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+SOUTH AFRICA’S LOW-
+EMISSION
+DEVELOPMENT
+STRATEGY 2050
+
+February 2020
+
+ 
+ TABLE OF CONTENTS
+
+ 
+
+   
+ 
+
+ 
+
+ACRONYMS ..ccecssssssssessssscessseessneccanecesnecesnecesneeesnneesnneees
+EXECUTIVE SUMMARY.. .. Vill
+1 INTRODUCTION...
+TA ‘The global:climate:Crisis scissinnscsennuinimmmcsncnon usin cionennesommunenimamn onan 1
+1:2 ‘he Paris Agreement tisrcssssccsmnnsresnnnnnermn cn 2
+1.3. The Science of 1.5°C and what it means for the Paris gOalS......... i eeeceeseeeeseesteeseesesteetessesneentenees 3
+1.4 Methodological elements for developing LEDS ...0.....c eee 4
+1.5 South Africa LEDS — a living COCUMENE.........c.eecescesceseestsseeseesesesteseeseenesueseseeesesiseesseeaeeneeeeneetentenseneeneeaes 6
+2 THE SOUTH AFRICAN ECONOMY, EMISSIONS PROFILE AND POLICY LANDSCAPE .. .8
+21 -South:Aftica's Econom sscscscsnscarcconn mae 8
+2.1.1 — EMe@rgy SUPPLY... eseesceseeseesessesseseeseeseesesnesussnsaessesuesesensaeeaseneeueeeseesasensausaesaeseseeeensassnsensenseneeneaseesensaees 8
+2.1.2 Mining and the industrial S@CtOF 0... escseeseeseeseeseeeeseseeseeseeseenesnsseeaeeseseeeteetensenseseesetstenseneateaeeneeees 10
+2.1.3 Agriculture, Forestry and Land Use (AFOLU)..00.. occ eeenesieaneeesnmenesieinanansenee 11
+214 Waste SOCIO «canneries neomncemimna ocean anmannamcemaramenaa 1
+21:5: Other sectors cna EER 11
+2.2 Greenhouse gas EMissions Profile 0... eee teseenesesteeeesnssnteeteeienneeniesiesenenssnsene 12
+2.3 Policy, legislation and strategies that inform SA-LEDS....0... cece eeeeeeeseseeteeieeeenneenesianeaneenee 14
+2.3.1 National Development Plan 2030 oo... eeeeeeesneeeesiesieneesesinesesnssmeetessennieaiesneeenananssne 15
+
+2.3.2 National Climate Change Response Policy .
+
+ 
+
+ 
+
+ 
+
+ 
+
+ 
+
+2.3.9 Climate Change Bill ssssssisisesesenncanoreie sername
+2.4 The role of sub-national government and the private SCCtOF wees testes 17
+2.4.1 Sub-national QOVErMMentt..........eccesceseesessessesseseeseeseeseeneseeeeeeesesuesnssessesseseeeteetsaseaseseneeneeeeeseneateeeeeeeees 17
+2.4.2 The contribution of the private SCCtOP...... ec eeceeeesesneetesteseeniesesineenesneeieateeenneeaieeiesenaneaneene 18
+2.5 Vulnerability and resilience ............cccceseeseesecesteseeseeseeseeseseeeeeeeeseeesssensseeaeeueensensaeeaseaseeeeeeeessenseneateaeeeeees 18
+3 VISION STATEMENT ....ssesssecsseesssesssecsneesnessnessneesnscsnscsnscsusesusesssesssessnecsusesnsssnsesusesusesusesnsceuesneessnesneeesneeseeeseeens 9
+A ‘GHG EMISSIGNS' MITIGATION MEASURES vevcosnmsscessnevarenensouemsemenrnenmserennnennrmenrnneT 21
+4.1 EMmergy SUPPLY... eeeeseeseeseeseseseseesesseesessesneeteaeeneenesecsessesucsusssseenesessasensaeeaesusensseeaeenssnesneaeenseeeeeeteatensenees 21
+4.1.1 Integrated Energy Plan... ccesceseeseeeceseseeseesecsesseseseesessesnssssnssesseeeesiseneseeaseeseseeeeneeeeeeseseneaneaeeeeaes 21
+4.1.2; ‘Integrated RESOUrCE PIAN esses ecweusccrerereeecmeerenercommreanseeeenucereneaeanner enna eenr iene 23
+41:3: Biofuelsopportunities vcesseorse sua sevemruneunner neem nra enema 26
+ 4.2 Energy: demand esseuswsverervemner rare nememmn nen nurmermres ancien momen ne eny esmureneer 27
+
+4.2.1 National Energy Efficiency Strategy... cece eeeeeesesesssesseseessessesseeseesuesnessiesnssesaseesesneeneeseeesease 27
+
+4.2.2 Support for uptake of Solar Water Heaters... ese eeeeeesseseestesteseeseesesntesesnesesaneesesneeneesieeneees 31
+
+4.2.3. National Building Regulations and Buildings Standards Act .......c..ceceeeccesesesteeeestestesteateateeeeeeees 31
+
+4.2.4 Promotion of Cleaner Mobility ...........cccccseeessessesteseesessesesesssessesseeeeneenseeeassissseeeeteeeseseseneeteneeeeaee 32
+AS  INGUSUIY crvceresersys seen aerecenyrmameeurnrearerine
+
+ 
+
+4.3.1 Industrial Policy Action Plan (IPAP).
+
+ 
+
+ 
+
+ 
+
+ 
+
+ 
+
+ 
+
+ 
+
+4.3.2 Tax incentives for green project development ........... eesti
+4.4 Agriculture, Forestry and Land Use (AFOLU)...0.....ceeceeseeseseeesseseeseesssmetssssatseneesenneeneenieeneeee 36
+45 WaStC oneness iesienesesmeesesmenieeiesnienesnssenenssissnieaiesiinnnissussunenesessameaneesesnennieneenieen 37
+4.6 ChOSSeCUIIG MOBSUTES sere cc ct cceseccrwenen ean reunnrecere conten eenuneresieearcerereatevtnatect ra ventet ent vesroreniecotateeneaedeecereivers 39
+4.6.1 Carbon TaX sisisansusonanmpsoncnmmannennnnan ania nase ieonanaeY 39
+4.6.2 Sectoral Emissions Targets (SETS) sisicsnnmnnnmninnmmmnmininmnnmnmnemmmmnn 40
+4.6.3 Carbon Budgets... ccc eeesseseeseestsneseesisiesaesssemeiesssnmeaesisneenesssetaissnssnesaneesesneeanesieeneane 41
+4.6.4 Phasing out of inefficient fossil fuel subSidieS/INCENtIVES occ es ceeeeseeseeseeseseseteetesneeneesteeneeee 41
+5 GOING FURTHER TO ACHIEVE THE PARIS GOALS ....escssescssecsssecesnesesneeesneeess 42
+5.1 Enhancing the vision for development ............cecsccccestesteseeseeeestestesteeeeeteeees
+5.2 Enhancing institutional capabilities and arrangements for the transition... eects 44
+5.3 Creating the right financial environment through aligning fiscal strategy with sustainable growth ......... 46
+5.4 Providing broad access to fUNdS occ eeeeeeseeeeesieeieteeiesienesnsineissneenieeteeiesienssneenananeane 47
+5.4.1 Climate finance flows to date oo. eensieeeeeenesisieenenmeiessemeaieeeniennesnsenaneensenee 48
+5.4.2 Formalising climate finance Structures... csceeceseeseseeeesseseeseesesneeteseeieatessenneeniestesnteaneansenees 50
+54.3. Climate finance opportunities: cicmnnomnenumnimanemanmmnannamummamnmaiN 51
+5.5 — Driving innovation, research, and skills for future valUe CAPtUre ow... escent 54
+5.6 Ensuring a just transition with jobs for all... cece ieseenmeseieeiesesnieateeesnmenieaiesenaneansene 56
+5.7 Promoting sustainable development through education and culture................ 57
+5.8 Enhancing information and metrics .............0+ OT
+6 CONCLUDING REMARKS: PLANNING FOR IMPLEMENTATION .....essseeessee 58
+6.1 Detailed sectoral work to explore transformation pathwayS ......... cscs 58
+6.2 Creation of policy package roadmaps across three phases 00... cseeeeeesneseetesseeneentesneseeneeaneenee 59
+7 REFERENCES ..esessssecsssecsssssessscessncssnecesnscesnscesnsscssnsessnecesusecssscesnuscsunsesansessnseesnucessnecesuseesneeesusessuneeesneeenneeesneess 63
+ LIST OF FIGURES
+
+ 
+
+Figure 1: SA-LEDS in the context of prior climate-related work in South Africa... 7
+Figure 2: Key contributors to GDP ou... ..eeseeseesecesessestesesseesesnesussnsaeeseeneenseesseeaeeaseaseeeensesensesaneneeneeieeneanentensenseneeees 8
+Figure 3: Contribution of main emission categories and energy emission categories to national gross greenhouse
+GAS EMISSIONS 2015 ess cescevercexcesss een ereceer cero ereceeneerann ne ceeenteerecen verre ener ee earermreneeeeenyee pene eeaner ea 13
+Figure 4: Total gross national GHG emissions by economic sector . we 14
+Figure 5: South Africa’s Peak, Plateau, Decline Trajectory Range...........c.sccsescesesessseeeseseeseeetsnssnseneeteeteeeeeeees 20
+Figure 6: Sectoral energy deMANd oo. ce eceeeseeseesneeeeseseeseeseseeeteeesneeateeteseesessussnseenesnesnieaneesenneeaeeneesneese 22
+Figure 7: Share of installed capacity in the 2019 IRP in MW... eee eesneeseeseeseeeeesesneenteeneeneenenneeniees 25
+Figuiré:8: Domestic climate finahice (2015 2017) veccicceceacwmnvecerareeneeerereaveranveerinneeeeveneeronminnveernavenveneneiertarns 49
+LIST OF TABLES
+
+Table 1: Strategic interventions outlined in South Africa’s National Adaptation Strategy 0... 19
+Table 2: Energy efficiency targets outlined in the post-2015 NEES oo... eeesessneseeteeseseeeenesiniesneenee 28
+Table 3: Measures outlined in the post-2015 NEES .0.... cee seseeesieeessmansseneeniesisenniansenee 29
+Table 4: Current institutional arrangements to address climate change response actionS.............cceseeeeeeee 45
+
+ 
+
+Table 5: The three phases of the just transition ............
+ ACRONYMS
+
+ADP
+AFOLU
+BRT
+CA
+CO2
+CoP
+CSIR
+CTL
+DAFF
+DBSA
+DEA
+DoE
+DSI
+GDP
+GHG
+GJ
+GTL
+GTS
+GWh
+HySA
+IDC
+IEP
+IGCCC
+
+Ad Hoc Working Group on the Durban Platform for Enhanced Action
+Agriculture, Forestry and Land Use
+
+Bus Rapid Transport
+
+Conservation Agriculture
+
+Carbon dioxide
+
+Conference of the Parties
+
+Council for Scientific and Industrial Research
+Coal-to-Liquids
+
+Department of Agriculture Forestry and Fisheries
+Development Bank of Southern Africa
+Department of Environmental Affairs
+Department of Energy
+
+Department of Science and Innovation
+Gross Domestic Product
+
+Greenhouse Gas
+
+Gigajoule
+
+Gas-to-liquids (GTL)
+
+Green Transport Strategy
+
+Gigawatt hour
+
+Hydrogen South Africa
+
+Industrial Development Corporation
+Integrated Energy Plan
+
+Intergovernmental Committee on Climate Change
+ IMCCC
+IPAP
+IPCC
+IPP
+
+IRP
+
+Kfw
+LEDS
+LTAS
+LTMS
+MACC.
