Emissions targets to change energy plan

• Commission to push for higher reduction goals • Faster phasing out of coal power stations

The presidential climate commission is to recommend that SA adopt more ambitious emissions reduction targets than the government has proposed, which would entail changes to the country’s energy plan and a quicker phase-out of coal-fired power.

The commission was established in September last year to co-ordinate the country’s transition to a low-carbon economy and build consensus among social partners for a “just transition”. It is chaired by President Cyril Ramaphosa with former cabinet minister Valli Moosa as his deputy.

The commission’s immediate task is to advise Ramaphosa on SA’s nationally determined contribution (NDC), the selfimposed emissions reduction target set by countries under the Paris Agreement on climate change. Countries must revise their previous targets in the lead-up to the UN Climate Change Conference, also known as COP26, due to be held in the UK in November. The draft NDC was issued by the department of forestry, fisheries & environment for comment on April 30.

The commission met last week and plans to submit a report to Ramaphosa by midJune. SA is the world’s 12th largest emitter, with the bulk of its electricity coming from coal, and faces an increasing risk of being left behind as the rest of the world rapidly moves to adopt cleaner energy sources.

Executive director of the commission Crispian Olver said in an interview on Wednesday: “In its meeting on Friday the commissioners agreed there is scope to lower both the lower and the upper bound limits of the NDC. Most of these emission reductions can be achieved with the existing policy framework, but further emission reductions will require some additional policy measures. ”

The draft NDC proposed achieving a target range of 398450 megatons of carbon dioxide equivalent by 2030. Olver said the commission was presented modelling work that indicated limited macroeconomic implications to adjusting the range to 350-420 megatons, while there were substantial benefits in terms of jobs, investment and energy security. This is a modest reduction of 6.6% on the upper limit.

The Integrated Resource Plan

(IRP), which is the government’s long-term energy plan, would however need to shift to meet these targets.

The IRP assumes the addition of 1,500MW of new coal-fired power and the gradual retirement of Eskom’s old coal power stations, with 10,500MW expected to be decommissioned by 2030.

The new target would require the “endogenous decommissioning” of coal, which would mean that once a plant’s level of efficiency fell below 40%, making it more expensive for Eskom to operate, it would be decommissioned.

This assumption also takes into account that the new coal build is unlikely to materialise as financial institutions move rapidly away from financing fossil fuels due to shareholder pressure.

While this would leave a gap in the IRP, this could be quickly filled if the licensing regime for embedded generation, in which companies produce electricity themselves, is lifted, said Olver.

The IRP is also modelled on higher economic growth assumptions than have been realised so far. Most significantly, said the commission, a quicker retirement of coal-fired power stations would open the door to concessional climate finance, which could play a key role in assisting Eskom restructure its debt.

But while SA is poised to improve on its commitments, environmental groups remain critical of whether the country is doing its “fair share” of emissions reduction to meet the global objective of limiting global warming to 1.5°C.

Modelling commissioned from global body Climate Equity Reference Project by the Centre for Environmental Rights (CER) found that SA’s fair share was in the range of 286-360 megatons of carbon dioxide equivalent. “Anything that remains in the 400 range is nowhere near our fair share,” said CER attorney Nicole Loser.

Head of the National Business Initiative’s environmental team Steve Nicholls, who also presented to the commission, said in an interview that the government had to balance greater climate change ambitions with credibility. As much of SA’s decarbonisation is structural – for instance, it involves major change to the energy generation profile that will take time – a target that was too ambitious would not be credible.

Regardless of whether SA’s emissions target constitutes fair share, the country remains exposed to the risk of not moving fast enough to decarbonise, say both Nicholls and Olver, and getting left behind technologically and punished by trading partners for not being green enough. This risk will substantially increase after 2030.

“The commission highlighted that there are risks to not moving fast enough. The global balance has shifted dramatically. There are trade restrictions coming down the line in terms of the carbon border tax adjustment. A carbon price is in the process of being injected into the global trading system. If we don’t move fast enough, we will miss an important opportunity to proactively transform our economy,” said Olver.