By Blessing Manale
Finance Minister Enoch Godongwana has through the 2024 Budget Policy Statement, turned the heat on the money and signalled the possibility of a truly climate action-orientated Budget and national fiscal framework to support the Just Energy Transition.
Such a framework should be based on a system that offers a way for the government to turn climate commitments into funded and measurable actions across all the tiers.
It embeds climate targets, measures and considerations, into decision-making as part of the budgeting process.
I say “signalled”, because, we are not there yet, however, the building blocks have been moulded for transformative national economic and social policies that clearly consider how benefits and burdens in the transition will be distributed, while increasing state capacity to promote net-zero local economic development strategies.
We can say following from the recent State of Nation Address and the Budget speech, that we as a country are beginning to approach our response to disaster through the lens of what it is: a climate calamity.
Climate finance and disaster response
To manage the increasing frequency of extreme weather events, as has been seen in South Africa and the world, various funding instruments from grants to contingency funds are being considered depending on the incidence and intensity of the disaster event, however, the taste is in the pudding, so we wait for details.
Disaster Response grants are being made more efficient with the right incentives e.g. for preparedness and risk reduction, and R1.4 billion is being provided for the municipal disaster recovery grant to fund the repair and reconstruction of damaged infrastructure.
The speech has reaffirmed that the Climate Response Fund will be established but no allocation has been made. I assume that is sensible as we work the modalities. But let time not pass us, and therefore let this be the Tintswalo legacy and a tangible early goal for the 7th administration, through a revised budget after the 2024 elections.
Energy Security
The Budget clearly acknowledges that Eskom, with its many challenges, will remain the key player in the electricity sector, however, the mechanisms to relieve it of its dust burden remains on track. The energy transition still gets the nod with an emphasis that measures to end load shedding requires private sector participation.
The National Treasury will release an independent review of the coal-power fired stations, which will further inform the conditions and the environment, and conditions of the debt relief.
In the same way, the Budget speech has equally thrown another life-line at the coal-face of service delivery: The R2 billion allocated in the form of a new conditional grant to fund the roll out of smart prepaid meters for municipalities is groundbreaking.
It is linked to the current Eskom municipal debts, but, if well optimised, it will improve revenue collection, save on the costs of meter reading, accounts disputes as well as illegal connections amongst others.
Industrial development in the other sector
As the Presidential Climate Commission engaged with the automotive industry, the burning issue has been the government’s slow pace in responding to the challenges and opportunity of the New Energy Vehicles (NEVs) market, primarily because we are an auto exporting country with high usage of private vehicles by South Africans.
We welcome the announcement on the incentives for production of NEVs, following hot on the trail of the EV White paper, as well as the South African renewable Energy Master Plan released last year.
However, NEVs are not the only solution. To improve our transport sector performance we urgently need, and as fast as possible, an improvement in the deteriorating state of the country’s public transport for both cargo and passenger goods.
Transnet Freight Rail’s operations need to improve to move the huge amounts of material required for new industries; we need the major cities and metros to have bus rapid transition systems that limit increasing private vehicular emissions.
It is particularly important that the government’s strategic priorities and objectives relating to climate are clearly set out to inform fiscal planning.
The 2024 Budget is all welcome, however, we need to change gear and ramp up our torque if we are to seize the opportunities and evade the climate calamity already in our backyard: hitting our lives, livelihoods and an already fragile economy.
Blessing Manale is the head of Communications of the Presidential Climate Commission.
BUSINESS REPORT