+&E
+MINMEC
+MINTECH
+MPA
+MRF
+
+t
+
+t CO2-eq
+W
+ccc
+NCCRP
+NDC
+NDP
+EES
+
+ 
+
+NEM:WA
+
+Inter-Ministerial Committee on Climate Change
+Industrial Policy Action Plan
+Intergovernmental Panel on Climate Change
+Independent Power Producer
+
+Integrated Resource Plan
+
+German KfW Development Bank
+Low-Emission Development Strategy
+
+Long Term Adaptation Scenarios
+
+Long Term Mitigation Scenarios
+
+Marginal Abatement Cost Curve
+
+lonitoring and Evaluation
+
+Ministers and Members of Executive Councils
+Ministerial Technical Advisory Body
+
+itigation Potential Analysis
+
+Material Recovery Facility
+
+Megatonne
+
+legatonne Carbon Dioxide Equivalent
+Megawatt
+
+ational Committee on Climate Change
+National Climate Change Response Policy
+Nationally Determined Contribution
+
+National Development Plan
+
+ational Energy Efficiency Strategy
+
+ 
+
+National Environmental Management: Waste Act
+ NERSA
+
+NEVA
+
+NIPF
+
+NPC
+
+NTCSA
+
+NWMS
+
+PAMs
+
+PCCCC
+
+PJ
+
+PPD
+
+RE
+
+REIPPPP
+
+REDD
+
+SACCS
+
+SANS
+
+SA-LEDS
+
+SDG
+
+SET
+
+SJRP
+
+STEP
+
+STI
+
+SWH
+
+UN
+
+UNESCO
+
+National Energy Regulator of South Africa
+
+National Employment Vulnerability Assessment
+National Industrial Policy Framework
+
+National Planning Commission
+
+National Terrestrial Carbon Sinks Assessment
+National Waste Management Strategy
+
+Policies and Measures
+
+Presidential Climate Change Coordinating Commission
+Petajoule
+
+Peak, Plateau and Decline
+
+Renewable Energy
+
+Renewable Energy Independent Power Producer Procurement Programme
+Reducing Emissions from Deforestation and Forest Degradation
+South African Centre for Capture and Storage
+
+South African National Standard
+
+South Africa Low-Emission Development Strategy
+Sustainable Development Goal
+
+Sectoral Emissions Target
+
+Sector Jobs Resilience Plan
+
+Subtropical Thicket Ecosystem Project
+
+Science, Technology and Innovation
+
+Solar Water Heater
+
+United Nations
+
+United Nations Educational, Scientific and Cultural Organization
+
+vi
+ UNFCCC United Nations Framework Convention on Climate Change
+WtE Waste-to-Energy
+
+ZAR South African Rand
+
+vii
+ EXECUTIVE SUMMARY
+
+INTRODUCTION
+
+South Africa, like the rest of the world, is vulnerable to the impacts of climate change. In unmitigated greenhouse
+gas (GHG) emissions scenarios, warming of up to 5 to 8°C is projected over the interior of the country by the end
+of this century. Under a range of warming scenarios, drier conditions will be experienced in the west and south of
+the country and wetter conditions in the east. Rainfall patterns will become more variable and unpredictable.
+These changes will impact on water resources and food production, and increase the vulnerability of impoverished
+communities, amongst others. The South African government thus regards climate change as a considerable
+threat to the country and its socio-economic development. At the same time, if climate change is to be limited
+through limiting the growth in global GHG emissions, with South Africa contributing its fair share to emission
+reductions, there will be other implications for the country. As one of the top 20 global emitters, with a high
+dependency on fossil fuels, substantial emission cuts will be required. The rapid transition that will be required
+
+presents a potential risk to economic growth and sustainable development if not managed properly.
+
+Through the Paris Agreement, Parties to the United Nations Framework Convention on Climate Change
+(UNFCCC) have agreed to limit “the increase in the global average temperature to well below 2°C above pre-
+industrial levels, and pursue efforts to limit the temperature increase to 1.5°C above pre-industrial levels”. Article
+4 of the Agreement sets out Nationally Determined Contributions (NDCs) as the instrument countries must
+develop to present their part of the global effort to “reach global peaking of greenhouse gas emissions as soon
+as possible... on the basis of equity and “in the context of sustainable development and efforts to eradicate
+poverty”. To help ensure that the Parties’ national contributions can jointly achieve the collective goal, the Article
+further states that “Parties should strive to formulate and communicate long-term low greenhouse gas emission
+development strategies, mindful of Article 2 taking into account their common but differentiated responsibilities
+
+and respective capabilities, in the light of different national circumstances’.
+
+This document has been prepared in response to that Article, and presents South Africa’s first Low Emission
+Development Strategy (SA-LEDS). Through submitting this document to the UNFCCC our country reiterates its
+commitment to achieving the Paris goals. Implementation of the Strategy will also contribute directly and indirectly
+
+to the meeting of Sustainable Development Goals (SDGs).
+
+SA-LEDS builds upon years of work on climate change in the country, which has contributed to the establishment
+
+of an important set of policy documents. Building on existing plans offers numerous benefits, such as optimizing
+
+vill
+ resources and ensuring buy-in of key stakeholders. Three key climate policy documents provide the foundation
+on which SA-LEDS has been developed. These are:
+
+e The National Development Plan (NDP): With an overarching objective of eliminating poverty and
+reduce inequality by 2030, the NDP outlines a set of goals and actions to meet the country’s
+environmental sustainability and resilience needs, and dedicates a full chapter to “Environmental
+Sustainability - An equitable transition to a low-carbon economy”.
+
+e The National Climate Change Response Policy (NCCRP) represents government's comprehensive
+policy framework for responding to climate change, including provisions for adaptation and mitigation.
+
+e The Climate Change Bill (forthcoming) will form the legislative foundation for the climate change
+adaptation and mitigation response. With respect to mitigation, the Bill provides for future review and
+determination of the national greenhouse gas emissions trajectory; determination of sectoral emissions
+targets for emitting sectors and subsectors; and allocation of carbon budgets. It also makes provision
+for the development of plans to phase down or phase out the use of synthetic greenhouse gases - in
+
+line with the Kigali Amendments to the Montreal Protocol.
+
+Various other strategies, policies and sector plans have been developed for individual sectors of the economy,
+which will all contribute to driving emission reductions. These are detailed in later sections of this document to
+outline the set of discrete measures which serve as a starting point for implementation of the LEDS. At the same
+time, many of these plans were developed prior to the adoption of the Paris Agreement and do not consider the
+long-term, global goals in a coordinated manner and address a shorter timeframe than mid-century. Keeping SA-
+LEDS as a dynamic and flexible document is important to ensure it keeps pace with domestic policy
+developments, research, development and innovation, and declining costs of emissions mitigation technologies.
+Notable here is a process being undertaken by the National Planning Commission (NPC) to develop a common
+vision for the country in 2050. This vision will be instrumental in driving harmonisation of government plans and
+
+policies and so it is important that the NPC process and vision takes into account the Paris goals.
+
+In addition to policies and measures being implemented by national government, many sub-national (provincial
+and local) government departments are undertaking activities that contribute to the national mitigation, adaptation
+and resilience efforts. Sub-national activities have, however, not yet been aligned or coordinated, and different
+geographical locations see different levels of activity. A diverse range of actions that contribute to GHG emissions
+mitigation is also being seen across the private sector, with significant gains having been made in certain sectors
+
+on both energy efficiency and emissions mitigation.
+ Although this strategy focuses primarily on greenhouse gas emissions mitigation, the vulnerability to climate
+change impacts, as well as the need to build resilience to these impacts is noted, and will be further elaborated
+in future iterations of SA-LEDS. South Africa has developed a National Climate Change Adaptation Strategy that
+
+highlights nine key vulnerability areas for the country which acts as a complement to this document.
+
+VISION STATEMENT
+
+The stated vision for SA-LEDS is as follows:
+
+South Africa follows a low-carbon growth trajectory while making a fair contribution to the
+global effort to limit the average temperature increase, while ensuring a just transition and
+
+building of the country’s resilience to climate change
+
+In the absence of an agreed quantitative articulation of the vision, the Peak, Plateau, Decline Emissions Trajectory
+Range, as reflected in the NCCRP and NDP, is used as the benchmark against which the performance of SA-
+LEDS will be measured. The Climate Change Bill, described later, makes provision for regular updates of this
+trajectory, through which it can be better placed within the context of the Paris Agreement. The outcomes of the
+National Planning Commission process to develop a common vision for the country in 2050 will be used to update
+SA-LEDS once released. In the development of the vision, South Africa will give due consideration to the IPCC
+
+Special Report on 1.5°C, which represents the latest available science regarding this goal.
+
+GHG EMISSIONS MITIGATION MEASURES
+
+The strategy centres on measures currently being implemented by government to address mitigation across the
+four key sectors of the economy, namely energy, industry, AFOLU and waste. It also presents planned cross-
+sectoral measures that will contribute to driving mitigation action. As indicated previously, many of the measures
+address only the short term, and are not considered transformational. South Africa puts these forward as a starting
+
+point from which to ratchet up our future ambition towards more integrated, transformational strategy.
+Energy supply
+Decarbonisation of energy supply will largely be driven through the:
+
+e Integrated Energy Plan, which analyses current energy supply and demand trends within the different
+
+sectors of the economy, across all energy carriers. It then uses this information along with assumptions
+ about future demand and technology evolution to project the country’s future energy requirements under
+a variety of different scenarios, including those with emissions limits and carbon prices.
+
+Integrated Resource Plan, which guides the evolution of the South African electricity supply sector, in
+that it identifies the preferred electricity generation technologies to be built to meet projected electricity
+demand. It thus provides a mechanism for Government to drive the diversification of the country’s
+electricity generation mix and promote the use of renewable energy and other low-carbon technologies.
+Biofuels Opportunities, offered through the Biofuels Industrial Strategy of 2007 (yet to be implemented)
+and second and third generation biofuels technologies that could potentially increase the volumes of
+
+biofuel that could be produced, without competing with food products for feedstocks.
+
+Energy demand
+
+SA-LEDS supports the implementation of a selection of measures to reduce energy demand, or limit growth in
+
+energy demand, as the economy and population grows:
+
+The National Energy Efficiency Strategy: In 2005, the Department of Energy launched the first National
+Energy Efficiency Strategy (NEES). Building on this document, the Department of Minerals and Energy
+is finalizing the post-2015 NEES, which outlines a set of goals for energy efficiency improvements across
+the economy to 2030. The NEES also identifies a set of measures to be implemented in each sector to
+achieve the stated targets. The Post-2015 NEES makes provision for a review every five years.
+
+Support for increased uptake of Solar Water Heaters: Solar Water Heaters (SWH) partially offset use
+of electricity for water heating in middle- and high-income households, and can service low-income
+households that did not previously have ready access to hot water or used fuels other than electricity for
+water heating. Since 2005 a number of goals have been set, and associated support programmes have
+been established to drive uptake of SWH, with the NDP introducing a goal of five million SWHs by 2030.
+The National Building Regulations and Buildings Standards Act: To further efforts to decrease
+energy consumption and associated GHG emissions of new commercial and residential buildings, the
+government has implemented energy efficiency and energy consumption standards under the National
+Building Regulations and Buildings Standards Act. The first of these is South African National Standard
+(SANS) 204 - Energy Efficiency in Buildings. This standard “specifies the design requirements for energy
+efficiency in buildings and of services in buildings with natural environmental control and artificial
+ventilation or air conditioning systems.” The second, SANS 10400-XA — Energy Usage in Buildings,
+
+includes the provisions of SANS 204 and others, providing a standard for energy efficient buildings.
+
+xi
+ e Promotion of cleaner mobility: Emissions from energy supply in the transport sector are addressed
+through a number of policy documents. The 2007 Public Transport Strategy sets out an action plan for
+accelerated modal shifts and for the development of integrated rapid public transport networks. Since
+then, the successful implementation of the bus rapid transport (BRT) system in Johannesburg has led to
+it being adapted and implemented in other major South African cities, with further roll-outs being planned.
