?

• What storage technologies could stabilize the power supply?

• How can the new energy mix maintain jobs e.g. through location of new production

Industry process efficiency

• How can processes become more energy efficient? How can power/heat/steam required be emission-free?

Emission related to the use or generation and supply of energy (electricity, thermal energy) e.g. emission from power generation, energy demand for industry processes and resulting emissions, etc.

Suggested members

EskomIPP AssociationSAPVIASAWEAEIUG businesses TransnetNERSA

Governmnet reps: NERSA, DEFF, DTI, DPME, DMRE


TBD

WIP




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Committee III: Process-related emissions

Operators (emitters)

• Chemicals

• Steel

• Building materials

• Mining

Factories and processes

• Plant engineering

• Process control

Customers (for materials)

• Car manufacturers, construction

❖ Chemicals❖ Building materials ❖ Metals❖ Mining❖ Liquid fuels

• Process alternatives

• Technical process efficiency

• Organizational efficiency

• Process and product innovation (new materials, regenerative feedstock)

• Substitution (material and sources of energy)

Chemicals

• To what extent can nitrous oxide emissions be avoided in the chemical industry?

• To what extent can natural gas be replaced as input in e.g.; methanol and NH3 production? Are F-gases replaceable by less potent GHGs?

• How can CO2 emissions be used as a raw material (even in other sectors)?

Steel

• To what extent can the CO2 intensity of the blast furnace route be reduced? What possible alternatives to blast furnaces are there?

Building materials

• Can less carbon-intensive fuels be used in cement production? What is the availability of more energy-efficient devices (e.g.; kilns)?

• Can product innovation or alternatives in building materials help curb emissions?

Overarching: How great is the potential of CCS/CCU in terms of CO2 emissions?



Emissions released in industry processes from chemical or physical transformation of materials

Suggested members

Top emitters (excl. Eskom)1

Chemicals, steel and building material associations/companies (e.g. SAISI2 , ACMP3, FAPA4 )

Government reps: DEFF


TBD

WIP


1. Sasol; ArcelorMittal, South32, Anglo America, PPC, Sappi, African Rainbow Minerals, Exxaro, Gold Fields 2. South African Iron & Steel Institute 3. Association of Cementitious Material Producers 4. Ferro Alloys Producers

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Committee IV: Transport-related emissions

Competences required

Transportation modes

• Automotive manufacturers, suppliers (incl. trucks)

• Rail transport (operators and/or manufacturers)

• Aviation (operators and/or manufacturers)

• Maritime transport (operators and/or manufacturers)

• Public transport

Transport & logistics

• Logistics providers

Suppliers

• Mineral oil/refinery

• Battery production

❖ Public transport❖ Commercial transport

• Efficiency of drives

• Change in fuel

• New fuels

• Freight transport options

• Modal split

• New organization

• Linking transport with power system


• Can a modal shift lead to GHG savings (e.g.; road to rail)? What bottlenecks to be avoided from past experience (e.g.; Bus Rapid Transit)?

• What is the impact of improved urban transport planning (e.g., to avoid combustions)? How can synergies be created with other city planning (e.g.; housing)?

• How great is the efficiency potential for improved public transport, conventional automotive drives and existing conventional drives in aviation and maritime transport?

• To what extent can electric drives replace or supplement existing fossil fuel-based drives in road and rail transport? What opportunities/bottlenecks are there under the Biofuels Regulatory Framework of 2019?

• To what extent can synthetic or biogenic fuels replace fossil fuels in aviation and maritime transport?

Emissions from freight, commercial and personal transport

Suggested members

TransnetLogistics companies (e.g. Imperial and Barloworld)Metros1

Government reps: DoT, DPME, DSI


TBD

WIP

Transport emissions

Sub-committees & key topics

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Committee V: Agriculture and land-use emissions

Competences required

Regional impact of climate change

Agriculture expertise / Climate smart agriculture

Land and forestry management and conservation

❖ Agricultural production ❖ Land management

• Water management

• Climate smart / resilient agriculture

• Mitigation measures for agriculture

• Carbon sink conservation and extension

• Policy alignment

Key questions (examples)Food security

• What approaches need to be taken on the food production and water management side to combat/mitigate desertification?

• What is "climate smart agriculture" in the SA context? What are unavoidable regional climate impacts, how can SA ensure food security?

Emission reduction

• How can emissions from agricultural activities be mitigated and further avoided?

• What is the potential of existing forests to function as carbon sinks? How can they be conserved and further grown?

Policy alignment

• What policy infrastructure needs to be put in place to coordinate the response from the agricultural sector? What are barriers to implementation of current policy?

• How can alignment between national and local institutions be facilitated?

Emissions from agricultural activities and land management. Potential and need for adaptation

Suggested members

Agricultural private/public associations (e.g. Forestry SA, SAPA1 , SAFA2 , ARC3 )Major retailers

Government reps: DEFF, Provincial governments


TBD

WIP

1. SA Poultry Association 2. SA Feedlot Association 3. Agricultural Resource Council

Agriculture and land-use emissions

Sub-committees & key topics

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Committee VI: Adaption and resilience

Measures and timeline of investments to adapt and build resilience to climate change

Suggested members

Government reps e.g.; DEFF, National Treasury

Industry reps from committees II-V (for green project development)Academics


TBD

WIP

Technical expertise

• Various players from different sectors with expertise on potential risks and measures for resilience

• Experts in weather resilience with understanding of current technology

Finance

• Identify complementarities with green and sustainable finance strategy

Regional impact of climate change

• Identify vulnerabilities to climate change

❖ Food security ❖ Water security ❖ Disaster Risk Management❖ Finance

• Identification of risks to sectors and vulnerabilities (e.g.; infrastructure)

• Levers and opportunities that allow adaption & resilience to climate change

• Timeline of investments to facilitate levers

• Complementarities with green and sustainable finance strategy

Food security (Agriculture)

• How can agriculture build resilience, and with what investment time-line? e.g.; drought-resistant crops, water storage

Water security

• What efficient water practices can industry/agriculture put in place?

• How can planning, forecasting and monitoring be improved?

Disaster risk reduction

• How can it be ensured that early warning systems are up to date and efficiently utilised (e.g.; communicated effectively)

• What research/partnerships have potential for risk reduction?

Finance

• What complementarities exist with the green and sustainable finance strategy?

• What opportunities are there for public-private partnerships?

Competences requiredKey questions (examples)Sub-committees & key topics

Adaptation and resilience

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Special workshops on selected key enablers and opportunities

Key topics Key questions (examples) Competences required

Development of points of view for selected topics incl. key enablers to the identified levers

Green Hydrogen

• What is SA's potential to develop a green H2 industry?

• What would be the climate impact? What are the considered timeframes?

Natural gas supply security • What is the role of natural gas in the future economy?

• How can supply be secured?

Sector coupling• What are the needs around and potential benefits

from increased sector coupling (e.g.; electrification of specific energy demand)

Waste management

• What is the mitigation potential from improved industrial and public waste management?

• What are potential circular economy approaches=

Electricity market reform • What is needed to remove existing roadblocks (e.g.;

Eskom unbundling etc.)?

Suggested members

SasolEskomAcademics (e.g. CSIR)BUSA and NBI sector representatives

Government reps: DSI, DPME, DMRE


TBD

WIP

Relevant industry representatives and

topic experts

Social Plan for SA's Just Transition

• What are the main pillars of a social plan that need to be put in place to address social issues arising from climate action?

climate pathways and a just transition for south africa · 7/29/2020 · final prep publish final...

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