South Africa's Journey Toward a Green Economy: Balancing Resources and Sustainability

South Africa, recognized as the biggest African economy, has built its economic strength on resource extraction and industrial growth. Mining has long been the backbone of its economy, accounting for a major share of exports and employment, with nearly 60% of total exports in the first half of 2023 coming from this sector. The country's wealth in minerals such as gold, diamonds, and platinum has supported its development for decades. However, this resource-intensive growth has come at an environmental cost, with heavy reliance on coal-based energy dominating its electricity generation and powering around 80% of the national grid.

This dependence on coal has positioned South Africa as the 12th largest emitter of carbon dioxide and the leading emitter on the African continent. While coal has powered industries and households, it has also entrenched a reliance that presents challenges as the world transitions toward cleaner energy sources. Additionally, South Africa's economy, valued at nearly $400 billion, operates within a climate that is highly vulnerable. Much of its land is classified as semi-arid or arid, leading to severe water stress and heightened sensitivity to climate variability and extreme weather events. This vulnerability is reflected in its ranking among the most at-risk nations in terms of climate change impacts.

Balancing the pursuit of economic growth with the need to address environmental challenges has become a critical priority. Hence, a shift toward a green economy—one that embraces sustainable energy, climate resilience, and economic inclusivity—is increasingly viewed as the pathway forward for South Africa. This article explores South Africa's efforts to navigate this transformation, highlighting progress made and the obstacles that lie ahead in building a sustainable future.

South Africa's climate policy framework reflects its commitment to addressing the challenges posed by climate change while ensuring sustainable economic growth and development. Over the years, the country has implemented a series of policies and measures designed to mitigate emissions, adapt to climate impacts, and align with international climate agreements.

The adoption of the National Climate Change Response Policy (NCCRP) in October 2011 marked a significant milestone in South Africa's climate action journey. This policy, which was published as a White Paper, provided a structured approach to addressing climate change while promoting sustainable development. The NCCRP's objectives include managing the impacts of climate change and using climate responses to support economic growth and job creation. It emphasizes resilience-building within communities and ecosystems and outlines strategies for mitigating climate change effects and adapting to its impacts. Sector-specific plans focus on energy, transport, agriculture, and industry. Governance structures were established to coordinate implementation across national, provincial, and local levels, fostering collaboration among diverse stakeholders. The policy also prioritized public participation through national conferences and provincial workshops.

South Africa's submission of its first Nationally Determined Contribution (NDC) under the Paris Agreement in 2015 demonstrated a commitment to global climate goals while addressing domestic priorities. The NDC commits South Africa to peaking greenhouse gas emissions between 2020 and 2025, followed by a decline. Specific targets aim to limit emissions to between 398 and 510 million tons of CO2 equivalent by 2025. South Africa also included adaptation objectives focused on enhancing resilience in critical sectors such as agriculture and water resources in a bid to reduce its vulnerability to climate impacts. These measures aim to protect livelihoods and ecosystems while reducing socio-economic vulnerabilities.

The introduction of South Africa's first carbon tax in June 2019 signalled a bold step toward reducing greenhouse gas emissions through economic incentives. This landmark initiative places a financial cost on emissions, encouraging businesses to adopt cleaner practices and invest in renewable energy. The tax applies to entities with significant emissions, including municipalities and industries, and covers combustion emissions, process emissions, and fugitive emissions. Facilities with a thermal input capacity exceeding 10 MW are subject to the tax, although smaller emitters are also liable based on actual emissions. The carbon tax has significant implications for fossil fuel-dependent industries, particularly coal, and is anticipated to drive innovation, promote cleaner technologies, and contribute to national climate goals.

The enactment of the Climate Change Act in 2024 further solidified South Africa's commitment to climate governance. This Act provides a legal framework for coordinating and implementing climate actions across all sectors and levels of government. It introduces legally binding carbon budgets for industries, ensuring accountability and alignment with national emission reduction targets. The Act emphasizes integrating adaptation measures into national development plans and prioritizing climate resilience in vulnerable regions and sectors. It also establishes a system for monitoring, reporting, and verification to ensure transparency and effectiveness in implementing climate policies.

South Africa's evolving climate policy framework highlights its dedication to addressing the dual challenges of economic development and climate action. As the country progresses toward a more sustainable future, these policies provide the foundation for balancing growth with environmental responsibility.

South Africa is undergoing a significant shift from coal-dependent energy production to renewable sources to enhance energy security, reduce greenhouse gas emissions, and promote sustainable development. This transition relies heavily on initiatives such as the Renewable Energy Independent Power Producer Procurement Program (REIPPPP) and the Just Energy Transition Investment Plan (JET IP), which target technical challenges alongside socio-economic needs.

The Renewable Energy Independent Power Producer Procurement Program, introduced in 2011, has played a pivotal role in encouraging private sector investment in renewable energy. This program is designed to stimulate energy generation through a competitive bidding process while incorporating goals for socio-economic development. Since its inception, the program has attracted approximately USD 16 billion in private sector investments, resulting in the creation of 79 projects with a total capacity of about 5,243 MW sourced from solar PV, wind, and other renewable technologies. Successive bidding rounds have significantly reduced the cost of renewable energy, establishing South Africa as a global leader in competitive renewable energy pricing. The program operates under a transparent framework that ensures accountability and encourages participation from independent power producers, enabling a fair allocation of opportunities. Beyond energy generation, the REIPPPP integrates socio-economic objectives, creating numerous job opportunities, especially in rural areas, and fostering community development through renewable energy projects.

The Just Energy Transition Investment Plan is a five-year framework spanning 2023 to 2027. It aims to steer South Africa's economy towards low-carbon pathways while addressing social and economic inequalities. The plan aligns with the country's Long-Term Low-Emissions Development Strategy and its updated Nationally Determined Contribution under the UNFCCC, targeting a reduction in greenhouse gas emissions to between 350 and 420 megatons of CO2 equivalent by 2030. The JET IP estimates a funding requirement of approximately ZAR 1.5 trillion (USD 98.7 billion) over five years, focusing on key sectors including electricity, new energy vehicles, green hydrogen, municipal capacity, and skills development.

The implementation of the Just Energy Transition Investment Plan involves collaboration across multiple sectors, including government, civil society, trade unions, and private stakeholders, ensuring that the transition is both equitable and sustainable. The plan emphasizes transitioning from coal-based energy to renewable sources, upgrading electricity transmission and distribution infrastructure, and supporting communities and workers affected by the shift from coal to renewable energy industries.

Despite these efforts, South Africa faces significant challenges in its energy transition. The country's heavy reliance on coal, which accounts for over 80% of electricity generation, creates entrenched economic and social dependencies on the coal sector. This dependence complicates efforts to phase out coal without disrupting livelihoods, particularly in regions where coal mining is a primary source of employment. Additionally, financing the transition remains a critical issue. While international support is valuable, the scale of investment required far exceeds current funding commitments, leaving gaps that must be addressed through innovative financing mechanisms and greater private sector involvement. Resistance from vested interests, including coal industry stakeholders and certain political factions, also poses barriers to the timely implementation of renewable energy initiatives.

South Africa is making steady progress toward building a green economy, though its dependence on coal and the mining sector remains a significant challenge. Like Nigeria, breaking away from this reliance will require strategic planning and strong commitment but it will be quite tough. The country has already introduced practical measures and initiatives to tackle these hurdles which lays a solid foundation for its transition. However, prioritizing renewable energy and sustainable development over the usual ways of economic advancement will be key to advancing its goals. With effective implementation, South Africa's plans have the potential to drive the desired transition into a green economy.