+In 2018 the Green Transport Strategy (GTS) to 2050 was launched. The GTS provides the strategic
+direction for the transport sector regarding the reduction of GHG emissions, the contribution of transport
+to the green economy and the promotion of sustainable mobility. The Strategy aims to support reductions
+in the contribution of the transport sector to national greenhouse gas emissions through interventions that
+include local electric vehicle and battery production and roll out of solar powered charging stations;
+continued use of fuel economy norms and standards for fuel efficiency and GHG emissions of vehicles;
+and facilitating a shift of freight from road to rail. In September 2010 a COz tax was introduced on the
+selling price of new motor vehicles that exceed a certain emissions limit.
+
+Industry
+
+Two sets of policies that directly and indirectly support emissions reductions in the industrial sector are identified,
+beyond those that target energy efficiency. The Industrial Policy Action Plan (IPAP), the implementation plan
+for the National Industrial Policy Framework, is revised at various intervals. The most recent revision, which covers
+the period 2018/19 to 2020/21, provides updates on key focus areas within the industrial sector, one of which is
+green industry investment. The implementation of technologies with potential for contribution to emissions
+reductions in the industrial sector is also supported by various tax incentives, contained in the Income Tax Act.
+Agriculture, Forestry and Land Use (AFOLU)
+
+Mitigation actions identified in the AFOLU sector include Policies and Measures developed by line departments
+including the Department of Agriculture Forestry and Fisheries (DAFF)'. These include the draft Climate Change
+Adaptation and Mitigation Plan for the South African Agricultural and Forestry sectors, the Conservation
+
+Agriculture Policy and the Agroforestry Strategic Framework for South Africa.
+
+1 Note that with a government restructure Forestry and Fisheries has now been combined with Environmental Affairs, while Agriculture
+has been combined with agriculture and the department of rural development and land reform. The implications of this restructuring on
+policy implementation has not yet been considered.
+
+xii
+ Waste
+
+Waste management activities are legislated through the National Environmental Management: Waste Act, with
+further policy direction being provided through the National Waste Management Strategy (NWMS). The Strategy
+adopts the waste management hierarchy of waste avoidance and reduction, re-use, recycling, recovery, treatment
+and disposal, activities which potentially contribute to a reduction in emissions from material life cycles2.
+Subsequent to the Waste Act and NWMS, twenty national waste management initiatives and annual targets have
+been established through a process known as the Waste Phakisa. Of the initiatives, five are likely to have direct
+and indirect impacts on the total national greenhouse gas emissions. The importance of circular economy thinking
+
+in guiding the Waste Phakisa initiatives is recognised.
+Cross-Cutting Measures
+
+In addition to the measures specific to individual sectors described, four cross-cutting measures that will support
+
+low carbon development are in various stages of being implemented.
+
+e Carbon Tax: The Carbon Tax Act was brought into effect from 1 June 2019, which gives effect to the
+“polluter pays principle” and aims to price carbon by internalising the negative costs of emitting GHGs.
+The tax rate is set at R120 per tonne of COz-eq. To allow businesses time for transition, a basic tax-free
+allowance of 60% will initially apply to all emissions, with further allowances depending on the activities.
+The tax structure will be revised post-2021 to align with the proposed mandatory carbon budgets.
+
+e Sectoral Emissions Targets (SETs): The national emissions trajectory will be translated into Sectoral
+Emission Targets or SETs, which are quantitative greenhouse gas emission targets allocated to an
+emitting sector or sub-sector, over a defined time period. Individual national government departments will
+be tasked with developing and implementing Policies and Measures (PAMs) to ensure emissions from
+within a sector or sub-sector remain within SET limits.
+
+e Carbon Budgets: Carbon Budgets set a maximum volume of emissions from certain activities that
+individual entities are allowed to emit over three rolling five-year periods. By assigning a Carbon Budget
+to an entity, a signal is provided as to the degree of GHG mitigation that is required within a specific time
+period, with a penalty being imposed if the budget allocation is exceeded. Furthermore, by providing
+
+entities with an understanding of how budgets are likely to be assigned in future phases to keep overall
+
+2 Emissions savings achieved through actions in the waste sector will not all be reflected in that sector's inventory, however they may
+contribute indirectly to national emissions savings.
+
+xill
+ national emissions within the bounds of the national emissions trajectory, which will continue to be revised
+downward in keeping with the Paris Agreement, they are sensitised to how mitigation requirements may
+change in the future. The system thereby provides an opportunity for entities to plan ahead.
+
+e Phasing out of inefficient fossil fuel subsidies/incentives: As a member of the G20, where countries
+have committed to phasing out inefficient fossil fuel subsidies, South Africa has indicated willingness to
+identify and minimise their harmful impacts, taking cognisance of its developmental state. South Africa
+should consider participating in a fossil fuel subsidy peer review within the G20 framework to facilitate
+the sharing of experience and mutual learning among G20 members as the next step in identifying
+
+inefficient fossil subsidies within the economy.
+GOING FURTHER TO ACHIEVE THE PARIS GOALS
+
+A set of stand-alone, sector-based policies and measures as well as a selection of cross-cutting interventions that
+government is busy implementing has been presented above. However, a broad range of structural changes will
+be necessary, in order to ensure the global economy achieves carbon neutrality within the second half of the
+century. Changes will be required in terms of service demand, technology fleet, infrastructure, operating practice,
+and energy sources, for all sectors of activity. As South Africa continues to strengthen its response to climate
+change as part of a global effort, it will increase its focus on a range of strategic elements that will together promote
+the change to low carbon growth, while continuing to align with the goals of the Paris Agreement. These relate
+
+to:
+
+e Enhancing the vision for development, including revising the emissions trajectory to reflect a fair
+contribution to the global achievement of the Paris Agreement
+
+e Enhancing institutional capabilities and arrangements for the transition
+
+e Creating the right financial environment through aligning fiscal strategy with sustainable growth
+
+e Providing broad access to funds
+
+e Driving innovation, research, and skills for future value capture
+
+e Ensuring a just transition with jobs for all
+
+e Promoting sustainable development through education and culture
+
+e Enhancing information and metrics
+
+Each of these is elaborated upon in the main body of the document.
+
+xiv
+ CONCLUDING REMARKS: PLANNING FOR IMPLEMENTATION
+
+SA-LEDS sets out a direction of travel for South Africa as we refine our low carbon emission development pathway
+to meet our commitments to the international community and address our developmental agenda/priorities and
+needs. We know that success will require decades of dedicated effort. Therefore, this Strategy is a living
+
+document, the beginning of our journey towards ultimately reaching a net zero carbon economy by 2050.
+
+The first step will thus be to ensure national targets are aligned with the Paris Agreement. Thereafter, planning
+teams with analytical and sectoral expertise will engage in detailed scenario work to develop transformation
+pathways towards achieving the national targets. Building a scenario is, however, not enough to plan for its
+delivery. The work of translating such a plan to policy is a challenge which all Parties will have to grapple with
+over the coming months and years. South Africa aims to inform rollout plans through the use of a dedicated
+change framework. SA-LEDS will thus be reviewed at least every five years or earlier, should there be significant
+changes in sectoral or national plans/programmes that can result in a big structural changes, growth or decay of
+
+the economy and major global events that impact on its content or implementation.
+Detailed sectoral work to explore transformation pathways
+
+The Paris Agreement sets out the long-term climate change goals for the international community. While countries
+establish their own goals in a nationally determined manner, sectoral details will have to be analyzed in significant
+detail, laying out different scenarios to understand trajectories of investment, technology take-up, emissions
+
+reduction, and market change. This work has already commenced in South Africa through a number of studies:
+
+e The Mitigation Potential Analysis (MPA), the overall objective of which was to conduct an updated,
+bottom-up assessment of mitigation potential in key economic sectors to identify a set of viable options
+for reducing GHGs. Marginal abatement cost curves (MACCs) for key sectors and subsectors were
+constructed. The MACCs provide estimates of mitigation potential and marginal abatement costs for
+broad mitigation measures. Estimates of national mitigation potential have been derived from the sectoral
+MACCs and ranked in terms of level of implementability at national level for each of the technologies.
+
+e The Pathways study to explore the impact of alternative economic growth trajectories on the country’s
+emissions trajectory, looking at the implementation of structural changes rather than the implementation
+of purely technical interventions. This study, which also used the single national emissions model, had
+
+not been released at the time of writing of this document.
+
+XV
+ e The Policies and Measures (PAMs) analysis, which explored the impact of existing PAMs, many of which
+
+were identified previously, on the emissions trajectory.
+
+Itis recognized that detailed forecasting is unlikely to accurately predict the evolution of markets. However, “failing
+to plan is planning to fail’, which is why systematic planning is recommended for all sectors. Common
+characteristics between scenarios that succeed and those that do not will help policymakers identify those
+conditions which must be met in order for the transition to succeed, aligned with Paris in a manner consistent with
+the latest science from the IPCC. Based on the sectoral pathways work, which will identify the requirements of
+the different sectors, a cross-cutting analysis of such pathways will help identify common needs. An aggregate
+understanding of the evolution over time of such critical factors such as levels of capital investment, consumer
+prices of different energy options, and requirements for skilled workers in various industries (increasing and
+
+decreasing), will set out the parameters for the cross-cutting strategies described previously.
+Creation of policy package roadmaps across three phases
+
+The likelihood of policy action leading to long-term transformation results would require the application of new
+planning techniques. Pathway planning is an analytical tool that can inform national policy development over time
+towards objectives that sit beyond a typical policy horizon. Pathways visualize the whole timespan between the
+present and the time for which a target is set, seeking to establish what steps make sense now in the context of
+reaching the long-term goal. When establishing potential pathways, the desired end-state should be linked to the
+present, by “backcasting” rather than forecasting. This means that requirements for intermediate steps between
+today and the long-term goal are deduced not on the basis of how compatible they may be with the current
+context, but rather in terms of what is required for the end-state to be achieved. This leads policy-makers to
+consider the question “what would have to be true” regarding short and medium-term checkpoints, deriving the
+
+answer from the evolution to the goal.
+
+Once pathways are clearly drawn out, regulatory, institutional, or other structural changes which are required for
+the transformation can be identified, from which necessary changes can be deduced and used to suggest
+concrete policy action. In this manner, a rigorous pathway analysis towards a long-term target can produce a
+number of concrete actions which must be carried out by a certain time, to enable other actions. It can be helpful
+to structure the time interval into three parts: short, medium and long-term, organising and communicating such
+
+actions on a three-stage timeline. These stages are:
+
+xvi
+ e Starting Right (to be completed prior to end of 2021 financial year)
+e Turning the Corner (to begin in parallel with the Starting Right stage and continue to 2025)
+e Massive Rollout (2025 to 2050)
+
+“Starting Right’ will focus on actions relating to the current government administration, or perhaps also address
+the initial years of the following one. The most important aspect of this stage is to ensure that a true transition is
+kicked off. On the one hand, rapid implementation must begin in all areas where pathways to achieving the Paris
+Goals are already clear while on the other, steps taken will need to enable future action at scale, as much as (or
+perhaps more than) drive immediate emissions reductions. Clearly, “Starting Right” cannot be successfully
+executed without a long-term pathways analysis to provide confidence on the Paris-compatibility of implemented
+measures as well as the overall direction of travel. Indeed, the search for immediate emissions reductions in the
+short-term can often lead to investments in technologies or business models which, while emitting less than
+traditional options, are not on track to drive the large reductions demanded by the long-term transformation.
+
+Avoiding decisions which will lead to emissions lock-in is thus a core priority of the “Starting Right” stage.
+
+“Turning the Corner” would typically take five to seven years. This phase will begin to be implemented in parallel
+with the “Starting Right” stage, where appropriate, and continue to 2025. This period is decisive, since within it
+new decision and investment criteria are broadly applied, bringing about changes to the day-to-day operation of
+many sectors of the economy at the same time. Resistance to change can become challenging if not well handled,
+and must be anticipated and addressed with social acceptance and just transition actions. It is at this stage that
+multiple policies will need to work in concert for the new technological options to make economic sense for
+businesses and consumers. An overall understanding of the sectoral narratives of change and how they
+
+collectively feed into the national vision will be core to the success of this stage.
