The president noted that recent storms in the Western Cape shut down ports, negatively impacting the economy.
“The storms that hit parts of the Western Cape over the past week have caused devastation to homes, communities, businesses and infrastructure. These adverse weather conditions temporarily brought container ship traffic to a complete halt at the Port of Cape Town. Rough seas resulted in cargo vessels losing containers overboard and others being extensively damaged,” Ramaphosa said in his address.
“To manage the higher expenditure and lower revenues government may then need to increase borrowing, leading to higher debt levels and interest payments. This limits government’s ability to invest in other critical areas. The National Treasury is therefore central to our response to both the shocks of climate change and the potential opportunities to use the just transition as a springboard to build a more inclusive, resilient and sustainable economy,” he added.
“Our revised Nationally Determined Contribution balances our developmental needs and economic realities. It takes into account the feasibility of undertaking a climate response through a set of just transition pathways. Importantly, it notes carbon tax as a vital component of our mitigation strategy to lower greenhouse gas emissions. By internalising the cost of carbon emissions, the carbon tax incentivises companies to reduce their carbon footprint and invest in cleaner technologies.
While the problem isn’t unique to South Africa, the country needs to rethink the electricity generation, transmission and distribution network to account for new energy generation. This takes time and requires investment which is perhaps the biggest roadblock here.“International development finance institutions and governments of the Global North that made financial pledges under the Paris Agreement and COP26 are important sources of cheap and concessional capital.