Assessing the effectiveness of climate finance in promoting a just transition : a case study of Siyathemba Local Municipality in the Northern Cape, South Africa

Abstract

Climate finance and the question of “a just transition” have been the subject of heated debate in South Africa in recent years. This Master’s dissertation Assessing the effectiveness of climate finance in promoting a just transition: A case study of Siyathemba Local Municipality in the Northern Cape, South Africa addresses this urgent area of study. The issue of transitioning from coal to renewable energy has received public criticism from labour unions including the National Union of Metalworkers of South Africa (NUMSA) and some political figures who argue that the transition will drive job losses in the coal sector value chain. However, on the other hand, some commentators have argued that the just transition in South Africa can be the driver of new financial investments in clean technologies, while also creating much-needed jobs in the country. Despite these debates, transitioning away from coal to renewables is well underway, and mechanisms are in place to mobilise climate finance to support South Africa’s just transition efforts. For instance, in 2011, the South African government introduced the Renewable Energy Independent Power Producer Procurement Programme (REIPPPP) in an effort to fulfill South Africa’s international commitment to address climate change, including the Paris Climate Agreement. The REIPPPP is aimed at accelerating South Africa’s decarbonisation process through paving the way for the uptake of renewable energy, while also addressing the socio-economic challenges facing local communities across South Africa. As part of the REIPPPP, South Africa has managed to secure more than R200 billion in climate finance investments. The preferred bidders in the REIPPPP, referred to as Independent Power Producers (IPPs), are obligated to contribute to the socio-economic development of local communities located within a 50km radius of where they operate. The projects being implemented by a majority of the IPPs are located in remote and marginalised rural communities that are faced by critical socio-economic challenges. This study explores whether the IPPs operating in Siyathemba Local Municipality (SLM) in the Northern Cape province of South Africa have contributed to the socio-economic development of small towns in the area including Prieska, Marydale, Niekerkshoop and the mining settlement at Copperton. These are towns plagued by poverty, unemployment, inequality, and a dependency on social grants. The study investigates the extent to which climate finance investments in renewable energy development in SLM support the promotion of a just transition by contributing to the betterment of members of the local population. It is informed by just transition policy debates and media reports about the REIPPPP, including peer-reviewed and grey literature reports on the just transition and climate finance in South Africa and the rest of the world. Observation and interviews, review of company reports and literature review were used as data collection methods for conducting this research. The study reveals that significant climate finance investments are flowing into SLM, and that these investments are changing the spatial landscape of the municipality through what is argued as a process of re-industrialisation. However, a core finding of this research is that the rollout of renewable energy projects in SLM has not promoted a just transition in the towns of Prieska, Marydale, Niekerkshoop and Copperton, because these projects create only temporary, poorly paid jobs for the local population who lack the skills required for the construction and operation of such projects. Furthermore, the climate finance investments have not addressed the issue of energy poverty in SLM. Thus the issue of injustice in South Africa’s just transition in SLM is asserted in this study. Throughout this research, I investigate the barriers and opportunities associated with achieving a just transition in SLM by climate finance investments in renewable energy development.