+
+“Massive rollout” is the final phase, in which low-emissions climate resilient options have become the new normal.
+The constant application of transformative action will drive large volumes of investment towards transformational
+change. Perseverance on the application of all aspects of change will be required to avoid imbalances or injustices
+which will compromise the change, and sectors which achieve important milestones must not be allowed to
+become complacent, but rather contribute to the broader change by supporting areas of natural synergy.
+Examples of activities that might be taken during the three phases of implementation of the transition are shown
+in the Table below. All along the way provision needs to be made for regular review of the Strategy and the
+
+implementation plan, and M&E of implementation.
+
+xvii
+ Table E1: The three phases of the just transition
+
+ 
+
+Starting Right
+(start immediately
+and complete by
+end of 2020/21
+financial year)
+
+Start the process of developing long term plans for each sector, to avoid lock-in to emissions
+intensive infrastructure and establish the basis for transformation at scale
+
+Develop approaches for allocation of Sectoral Emissions Targets (SETs) and carbon budgets to
+high emitting entities
+
+Develop Sector Jobs Resilience Plans (SJRPs) to support the transition to the low carbon
+economy and climate resilient society in a Just manner
+
+Identify the institutional, legislative, finance and other changes required to achieve the
+transformation
+
+Develop an understanding of the relevant government decisions which need to be taken to
+achieve the long-term plans
+
+Develop a monitoring plan
+
+ 
+
+Turning the corner
+(start immediately,
+as _ appropriate,
+and complete by
+2025)
+
+Develop and begin to implement detailed transformation plans for each sector, which is
+supported by the implementation of the SETs, carbon budgets and SJRPs
+
+Develop investment pathways to support the transformation
+
+Implement foundational changes to drive down the national trajectory
+
+Implement the institutional changes to accelerate the rate of transformation and remove barriers
+
+ 
+
+Massive _ roll-out
+
+(to 2050)
+
+ 
+
+ 
+
+Roll-out the implementation plans for each sector along with measures to support changes until
+they become the new reality
+Refine strategies as required, to account for changes in technologies, society and markets
+
+ 
+
+Successful rollout across the three stages will require policy action to be taken in a coordinated manner. It is
+
+helpful to present policies not as stand-alone actions but rather as parts of policy packages, combinations of
+
+measures which may include planning, regulatory, financial, and other instruments to collectively drive towards
+
+the desired outcome, providing capabilities and overcoming barriers to change. Complementarity and sequencing
+
+are both crucial to building effective policy packages. Proposed components of policy packages could include
+
+those that focus on planning; institutional / regulatory considerations; project implementation; financing;
+
+acceptance, skills and just transition; and avoiding lock-in. Policy packages should be built up in sequence over
+
+time to ensure the full implementation of the pathway, in the form of a policy pathway which is required to
+
+implement the low-carbon transition.
+
+xviii
+
+ 
+ 1 INTRODUCTION
+
+1.1. The global climate crisis
+
+Robust scientific evidence shows that the earth’s climate system is changing as a result of anthropogenic
+greenhouse gas (GHG) emissions. Concentrations of GHGs in the atmosphere have been rising steadily since
+the industrial revolution (circa 1760), mainly as a result of the burning of fossil fuels, industrial processes,
+deforestation and agricultural activities. An extensive global body of research from climate scientists has
+confirmed the relationship between human-induced GHG emissions, higher global average surface temperatures
+and changes to the earth’s climate system (IPCC, 2014; IPCC, 2018).
+
+If current trends continue, global average temperatures are likely to increase by at least 1.5°C above pre-industrial
+levels between 2030 and 2052. The impacts associated with such temperature increases are significant and far-
+reaching; threatening people and ecosystems. The impacts, which become more severe the greater the
+temperature increase, include sea level rise as a result of melting polar ice and glaciers, increases in the frequency
+and severity of extreme weather events, changing ecosystems and desertification, ocean acidification, and loss
+of biodiversity. The knock-on effects on human populations include health risks due to increasing temperatures
+and heatwaves, water shortages, food insecurity, increased spread of diseases and pests as well as damage to
+
+infrastructure due to extreme weather events. All of these impacts have economic repercussions (IPCC, 2014).
+
+The severity of impacts is not only a function of the magnitude and rate of warming that is experienced, but also
+geographic location and levels of development and vulnerability. Along with other developing nations, South Africa
+is particularly vulnerable to the impacts of climate change. In unmitigated GHG emissions scenarios, warming of
+up to 5 to 8°C is projected over the interior of the country by the end of this century. Under a range of warming
+scenarios, drier conditions will be experienced in the west and south of the country and wetter conditions in the
+east. Rainfall patterns will become more variable and unpredictable. These changes will impact on water
+resources and food production, and increase the vulnerability of impoverished communities, amongst others
+(DEA, 2013). For this reason, the South African government regards climate change as a considerable threat to
+the country and its socio-economic development, having the potential to undermine many of the advances made
+in recent years. At the same time, if climate change is to be limited through limiting the growth in global GHG
+emissions, with South Africa contributing its fair share to emission reductions, there will be other implications for
+
+the country. As one of the top 20 emitters globally, with a high dependency on fossil fuels, substantial emission
+ cuts will be required. The rapid transition that will be required presents a potential risk to economic growth and
+
+sustainable development if not managed properly.
+
+1.2 The Paris Agreement
+
+The international community has a long history of working to address the climate challenge. The United Nations
+Framework Convention on Climate Change (UNFCCC) was adopted in 1992 to "stabilize greenhouse gas
+concentrations in the atmosphere at a level that would prevent dangerous anthropogenic interference with the
+Climate system". All 197 member states of the UN are parties to the Convention, and South Africa ratified the
+
+Convention in August 1997.
+
+Annual Conferences of the Parties (or COPs) have achieved different milestones since the first meeting in 1994.
+The Kyoto Protocol, adopted in 1997, set out the first concrete emissions reductions targets, which were adopted
+by some Annex | (developed) countries. However, these reductions were insufficient to stop climate change. A
+global deal, seeking to involve all countries, was pursued at COP 15 in 2009 but was not achieved, leaving many
+Parties concerned about the complexity of agreeing such a deal. At COP 17, held in Durban, South Africa in 2011,
+the “Ad Hoc Working Group on the Durban Platform for Enhanced Action” (ADP) was established to "develop a
+protocol, another legal instrument or an agreed outcome with legal force under the Convention applicable to all
+Parties". The work of the ADP culminated in the drafting of the text which was negotiated and ultimately adopted
+
+in 2015 by the Parties to the Convention, including South Africa, as the Paris Agreement.
+
+In the Paris Agreement, Parties collectively agree to limit “the increase in the global average temperature to well
+below 2°C above pre-industrial levels, and pursue efforts to limit the temperature increase to 1.5°C above pre-
+industrial levels”. Article 4 of the Agreement sets out Nationally Determined Contributions (NDCs) as the
+instrument countries must develop to present their part of the global effort to “reach global peaking of greenhouse
+gas emissions as soon as possible, recognizing that peaking will take longer for developing country Parties, and
+to undertake rapid reductions thereafter in accordance with best available science, so as to achieve a balance
+between anthropogenic emissions by sources and removals by sinks of greenhouse gases in the second half of
+this century, on the basis of equity and “in the context of sustainable development and efforts to eradicate poverty”
+(UNFCCC, 2015).
+
+In order to help ensure that the Parties’ national contributions can jointly achieve the collective goal, the Article
+further states that “Parties should strive to formulate and communicate long-term low greenhouse gas emission
+
+development strategies, mindful of Article 2 taking into account their common but differentiated responsibilities
+ and respective capabilities, in the light of different national circumstances”. This document has been prepared in
+
+response to that Article.
+
+1.3 The Science of 1.5°C and what it means for the Paris goals
+
+At the time of adoption of the Paris Agreement there was limited scientific literature available regarding the goal
+of 1.5°C, making it difficult for Parties to gauge the effort required of their NDCs to achieve it. Parties therefore
+invited the Intergovernmental Panel on Climate Change (IPCC) to provide a special report on the impacts of global
+warming of 1.5 °C above pre-industrial levels, and the related global greenhouse gas emission pathways. This
+Special Report, published in 2018, sets out the latest available science for countries to refer to when planning
+
+their implementation of the Agreement (IPCC, 2018).
+
+The Special Report makes clear the scale of the challenge facing all Parties in achieving the objectives of the
+Paris Agreement. With regards to the temperature goal, it shows that every tenth of a degree centigrade in
+warming makes a significant difference to the impacts on people and ecosystems, making 1.5°C of warming much
+more closely aligned with the objective of the Convention, than 1.6°C, 1.6°C preferable to 1.7°C, and so on.
+Furthermore, the Special Report shows that, to be consistent with 1.5°C, global CO2 emissions by 2030 must be
+about 45% lower than those of 2010, reaching net zero emissions around 2050. Since global emissions have
+continued to grow practically every year since the convention was signed, despite climate efforts to date, anumber
+of important in-depth changes will have to take place very quickly around the world for this to be credible. The
+IPCC describes these as “deep emissions reductions” in energy, industrial, urban, agricultural, and land
+management systems, which will transform key aspects of the world economy (IPCC, 2018). For this to succeed,
+
+the coming decade will be decisive.
+
+The challenge of incorporating this rapid transformation into country plans must be resolved in a nationally
+determined manner. Developed countries, which have committed to take the lead, must rapidly change the nature
+of their investments both nationally and internationally to avoid locking in emissions. At the same time, the scale
+
+of the reductions required means developing countries must also start to implement transformational changes.
+
+For example, if a developing country were to commit to the target of 45% emissions reduction in double the time
+recommended by the IPCC (which could be consistent with the IPCC global scenario provided developed
+countries acted much earlier), and at the same time maintained a dynamic economic growth to reduce poverty,
+that country’s emissions intensity per unit of GDP by the year 2042 would need to be under a quarter of its present
+
+value. This has very clear implications: for developing as well as developed countries, before 2050 the core
+ technologies in operation must be fundamentally different from today’s. This is because there is no technological
+scenario possible which achieves such a reduction while maintaining electric power primarily generated from coal,
+oil or gas (without carbon capture), or in which passenger transport is provided primarily by petrol/diesel internal
+combustion engine vehicles. Fossil fuel participation in power generation, where still present, will be only a minor
+share of the total, and will continue to decline. Urban infrastructure and planning will have reduced the demand
+for passenger kilometers travelled per person for a broad range of activities, and these will be provided far more
+through shared platforms than today (be these traditional public transport, or new asset types serving through
+innovative business models). The majority of these passenger kilometers will be provided by zero-emissions
+
+vehicles/platforms, with energy supplied from renewable sources.
+
+The availability of sustainable bioenergy and biomaterials will be limited by global constraints of forest coverage,
+biodiversity, and food security. These products must be channeled to applications with limited alternatives (such
+as long-haul aviation), reducing their potential availability as a drop-in substitute for fossil fuels in the bulk of
+traditional power, energy, or transport applications. Industrial and commercial energy use will incentivise resource
+efficiency at every turn, with service fulfilment models and product specification, design, and production processes
+
+all re-engineered to practically eliminate emissions.
+
+1.4 Methodological elements for developing LEDS
+
+The broad scope of change required to achieve the Paris Agreement presents several important planning
+challenges and opportunities. The LEDS planning process provides a space for Parties to use to reflect upon how
+their national plans can achieve emissions pathways consistent with the Paris Agreement, within their common
+but differentiated responsibilities and respective capabilities. While the timelines, targets and sectorial details of
+the transformation will vary by country, the expectation is that all targets should follow a downward trajectory. To
+achieve such a trajectory, transformational rather than incremental change is needed: while most national policies
+aim to effect limited change within one area of national life over a timeframe of one to five years, the transformation
+described in the IPCC Special Report on 1.5 degrees will require planning over a 30-year timeframe to ensure
+
+broad-based change across all sectors in a coordinated manner.
