Our take: Stunning finance deal kickstarts SA’s green future

South Africa stole the show on Tuesday at the global climate talks (aka COP26) on the go in Glasgow.

In a historic deal, our government announced that France, Germany, the UK, US and EU have pledged R131 billion over the next three to five years to help us transition to a green economy in a socially responsible way.

The money will take the form of grants, loans and investments. But why us, and why now?

Wealthy countries like the US and Australia grew largely by burning fossil fuels to power their economies over the past 100 years. This left the planet with its current carbon crisis. Developing countries like ours can’t afford to limit our economic growth by abruptly shifting to green energy; this would devastate communities that rely on coal mining. 

The imbalance continues today: the 20 richest countries contribute up to 80% of global emissions, but developing countries are most vulnerable to the effects of climate change (drought, flooding) even though they emit the least greenhouse gasses. 

That’s why, back at 2009’s COP, rich countries committed to contributing $100bn a year to poorer countries, like low-lying island nations that will disappear if we don’t stop the seas from rising. But a recent report shows they fell short of this goal; this year’s meeting is all about getting them to commit for real

It’s no wonder this deal is a big… well, deal. 😝 Wealthy nations are making good on their promises, starting with SA. 

As to “why us”, emission statistics show that South Africa is the world’s 12th biggest emitter of greenhouse gases. (Thanks Eskom). At the same time, investors in rich countries are looking to bankroll green projects that deliver the necessary carbon offsets. And so the match is made. We’re starting from such a low base that our climate transition promises to be a success story. 

Plus, we have great potential for solar, wind and the oil of the future, “green hydrogen”. These natural assets, twinned with our industrialised economy and skills, make us super attractive to investors. 

Now for us to watch that all this money gets spent responsibly! 

This article appeared as part of The Wrap, 4 November 2021. Sign up to receive our weekly updates.