Policy Paper 28

COVID-19 gave the world a glimpse of how devastating a pandemic can be to economies and livelihoods. Climate change, given its permanence, would be far more devastating, hence the renewed efforts at the global level to mitigate climate change. South Africa, one of the dirtiest producers in the world, faces the challenge of transitioning to a low-carbon and sustainable economy to meet its commitment to the Paris Agreement while satisfying domestic growth and development imperatives. South Africa has realised some progress in lowering the carbon content of its output, with the energy intensity of industrial production declining by 23 percent between 2002 and 2018. However, the country compares poorly relative to its BRICS peers, raising competitiveness concerns should carbon be penalised in trade. The electricity shortages bedevilling South Africa present an opportunity to change its energy mix, and thus carbon intensity of output, while the country’s strong industrial base should propel it to lead the production of green goods in Africa (and beyond). This, however, requires policy coherence across government, and partnerships with private sector.