+
+The decisive change of operating technologies requires a concerted, planned effort if it is to occur in an
+economically rational manner over such a short timeframe. The timing dimension is crucial. While 2050 may seem
+a long way off for citizens going about their daily life, or indeed in terms of changing government administrations,
+
+the speed of technological change is determined by the lifetime of assets and their rate of replacement. If we
+ consider power generation plants which consume coal, many of these can operate 30 or 40 years after
+commissioning, and while an internal combustion engine vehicle lifetime may extend to 15 years in the
+industrialized world, vehicles of 25 years of age or more can be regularly seen on the streets of Africa. Investments
+in city and transport infrastructure are also built with the expectation they should last for over 30 years. This means
+that the investments made today and during the current NDC period will determine much of the activity, and
+
+associated emissions, of 2050.
+
+Creating a LEDS which aligns with the Paris Agreement thus requires new planning approaches and tools. Clear,
+ambitious long-term targets must be set, consistent with the Paris goals. From these, policy makers must establish
+what are the medium and short-term requirements needed to ensure the achievement of the long-term goals, to
+inform actions taken on a much shorter timeframe so they can help rather than hinder success and avoid long-
+
+term lock-in to emissions intensive options.
+
+Transformation pathways, which show how changes must occur over time, must be developed, linking the desired
+end-state with the current economic and technological structures. Enough is known about the direction of travel
+required in all sectors to identify some key components of such trajectories in parallel to the process of agreeing
+
+the long-term targets.
+
+Specialist analytical work should feed into the transformation pathways across all sectors of activity, so the
+credible projections of national emissions can be made, and to allow clear visibility of the trade-offs which will
+emerge. Once the technology scenario options have been outlined, specific policies must be considered to guide
+the transformation. Single policies will not be enough to effect such change, however: policy packages including
+regulatory, financial, planning, project execution, social justice, and lock-in considerations must be built up so
+their coordinated impact can achieve the transformation. In addition, Parties must identify the enablers of the
+transition which are required but cannot be provided by the country alone, but rather by the international
+
+community through collaboration.
+
+The implementation of the policies and interventions can be thought of three stages. In the first stage, the in-
+depth plans and changes which will be required in order for the transformation to take place will be identified, and
+the most pressing lock-in threats avoided. The second is the inflection stage (beginning in parallel with the first
+stage where appropriate) in which climate policies become an ongoing consideration in an ever-larger number of
+decisions, changing the character of investments and policy decisions to leave behind development models which
+imply GHG emissions. The final rollout stage follows during which climate-compatible modalities are fully adopted
+
+in all sectors, and implemented continuously to achieve the transformation through ongoing technology
+ replacement. The benefits of economies of scale and the global transition will provide a positive feedback to the
+
+rollout, making Paris-compatible options the most viable throughout this stage.
+
+1.5 South Africa LEDS — a living document
+
+This document presents South Africa’s first Low Emission Development Strategy (SA-LEDS) generated after the
+adoption of the Paris Agreement. Through submitting this document to the UNFCCC our country reiterates its
+commitment to achieving the Paris goals. It also highlights that implementation of the Strategy will contribute
+
+directly and indirectly to the meeting of Sustainable Development Goals (SDGs).
+
+SA-LEDS builds upon years of work on climate change in the country, which has culminated in the establishment
+of an important set of policy documents (Figure 1). Building on existing plans, policies and aligned research, and
+particularly the work that is supported by robust analytical and domestic engagement processes, offers numerous
+benefits, such as optimizing resources and ensuring buy-in of key stakeholders. At the same time, many of these
+plans were developed prior to the adoption of the Paris Agreement and therefore do not consider the long-term,
+global goals embedded therein in the coordinated fashion that is required. Furthermore, most of these pre-existing
+
+plans and policies address a shorter timeframe than mid-century.
+
+The National Planning Commission (NPC) is currently undertaking a process to develop a common vision for the
+country in 2050. This vision will be instrumental in driving harmonisation of government plans and policies and so
+in order to make these more aligned with the methodological elements of developing a LEDS presented in Section
+
+1.4, itis important that the NPC process and the vision it develops takes into account the Paris goals.
+ UNFCCC
+
+Paris Agreement
+
+Low Emissions
+Development
+Strategy (LEDS)
+
+National Planning
+aE alta cy
+
+Mer me rE
+
+Analytical Studies
+
+ning and
+
+National Development Plan (NDP)
+NPC vision process (ongoing)
+
+Ne een Cun ele re
+
+National Policy (MPA)
+(EIR realest) D
+
+National Climate Change
+Response Policy (2011)
+
+Carbon tax
+Climate Change Bill (forthcoming)
+Other departments’ policies
+
+ 
+
+ 
+
+UNFCCC: Has an objective to "stabilize greenhouse gas concentrations in the atmosphere at a level that would prevent dangerous anthropogenic interference with
+the climate system"
+
+Paris Agreement: Refers to post-2020 climate actions countries intend to take under the Agreement
+
+Low Emissions Development Strategy (LEDS): Communication of mid-century long-term low GHG emissions development strategies, towards the goal of limiting
+global warming to well below 2°C and to pursuing efforts to limit the increase to 1.5°C
+
+National Development Plan (NDP): Long-term development plan that aims to eliminate poverty and reduce inequality by 2030. Recognises the need for a just low
+carbon transition
+
+NPC vision process (ongoing): Process to develop a low-carbon vision for the country to guide mitigation and adaptation action
+
+National Climate Change Response Policy (2011): Framework for South Africa’s climate mitigation and adaptation response
+
+Carbon Tax: Sets a price on greenhouse gas emissions from certain activities
+
+Climate Change Bill (forthcoming): Establishes the legal framework for implementation instruments to drive mitigation and adaptation
+
+Other departments’ policies: Other government policies across many departments either increase or decrease GHGs
+
+Mitigation Potential Analysis (MPA): Projections of National Greenhouse Gas emissions under “technically feasible” mitigation action
+
+Pathways study: National emissions trajectories under alternative economic futures and enhanced/step change mitigation action
+
+Policies and Measures (PAMs) study: Impact of existing PAMs on the national emissions trajectory
+
+ 
+
+ 
+
+ 
+
+Figure 1: SA-LEDS in the context of prior climate-related work in South Africa
+
+Despite being based largely on current knowledge and legislative context, SA-LEDS will be updated as new and
+critical areas of work are completed by relevant government departments. Keeping SA-LEDS as a dynamic and
+flexible document is important to ensure that it keeps pace with domestic policy developments, research,
+development and innovation, and the declining costs of emissions mitigation technologies.
+ 2 THE SOUTH AFRICAN ECONOMY, EMISSIONS PROFILE AND POLICY LANDSCAPE
+An overview of the local economy, greenhouse gas emissions profile and relevant policy, legislation and strategies
+
+is provided to set the context in which SA-LEDS has been developed.
+
+2.1 South Africa’s Economy
+
+South Africa has the second largest economy in Africa, after Nigeria, with a nominal 2019 GDP of US$ 371.298
+billion and nominal GDP per capita in that year of US$ 6,331 (IMF, 2019). Figure 2 shows the sectoral
+contributions to GDP. At the same time, South Africa is amongst the most economically unequal countries in the
+world, as reflected by the Gini Coefficient of 0.63 in 2014 (World Bank, 2019).
+
+Agriculture, 3% Other, 3%
+Construction, 4%
+
+   
+    
+ 
+ 
+
+Finance, real estate and
+business services, 22%
+
+Trade, catering and
+accommodation , 15%
+
+Government services,
+17%
+
+Transport, 7%
+
+Personal services, 8%
+
+Mining , 8%
+
+Manufacturing , 14%
+
+Figure 2: Key contributors to GDP
+
+Source: (Stats-SA, 2017a)
+
+2.1.1. Energy supply
+
+In 2016, the country’s total primary energy supply was approximately 5,880 Petajoules (PJ), with fossil-fuels (coal,
+crude oil petroleum products and natural gas) supplying about 88% of the energy needs (IEA Bioenergy, 2018).
+According to the 2018 Energy Sustainability Index, developed by the World Energy Council, South Africa is ranked
+ 85! on the Energy Sustainability Index out of 125 countries. Low performance in environmental sustainability in
+this index is due to the electricity sector's heavy reliance on coal, while increasing petroleum prices, coupled with
+rising electricity tariffs, contributed to the low score on energy equity (WEC, 2014). While approximately 84% of
+households in South Africa are electrified, energy poverty is still a significant challenge. As many as 2 million
+South African households are still without access to electricity (Stats SA, 2017b). Universal access is a key priority
+
+for the South African government.
+
+More than 90% of the country’s electricity is generated from coal by the national utility, Eskom. In recent years,
+a number of Independent Power Producers (IPPs) have entered the electricity market, predominately generating
+renewable energy. The main driver of growth in IPPs is the Renewable Energy Independent Power Producer
+Procurement Programme (REIPPPP). The REIPPPP is a competitive tender process that is designed to
+incentivise renewable energy project development. By the end of June 2019, the REIPPPP had achieved the
+following (DoE, 201 9a):
+
+e 6,422 MW of electricity had been procured from 112 Renewable Energy Independent Power Producers
+(IPPs) in seven bid rounds;
+
+e 3,976 MW ofelectricity generation capacity from 64 IPP projects has been connected to the national grid;
+
+e 35,669 GWh of energy has been generated by renewable energy sources procured under the REIPPPP
+
+since the first project became operational.
+
+Eskom also has an active research programme which looks at renewable energy development amongst topics.
+Eskom’s efforts in this regard have mainly been centred on the development of wind energy, pumped storage
+and PV projects. The Ingula Pumped Storage Scheme is in commercial operation with four 333 MW generators.
+Furthermore, Eskom’s Sere Wind Farm became fully commercially operational in 2015, with a capacity of 100
+MW (DoE, 2019b).
+
+A number of South Africa’s existing coal-fired power stations will be retired between 2030 and 2050, and so large
+investments in additional generation capacity will be needed in order to meet the projected electricity demand
+and sustain economic growth. Across the country favourable conditions for wind power are found, and the high
+levels of solar irradiation make it ideal for solar power. Biomass opportunities are available, many of which are
+along the east coast which is tropical and characterised by large wood and sugar plantations. There is also some
+
+potential for small and micro scale hydropower.
+ South Africa's liquid fuels requirements are met through local refining of imported crude oil, sourced mainly from
+the Middle East and other African countries, through synthetic fuel produced from coal-to-liquids (CTL) and gas-
+to-liquids (GTL) processes and through refined product imports. The six main liquid fuel producers are Sapref,
+Enref, Natref and Chevref (refining crude oil) and Sasol and PetroSA (producing synthetic fuels from coal and
+gas) (SAPIA, 2017). Apart from the production of liquid fuels, crude oil and coal are both used to produce a variety
+of petrochemical products such as lubricants, bitumen and solvents. Being a net crude oil importer leaves South
+
+Africa vulnerable to price fluctuations and volatility on global oil markets.
+
+Natural gas plays a relatively minor role in the primary energy supply. Local production is mainly from the
+Bredasdorp Basin, which lies offshore on the southern coastline. This basin supplies natural gas to PetroSA’s
+Mossel Bay GTL facility. The bulk of the country’s natural gas demand is, however, met through imports from
+Mozambique’s Temane and Pande gas fields. The gas is imported via a high-pressure pipeline and supplied to
+Sasol and other industrial and commercial customers mainly within Gauteng Province. The finalisation of the Gas
+Utilisation Master Plan, which has been under development for a number of years, will help to provide policy
+
+certainty on the role that gas will play in the energy mix moving into the future.
