SA's growth rate would expand if it moves away from coal ? World Bank

Air pollution contributes to more than a million African deaths a year

There will also be gains for the country’s climate objectives – with emissions reducing from 470 CO2-eq metric tons in 2022 to 171 CO2-eq metric tons in 2040 and then to 80 CO2-eq metric tons in 2050. Reduced coal use would also limit air and water pollution – which would ultimately benefit the health of individuals, and this is positive for productivity and economic growth.

Sources of finance

To finance the hefty bill of R8.5 trillion for the transitions, the World Bank highlights the reliance on domestic private investments – through subsidies or tax rebates to encourage capital flows toward climate-related projects, among other interventions to de-risk green investments. Government can also encourage households and businesses to invest by making them aware of climate risks. Instruments like the Green Finance Taxonomy, which classifies “green” assets, projects and sectors, could also be useful for potential investors to identify these.

The World Bank estimates the three transitions wilThe World Bank estimates the three transitions will require R8.5 trillion between now and 2050.Supplied World Bank

The World Bank noted that pension funds, collective investment funds and insurance companies could also provide finance climate action. “These investors own about R10 trillion (or 1.6 times the value of GDP in 2021) in financial assets that could be allocated toward green or climate-focused assets and investments,” the report read.

The development finance institutions such as the Development Bank of Southern Africa and the Industrial Development Corporation – known for supporting infrastructure finance with debt and equity finance – could also support climate-resilient projects.

The World Bank also flags the use of green bonds to raise funding. Blended finance – a mix of public and private finance – is another option for funds.

Public finance such as the carbon tax could raise additional revenue that can bolster public investments in the transition.

Multilateral and bilateral development partnerships are considered critical sources of funding, and would be in the form of grants and concessional finance.

So far, South Africa has only received about R38 billion per year in climate finance, and mostly in the form of loans. Only about 11% was in the form of grants, the report read.

Cabinet recently approved an investment plan for $8.5 billion from international partners France, Germany, the UK, the US and the EU to support a just transition specifically in the electricity, electric vehicles and green hydrogen industries. The plan is to be announced at COP27.

The country also recently secured about R9 billion as part of the Climate Investment Funds (affiliated with the World Bank) accelerated coal transition investment programme.

The World Bank recommends making use of additional resources from the Green Climate Fund and the Global Environment Facility.

Source: News24

Disclaimer: This report is automatically generated from worldwide news services. NTN is not responsible for its content and does not moderate it.

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