A man walks past a Sasol synthetic fuel plant. Picture: REUTERS
The World Economic Forum’s Global Risk Report is dominated by environmental risks linked to climate change. It ranks “extreme weather” as number one. Second is “climate action failure”. Only one of the top five risks is not classified an environmental risk — the risk of “infectious diseases”. This is profound: even during the global Covid-19 pandemic, climate change poses the greater material risk.
The country’s transitional risk is therefore largely linked to electricity and the coal value chain. It lost an estimated $60bn of coal export revenue between 2013 and 2017 and is susceptible to a further $120bn of transitional risk, mostly emanating from the loss of coal export revenue as countriestransition their energy sector. This threatens thousands of jobs.
The National Treasury has also released its Financing a Sustainable Economy technical paper. The financial sector’s Climate Risk Forum has responded by focusing on the implementation of treasury’s recommendations. Its current focus is to give effect to the proposals, which envisage an increase in capital allocation to sustainable development and the transition to a “climate-resilient economy”.
Therefore, building on its various existing policies, it should create an overarching transition strategy that creates a unified vision for SA’s decarbonisation. SA needs a detailed road map, more encompassing than the low emissions strategy. It should provide a full overview of the sectors and activities that contribute to climate change and the sectors and activities that are to be affected by it.
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