+
+2.1.2. Mining and the industrial sector
+
+South Africa accounts for a substantial proportion of the world’s mineral resource reserves, with non-energy
+minerals having an estimated value of approximately US$ 2.5 trillion (DMR, 2011). Key mineral outputs include
+gold, coal, manganese, chrome, platinum and diamonds (dti, 2015). Domestically, coal provides over 70% of the
+country’s primary energy supply (South African Government, 2012). South Africa is also major producer of non-
+ferrous metals (aluminium, copper, brass, lead, zinc and tin). Non-ferrous metals and stainless steel accounts for
+about a third of all the country’s manufactured products output. Minerals represent an important source of export
+revenue. Having said that, coal prices and markets are demonstrating volatility due in part to global
+
+decarbonisation efforts. This is likely to become even more relevant moving into the future.
+
+The chemical industry is dominated by the emissions-intensive synthetic coal and natural gas-based liquid fuels
+industry, as well as the petrochemicals industry. South Africa has the largest chemical industry in Africa and is
+the world leader in coal-based synthetic fuel and gas-to-liquids (GTL) technologies. Other chemicals produced in
+
+South Africa include ammonia, nitric acid, carbide, titanium oxide and carbon black.
+
+South Africa also has an active manufacturing sector. However, liberalisation of the markets at the end of
+
+apartheid resulted in manufacturing industries in South Africa struggling to remain competitive against more
+ diversified manufacturing industries in countries such as China, Vietnam and Bangladesh (Bhorat and Rooney,
+2017).
+
+2.1.3 Agriculture, Forestry and Land Use (AFOLU)
+
+South Africa’s agricultural sector is diverse, with distinct farming regions that vary with climate, soil type and
+farming practices. The sector includes field crops, horticulture and animal products. Animal products currently
+generate the highest proportion of gross farm sector income, although the contribution from horticulture products
+is growing (DAFF, 2017a). Commodities produced include maize, wheat, sugar, deciduous fruit and citrus, wine,
+beef, dairy, lamb, pork, poultry and game. Livestock farming is the biggest contributor to the sector, and also the
+largest contributor to AFOLU GHG emissions. Even though its contribution to total GDP is relatively small, and
+has declined over the years due to the rise of other economic sectors, agriculture, forestry and fishing remains a
+
+key provider of rural employment and export earnings (DAFF, 2017a).
+
+2.1.4 Waste sector
+As in many other countries, a growing population, a growing middle class and increased rates of urbanisation are
+putting pressure on solid waste and waste water management facilities. Waste streams are also becoming
+
+increasingly diverse in their composition, which affects the complexity of management processes.
+
+The amount of waste landfilled in South Africa significantly exceeds the amount that is diverted, either through
+reuse or recycling. The recently published Draft South African State of Waste Report shows that around 42 Mt of
+general waste was generated in South Africa in 2017 (DEA, 2018a). Only about 11% of this was recycled, with
+
+the remainder being disposed of to landfill.
+
+Several landfills in the eight larger metropolitan areas are close to reaching their available air space or have
+already reached their limits. Rapid urbanisation and high costs of building new engineered landfills has led to less
+suitable landfill space being available. Moreover, the practice of landfilling is becoming less socially acceptable.
+As such, government is pursuing initiatives to reduce waste generation and divert waste from landfill. These
+
+initiatives are discussed further in Section 4.5 .
+
+2.1.5 Other sectors
+Tourism remains a priority growth area due to it being highly labour intensive, supports for small businesses and
+
+generation of foreign direct investment (dti, 2015, South African Government, 2012). The trade sector is made up
+ of several divisions, including retail and wholesale, motor, accommodation and catering, food and beverages (dti,
+2017). The remaining sectors contributing towards the economy are finance, real estate and business services,
+government services, personal services and construction (dti, 2017). Finance real estate and business services
+
+in particular continue to contribute positively to GDP growth.
+
+2.2 Greenhouse gas emissions profile
+
+The latest National Greenhouse Gas Inventory Report (2015) shows that South Africa’s total gross GHG
+emissions (excluding forestry and other land use) increased by 23% from 439 Mt CO2-eq in 2000 to 541 Mt CO2-
+eq in 2015 (DEA, 2019a). Forestry and land use are a CO2 sink and reduced gross emissions by 5% in 2015.
+South Africa’s net GHG emissions are 512 Mt COo-eq.
+
+The Energy sector accounted for 79.5% of the total gross emissions for South Africa in 2015 (Figure 3), with the
+percentage contribution of this sector to overall emissions growing by 25% between 2000 and 2015. Energy
+industries (which includes electricity generation and liquid fuels production from both crude oil and coal) were the
+main contributor, accounting for 60.4% of emissions from the energy sector and almost half of gross emissions.
+This was followed by transport, other sectors, and manufacturing industries and construction. Fugitive emissions
+from fuels contributed another 5% to overall emissions in 2015. Agriculture, Industrial Processes and Product
+
+Use and Waste contributed 9.0%, 7.7% and 3.6% to gross national GHG emissions in 2015 respectively.
+ aisle) Melee toi)
+
+AFOLU (excl. FOLU)
+%
+
+ae ENERGY
+79%
+Manufacturing Industires and
+
+construction 7%
+
+Bie-lasjecenam ley
+
+Le) iT -TeeS Les oleh)
+
+Fugitive emissions from fuels 5%.
+
+ 
+
+Figure 3: Contribution of main emission categories and energy emission categories to national gross greenhouse gas emissions
+in 2015
+
+If national emissions are expressed in terms of economic sectors rather than emission categories (see Figure 4),
+electricity generation contributes 42% of gross national emissions. Industry accounts for 27% of national
+emissions, with approximately a third of industry emissions associated with process emissions and the other two
+thirds are as a result of energy use. Emissions from transport and agriculture contribute 10% each, with the
+residential, commercial and waste sectors making up the remainder. Figure 4 also shows that 85% of greenhouse
+gas emissions in 2015 are in the form of COz. Methane (CHa) contributes 9%, with over half of these emissions
+being from agriculture.
+
+13
+ 42%
+
+     
+ 
+
+__ Methane(CH,
+Nitrous Oxide (N,Q) ~
+
+4)
+
+’ HRstoy,
+HFCs, PFCs
+
+27% . Carbon dioxide (CO,)
+
+  
+
+10% 10%
+5%
+3% 4%
+ii ZZ ian
+Electricity Industry Transport Agriculture Commercial Residential Waste
+generation
+
+Figure 4: Total gross national GHG emissions by economic sector
+
+The carbon intensity of the economy (tonnes CO2-eq per R1,000) and the energy intensity of the economy (tonnes
+oil equivalent (toe) of energy per R1,000) have decreased between 2000 and 2015, by 18.7% and 12.4%
+respectively. This is attributed to growth in the less energy intensive services and financial sectors together with
+a decline in manufacturing and mining (DEA, 2019a).
+
+2.3 Policy, legislation and strategies that inform SA-LEDS
+
+Three key climate policy documents provide the foundation on which SA-LEDS has been developed. These are:
+e The National Development Plan (NDP)
+e The National Climate Change Response Policy (NCCRP)
+e The Climate Change Bill (forthcoming)
+
+In addition to these three central documents, various strategies, policies and sector plans have been developed
+
+for individual sectors of the economy, which will all contribute to driving emission reductions. These documents
+ are detailed in later sections to outline a set of discrete measures which serve as a starting point for
+
+implementation of the LEDS.
+
+2.3.1 National Development Plan 2030
+
+The overarching objective of the National Development Plan 2030 (NDP) is to eliminate poverty and reduce
+inequality by 2030. Climate change impacts and mitigation are highlighted as critical issues throughout the
+document. Chapter 5 is dedicated to “Environmental Sustainability - An equitable transition to a low-carbon
+economy” and addresses both the use of natural resources and mineral deposits to support the transition of the
+economy to a diverse, inclusive and low-carbon future, and tackling developmental challenges towards building
+resilience to the impacts of climate change, particularly in poorer communities. In Chapter 3, economic
+development and the key drivers of change are discussed — one of which relates to the need for a just transition
+to a low carbon economy. Chapter 4 focuses on infrastructure, including energy infrastructure, noting the need
+
+for diversification of energy supply and for cleaner coal technologies (South African Government, 2012).
+
+The NDP outlines a set of goals and actions to meet the country’s environmental sustainability and resilience
+
+needs. Those that contribute to climate mitigation include:
+
+¢ Achieving the peak, plateau and decline trajectory for GHG emissions (See Section 3);
+¢ Entrenching an economy-wide carbon price by 2030;
+¢ Implementing zero emission building standards by 2030; and
+
+¢ Achieving absolute reductions in the total volume of waste disposed to landfill each year.
+
+The Plan also highlights co-benefits of mitigation action which include increasing energy security and enhancing
+
+socio-economic and environmentally sustainable growth.
+
+2.3.2 National Climate Change Response Policy
+
+In 2011, the South African government published a National Climate Change Response Policy (NCCRP), which
+represents government's comprehensive policy framework for responding to climate change (DEA, 2011)?. The
+two key objectives of the NCCRP are:
+
+3 Note that this document was published as a white paper but is now considered as a policy document
+ Effectively managing inevitable climate change impacts through interventions that build and sustain
+South Africa’s social, economic and environmental resilience and emergency response capacity; and
+
+Making a fair contribution to the global effort to stabilise greenhouse gas concentrations in the
+atmosphere at a level that avoids dangerous anthropogenic interference with the climate system, within
+a timeframe that enables economic, social and environmental development to proceed in a sustainable
+
+manner.
+
+The Policy presents a vision for an effective climate change response and the long-term transition to a climate-
+
+resilient, equitable and internationally competitive low carbon economy and society. This vision is premised on
+
+government's commitment to sustainable development and a better life for all.
+
+In support of achieving these objectives and achieving the vision, the Policy outlines a strategic approach to both
+
+mitigation and adaptation. The mitigation components of the strategic approach were later captured in the Climate
+
+Change Bill, as discussed in Section 2.3.3 below.
+
+The four key principles that underpin the approach are that actions need to be:
+
+Needs driven and customised: Employ a wide range of adaptation and mitigation approaches, policies,
+measures, programmes interventions and actions, including those that meet the special needs and
+circumstances of those most vulnerable;
+
+Developmental: Prioritise climate change responses that have both mitigation and adaptation benefits
+and that also have significant economic growth, job creation, public health, risk management and poverty
+alleviation benefits;
+
+Transformational, empowering and participatory: Include policies and measures to address climate
+change at a scale that enables and supports the required level of innovation, sector and skills
+development, finance and investment flows needed to realise the full benefit of a transition to a low
+carbon, efficient, job-creating, equitable and competitive economy; dynamic and evidence-based; and
+Balanced and cost effective: Incorporate a balanced approach to both climate change mitigation and
+adaptation responses in terms of cost-benefit, prioritisation, focus, action and resource allocation; and
+provide for the integration of sector-related climate change responses into the relevant sector planning
+
+processes and their developmental policies and measures.
+ The Policy was the culmination of an iterative and participatory policy development process started in October
+2005, that involved a wide range of stakeholders, including national departments, provincial and local
+
+governments, parastatals, academia, research institutions, business, civil society and labour.
+
+2.3.3 Climate Change Bill
+
+The South African government is finalising its Climate Change Bill. Upon adoption, the Bill will form the legislative
+foundation for the climate change adaptation and mitigation response. With respect to the mitigation response,
+the Bill provides for future review and determination of the national greenhouse gas emissions trajectory;
+determination of sectoral emissions targets for emitting sectors and subsectors; and allocation of carbon budgets.
+Sectoral emissions targets and carbon budgets are discussed further in Section 4.6.3 and 4.6.4. The Bill also
+makes provision for the development of plans to phase down or phase out the use of synthetic greenhouse gases
+
+— in line with the Kigali Amendments to the Montreal Protocol.
+
+2.4 The role of sub-national government and the private sector
+In addition to the policies and measures being implemented by national government, sub-national government
+
+and the private sector also have a role to play in achieving the vision of SA-LEDS.
+
+2.4.1. Sub-national government
+
+Many of the sub-national (provincial and local) government departments are already undertaking activities that
+contribute to the national mitigation, adaptation and resilience efforts. Such activities include the development of
+urban low emissions development strategies and broader climate change strategies, and the implementation of
+a wide range of projects from embedded generation installations on their own buildings to implementing local
+
+building codes that support energy efficiency to interventions in the waste sector.
+
+Sub-national activities have, however, not yet been aligned or coordinated, and different geographical locations
+see different levels of activity. The Climate Change Act will seek to address this consideration. In terms of the
+Act, provincial and district municipality intergovernmental forums will be required to serve as Provincial Forums
+on Climate Change. The Forums will be responsible for coordinating climate change response actions and
+reporting in their jurisdictions. Furthermore, provinces and district and metropolitan municipalities are required to
+prepare climate change needs and response assessments (which are updated every five years), and thereafter
+
+develop and implement a climate change response implementation plan, which also requires five yearly updates.
+ A number of Cities are also members of global City movements relating to climate action and city networks that
+contribute to the climate change agenda such as 100 Resilient Cities, ICLE! Local Governments for Sustainability,
+and C40 Cities Climate Leadership Group. Many have internal (through their statutory planning documents) and
+global carbon commitments and targets that apply to the functions of Transport planning, Urban development and
+Spatial planning, Infrastructure investment and service delivery. Furthermore, there is increasing regional
+coordination and horizontal integration of climate change responses as municipalities are sharing practice and
+
+learning with one another, such as through the Kwazulu-Natal Climate Change Compact.
+
+Some of South Africa’s metros are pioneering Net Zero Carbon Building policy and regulations. This requires that
+buildings exceed the country’s energy efficiency and energy consumption standards, and that their remaining
+energy demand is met by renewable energy. These initiatives are expected to scale the market for zero emission
+
+buildings and support the national pathway to net zero carbon buildings.
+
+2.4.2 The contribution of the private sector
+
+A diverse range of actions that contribute to GHG emissions mitigation is being seen across the private sector in
+South Africa, with significant gains having been made in certain sectors on both energy efficiency and emissions
+mitigation. The private sector action is being driven by a growth in understanding of the business opportunities,
+local and global market pressure and existing and forthcoming legislation. Actions range from adopting new
+products and processes to new service offerings to retrofitting of existing operations to make them more energy
+
+efficient and less emissions intensive. With suitable support this growth in action will continue.
+
+2.5 Vulnerability and resilience
+
+Although this strategy focuses primarily on greenhouse gas emissions mitigation, the vulnerability to climate
+change impacts, as well as the need to build resilience to these impacts is noted, and will be further elaborated
+in future iterations of SA-LEDS. South Africa has already developed a National Climate Change Adaptation
+Strategy that highlights nine key vulnerability areas for the country (DEA, 201 9b):
+
+e Unreliable and uncertain access to water;
+
+e Risks to agricultural productivity and livestock;
+
+e Human safety from climate related extreme events;
+e Poor service delivery in human settlements;
+
+e Vulnerable energy systems and other infrastructure;
+ e Diminished labour force productivity through exposure and health impacts;
+
+e Risks to markets due to supply and demand volatility;
+
+e Economic risks due to carbon intensity and dependence of the economy; and
+
+e Impacts on ecosystems and challenges for conservation.
+
+The National Adaptation Strategy also outlines a set of six strategic interventions that will contribute to the vision
+
+of a climate resilient South Africa. The interventions and target outcomes are shown in Table 1.
+
+Table 1: Strategic interventions outlined in South Africa’s National Adaptation Strategy
+
+ 
+
+Intervention
+
+Target outcome
+
+ 
+
+Achieve an effective adaptation planning regime that
+
+adequately responds to climate change threats
+
+Achieve an effective adaptation planning regime that
+covers at least 80% of the South African economy by
+2025
+
+ 
+
+Define adaptation practice that integrates biophysical
+and socio-economic aspects of vulnerability and
+
+resilience
+
+Define an adaptation vulnerability and resilience
+framework implemented from 2020 across 100% of
+
+key adaptation sectors
+
+ 
+
+Establish effective governance & legislative processes
+
+to integrate climate change in development planning
+
+Define and legislate for adaptation governance
+through the Climate Change Act by 2019
+
+ 
+
+National and sectoral implementation of adaptation
+actions
+
+Achieve a 100% coverage of climate change
+
+considerations in sectoral operational plans by 2025
+
+ 
+
+Achieve adequate and predictable financial resourcing
+of adaptation actions and needs, from a variety of
+
+sources
+
+Achieve 80% resourcing of national adaptation
+needs, primarily from national fiscus, including
+
+international sources
+
+ 
+
+Develop an M&E system that tracks implementation of
+
+adaptation actions and their effectiveness
+
+ 
+
+ 
+
+Development of a national M&E system to track
+vulnerability, resilience, implementation and resource
+allocation by 2025
+
+ 
+
+3 VISION STATEMENT
+
+SA-LEDS is grounded in South Africa’s climate change response as encapsulated in the documents described in
+
+the previous section, while taking cognisance of the country’s international climate change commitments and
+
+aspirations. The stated vision for SA-LEDS is as follows:
+
+ 
+ “South Africa follows a low-carbon growth trajectory while making a fair contribution to the global effort to
+
+limit the average temperature increase, while ensuring a just transition and building of the country’s
+
+resilience to climate change”.
+
+In the absence of an agreed quantitative articulation of the vision, the national GHG emissions trajectory, as
+reflected in the National Climate Change Response Policy (NCCRP) and the NDP, is used as the benchmark
+
+against which the performance of SA-LEDS will be measured. The GHG trajectory, also referred to as the peak,
+plateau and decline (PPD), shown in Figure 5 below, indicates that SA’s GHG emissions should peak in the period
+2020 to 2025 in a range with a lower limit of 398 Mt CO2-eq and upper limits of 583 Mt CO2-eq and 614 Mt CO2-
+eq for 2020 and 2025 respectively. Emissions will then plateau for up to ten years after the peak within the range
+with a lower limit of 398 Mt CO2-eq and upper limit of 614 Mt CO2-eq. From 2036 onwards, emissions will decline
+in absolute terms to a range with a lower limit of 212 Mt CO2-eq and an upper limit of 428 Mt CO2-eq by 2050.
+
+The Climate Change Bill makes provision for regular updates of this trajectory, through which it can be better
+
+placed within the context of the Paris Agreement.
+
+MtCO,-eq
+
+1000
+900
+800
+
+700
+2025,... 2035, 614
+
+2020, 583
+
+600
+
+ 
+ 
+
+2050, 428
+
+   
+
+500
+
+400
+
+   
+
+2025, 398
+300 2035, 398
+
+200
+2050, 212
+100
+
+0
+2015 2020 2025 2030 2035 2040 2045 2050
+
+Figure 5: South Africa’s Peak, Plateau, Decline Trajectory Range
+
+20
+ As indicated previously, a process is currently being undertaken by the National Planning Commission to develop
+a common vision for the country in 2050. The vision will be used to update SA-LEDS once released. In the
+development of this vision, South Africa will give due consideration to the IPCC Special Report on 1.5°C, which
+represents the latest available science regarding this goal. This report sheds new light on the global rate of
+emissions reductions required to keep warming to 1.5°C with no or low overshoot. While it is agreed that
+developed countries must take the lead in reducing emissions, in is also imperative that global totals not be
+exceeded, because developing countries will suffer most from the negative impacts of such a collective failure to
+limit global emissions. These challenges — which the IPCC Special Report has presented so clearly to the
+international community — will play a key role in setting our national goals. We thus commit to ultimately moving
+towards a goal of net zero carbon emissions by 2050, which will require various interventions to reduce
+greenhouse gas emissions. This goal, how it will be achieved to ensure a just transition, and how the economic
+
+advantages of the transition will be maximised, will be formally communicated in future iterations of this strategy.
+
+4 GHG EMISSIONS MITIGATION MEASURES
+
+This section describes measures currently being implemented by government to address GHG emissions
+mitigation across the four key sectors of the economy, namely energy (supply and demand), industry, AFOLU
+
+and waste. It also presents further planned cross-sectoral measures that will contribute to driving mitigation action.
+
+It is recognised that many of the measures presented here address only the short term, and are not considered
+to be transformational. South Africa puts these forward as a starting point from which we will be able to ratchet
+up our future ambition towards more integrated, transformational strategy, through the approach described in
+Section 5 and 6 of this document.
+
+4.1 Energy supply
+
+Energy supply is the mandate of the Department of Mineral Resources and Energy. Decarbonisation of energy
+supply will largely be driven through the Integrated Energy Plan, the Integrated Resource Plan and the Industrial
+Biofuels Strategy, issued by the Department of Energy, the predecessor of this Department.
+
+4.1.1 Integrated Energy Plan
+
+Energy planning is guided by the Integrated Energy Plan (IEP). The White Paper on Energy Policy of the
+Republic of South Africa of 1998 identified the requirement for development of the IEP, with the National Energy
+
+21
+ Act of 2008 further defining the objectives thereof. The Energy Act also mandates the Minister of Energy to
+develop, review and publish the IEP.
+
+The IEP approach analyses current energy supply and demand trends within the different sectors of the economy,
+across all energy carriers. It then uses this information along with assumptions about future demand and
+technology evolution to project the country’s future energy requirements under a variety of different scenarios,
+including those with emissions limits and different carbon prices. Based on an analysis of the scenario outcomes,
+the IEP can define the future trajectories for electricity, liquid fuels and gas in the country.
+
+The current IEP dates from 2003, and the Department of Energy has been working on updates thereof, with a
+draft IEP outlining various energy scenarios having been issued in 2016 (DoE, 2016a). The draft IEP provides an
+indication of the sectoral energy demand, as shown in Figure 6. This breakdown is relevant in this document in
+that it helps to contextualise the mitigation measures presented below. The IEP update with a clear trajectory for
+the energy sector is critical to guiding overall energy planning for the country, including in the context of this
+
+document to support a just transition away from fossil fuels towards a low carbon future.
+
+   
+
+Transport
+32%
+
+Residential
+14%
+
+Mining
+. 7%
+Commerce Agriculture
+
+7% 3%
+
+Figure 6: Sectoral energy demand
+Source: DoE, 2016a
+
+22
+  
+
+4.1.2 Integrated Resource Plan
+
+The Integrated Resource Plan (IRP) guides the evolution of the South African electricity supply sector, in that it
+identifies the preferred electricity generation technologies to be built to meet projected electricity demand. It thus
+provides a mechanism for Government to drive the diversification of the country’s electricity generation mix and
+promote the use of renewable energy and other low-carbon technologies.
+
+The 2019 IRP represents South Africa’s current policy position, an update on the 2010 IRP (DoE, 2019c). The
+2019 update includes:
+
+e Extension of the period of analysis to look at the period to 2050 (the IRP 2010 only looked to 2030),
+however 2019 IRP only provides a build plan to 2030;
+
+e Updated demand projections; and
+
+e Updated technology costs.
+By extending the coverage to 2050, the impact of decommissioning Eskom’s coal fired generation capacity on
+the long-term requirements for new capacity is clearer. According to the IRP, the decommissioning schedule
+shows that about 10,599 MW of Eskom’s coal generation capacity will be decommissioned by 2030, with the
+figure increasing to 35,000 MW by 2050. For reference, the installed capacity in in 2018 was 37,149 MW.
+
+The IRP is developed by first projecting the country’s long-term electricity demand, taking into account the impact
+of both population growth and economic development, and the role that energy-efficiency and demand-side
+interventions can play. It then presents a base case and a number of scenarios‘ which all provide an electricity
+generation supply mix which can meet future electricity demand at least cost, taking into account the need for
+ensuring security of supply. To explore how the build plan could contribute to a decline in South Africa’s GHG
+
+4 Scenarios explored included those which have no cap on annual build on renewables, changes to gas prices and the application of a
+carbon budget
+
+23
+ emissions in line with the current commitments, modelling of the base case included a carbon constraint to
+account for the electricity sector's proportional contribution to meeting the PPD trajectory. A scenario was also
+tested in the 2019 IRP where the emissions space available to the sector under the PPD (5,470 Mt COz) is divided
+
+into three ten-year carbon budgets.
+
+Drawing on the scenarios analysed in the IRP 2019, an “emerging long-term plan” to 2030 has been developed.
+The IRP proposes a set of policy adjustments to ensure “a practical plan that will be flexible to accommodate
+new, innovative technologies that are not currently cost competitive, the minimization of the impact of
+decommissioning of coal power plants and the changing demand profile.” It is noted that although demand
+projections and decommissioning profiles to 2050 are discussed, the 2019 IRP only provides an indicative
+
+generation build plan to 2030. This is attributed to technology uncertainties beyond that time frame.
+
+For the first time, a provision for embedded generation is included in the IRP. Embedded Generation (also referred
+to as distributed generation) refers to electricity generation installations of capacities of between 1MW and 10MW
+that are connected to the national grid. Embedded generation using renewable technologies is attracting
+substantial investment and funding in both the private and public sector (with the latter typically being at sub-
+national government level), and is set to grow exponentially. In recognition of this growth potential, a provision for
+4,000 MW of other generation by 2030 is made, which includes embedded generation as well as co-generation,
+biomass and landfill gas generation. Government, through the National Energy Regulator of South Africa
+(NERSA) has been in the process of finalising the regulations governing embedded generation for an extended
+period, an activity which requires urgent resolution. Although this has not yet been resolved at the national level,
+
+number of individual municipalities have already put in place grid feed-in tariffs.
+
+The IRP also proposes a set of research and analysis activities to be undertaken to support the low carbon
+transition of the electricity supply sector. These include detailed studies on the impact of gas supply options on
+electricity supply, the appropriate level of penetration of RE in the South African national grid, the cost and
+economic benefits associated with other clean energy options as well as socio-economic impacts of communities
+affected by the decommissioning of coal fired power stations. Such activities can help contribute to low emissions
+
+transformation of the electricity sector in a manner that is informed, feasible and just.
+
+24
+  
+
+Transformation of the electricity supply sector
+The IRP (2019) makes provision for renewables being added to the electricity supply mix, both to meet growing
+demand and to replace power stations that will be decommissioned. Short-term additions to the mix include:
+e 2,500 MW of new hydro capacity being built by 2030
+e 6,814 MW of new PV capacity being built between 2019 and 2030
+e 15,762 MW of new wind capacity being built between 2019 and 2030
+e 4,000 MW other generation being added to the grid between 2019 and 2030
+e 300 MW of Concentrated Solar Power to be built in 2019
+Provision is also made for 1,500 MW of new coal-fired power station capacity, beyond that which has already
+been committed to. The resulting electricity supply mix in 2030 is shown in Figure 7.
+
+8%
+
+1%
+
+   
+
+Coal
+a Hydro
+Nuclear
+44% Storage
+a Pv
+
+23%
+
+B wind
+csP
+
+a Gas/diesel
+
+7% 2% 3%
+
+Figure 7: Share of installed capacity in the 2019 IRP in MW®
+
+Through regular updates to the IRP, and making early commitments to deep transformation of the sector post
+2030, ambition can be increased. However, including new coal-fired power stations in the build plan will result
+
+ 
+
+ 
+
+in further lock-in to carbon intensive electricity supply, or the potential for stranded assets in the sector.
+
+ 
+
+5 Note that the figure excludes embedded generation, due to a lack of information on how much has already been installed.
+
+25
+ The 2019 IRP is based on the current articulation of the PPD trajectory. Future updates to the IRP will need to
+take into account any future modifications to the emissions trajectory. In this way electricity supply planning will
+
+be aligned with the country’s increasing national ambition.
+
+4.1.3 Biofuels opportunities
+
+The Biofuels Industrial Strategy of the Republic of South Africa (DMR, 2007) outlines Government's approach to
+the development of a biofuel sector in the country. The primary aim of the Strategy is to address poverty and
+unemployment, although the role in climate change mitigation in the liquid fuels sector is recognised. The Strategy
+proposed a 2% penetration of biofuels in the national liquid fuel supply (400 million litres per annum), within five
+
+years of its publication.
+
+In support of the strategy, the Regulations Regarding the Mandatory Blending of Biofuels with Petrol and Diesel
+were published in the Government Gazette in August 2012. The Regulations describe the eligibility and process
+for purchasing biofuels for blending and specify the type of records that need to be kept. The Regulations also
+specify that (i) the minimum concentration to be allowed for biodiesel blending is 5% by volume; and (ii) the
+
+permitted range for bio-ethanol blending is between 2 and 10% by volume.
+
+Although the regulations were published in 2012, implementation has not yet begun. However, in 2019 the Energy
+Minister signalled a commitment to implementing the biofuels regulatory framework to support a local biofuels
+
+industry. Through inclusion in SA-LEDS the intention to support implementation of the Strategy is signalled.
+
+Since the development of the Strategy, advancements have been made on second and third generation biofuels
+technologies. These process routes could potentially increase the volumes of biofuel that could be produced in
+
+South Africa, without competing with food products for feedstocks.
+
+6 Second generation biofuels are made from lignocellulosic feedstocks, and thus do not compete with food crops for feedstocks. Third
+generation biofuels are made from algae.
+
+26
+  
+
+4.2 Energy demand
+
+SA-LEDS supports the implementation of a selection of measures to reduce energy demand, or limit growth in
+energy demand, as the economy and population grows:
+
+e The National Energy Efficiency Strategy;
+e Support for increased uptake of Solar Water Heaters;
+e The National Building Regulations and Buildings Standards Act; and
+
+e Promotion of cleaner mobility.
+
+These measures not only contribute to reductions in emissions associated with fossil fuels, but also to energy
+security and energy access.
+
+4.2.1 National Energy Efficiency Strategy
+
+In 2005, the Department of Energy launched the first National Energy Efficiency Strategy (2005). Building on this
+document, the Department of Minerals and Energy is finalizing the post-2015 National Energy Efficiency Strategy
+(NEES), which outlines a set of goals for energy efficiency improvements across the economy to 2030 (DoE,
+2016b). Table 2 captures the targets included in the NEES, with the explanation of how each of these targets was
+established being provided in the NEES document.
+
+27
+ Table 2: Energy efficiency targets outlined in the post-2015 NEES
+
+ 
+
+Sector/subsector
+
+Goal
+
+ 
+
+Public buildings sector
+
+- 50% reduction in specific energy consumption (measured as GJ annual energy
+
+consumption per m2 of occupied floor area), by 2030.
+
+ 
+
+Municipal services
+
+- 20% reduction in the energy intensity (measured as energy consumption per
+capita of population served) of municipal service provision, by 2030. The
+specific services included are street lighting, traffic lights, water supply and
+waste water treatment.
+
+- 30% reduction in the fossil fuel intensity of municipality vehicle fleets
+(measured as total fossil fuel consumption by municipal vehicles per capita of
+
+population served), by 2030.
+
+ 
+
+Residential sector
+
+- 33% reduction in the average specific energy consumption of new household
+appliances purchased in South Africa, by 2030.
+
+- 20% reduction in the average specific energy consumption of the residential
+building stock, by 2030.
+
+ 
+
+Commercial sector
+
+- 37% reduction in the specific energy consumption (measured as GJ annual
+
+energy consumption per m? of lettable/habitable floor area), by 2030.
+
+ 
+
+Industry sector
+
+- 16% reduction in the weighted mean specific energy consumption for the
+manufacturing industry, by 2030
+- 40 PJ cumulative total annual energy saving from specific energy saving
+
+interventions undertaken by in the mining subsector.
+
+ 
+
+Agriculture sector
+
+1 PJ verified electricity saving from officially supported projects, annually
+
+ 
+
+Transport sector
+
+ 
+
+ 
+
+20% reduction in the average vehicle energy intensity (measured in MJ/km) of
+the South African road vehicle fleet, by 2030.
+
+ 
+
+ 
+
+The NEES also identifies a set of measures to be implemented in each sector to achieve the stated targets. These
+
+are shown in Table 3.
+
+28
+ Table 3: Measures outlined in the post-2015 NEES
+
+ 
+
+ 
+
+ 
+
+ 
+
+ 
+
+ 
+
+ 
+
+ 
+
+ 
+
+ 
+
+ 
+
+ 
+
+ 
+
+ 
+
+ 
+
+ 
+
+ 
+
+ 
+
+ 
+
+ 
+
+ 
+
+ 
+
+Sector Measures fae
+rame
+Introduce mandatory Energy Performance Certificates in all rented properties and 2
+: : 7 years
+publicly accessible buildings
+Develop the public sector awareness raising campaign to facilitate the “leading by 5.Vears
+example” approach y
+Publie Introduce standards and labelling relevant for public sector appliances and
+sector : 2 years
+equipment
+Announce a 15-year trajectory for the successive tightening of the energy B years
+performance component of building standards and successively tighten standards y
+Roll-out the provision of energy and activity data to the public sector 1 year
+Municipal _| Develop municipal energy efficiency strategies 3 years
+sector Support the implementation of energy savings measures 5 years
+Announce a 15-year trajectory for the successive tightening of minimum energy
+performance standards for household appliances and successively tighten | 5 years
+standards
+Develop a strongly branded energy performance certification mark for household
+appliances (modelled on the “Energy Star“ brand), in addition to the planned | 5 years
+energy efficiency labels.
+Residential | Announce a 15-year trajectory for the successive tightening of the energy
+sector performance component of building standards for residential buildings and | 5 years
+successively tighten standards
+Build on the existing awareness-raising activities targeting households and the 5 years
+school curriculum y
+Roll-out the provision of energy and activity data from the residential sector 1 year
+Support technology innovation and dissemination of energy efficient cookstove 5 years
+technologies y
+Introduce mandatory Energy Performance Certificates in all rented properties and 2
+; 5 7 years
+publicly accessible buildings
+Commercial | Revise 12L to ensure it provides an incentive to commercial property owners 4 years
+sector Introduce standards and labelling relevant for commercial sector appliances and 9 vests
+equipment y
+Roll-out the provision of energy and activity data from the commercial sector 1 year
+Adjust the 12L tax incentive scheme 4 years
+
+ 
+
+ 
+
+29
+  
+
+ 
+
+ 
+
+ 
+
+ 
+
+ 
+
+ 
+
+ 
+
+ 
+
+ 
+
+ 
+
+ 
+
+ 
+
+ 
+
+ 
+
+ 
+
+ 
+
+ 
+
+Time
+Sector Measures frame
+Develop minimum energy performance standards for motors and motor-driven 4
+years
+systems
+Provide targeted support and advice on energy efficiency to enterprises 3 years
+Incentivise enterprises to introduce Energy Management Systems and achieve errs
+Industrial 1$050001 certification standards y
+sector Roll-out the provision of energy and production data from the manufacturing sub- 4 year
+sector y
+Develop standardised tools for voluntary reporting of energy savings from 2
+eee th ts as years
+initiatives in the mining sector
+Create technology/ learning hubs for energy efficiency 2 years
+Explore the potential for savings in agricultural vehicle use, and develop 2 Weare
+appropriate awareness-raising material y
+Agricultural | Develop targeted awareness-raising and training material on potential savings in 9 years
+sector motor-driven systems y
+Provide direct grants to small farmers / smallholders for all or part of the cost of 4 years
+interventions
+Develop fuel efficiency standards for light and heavy vehicles to improve the 5 years
+Transport overall efficiency of the vehicle stock
+sector Improve systems for ensuring road worthiness 5 years
+Roll-out the provision of energy and activity data from the transport sector 1 year
+Production | Develop the enabling framework for cogeneration and trigeneration 3 years
+and
+ost ibution | Expand intemal efficiency programmes for producers 3 years
+sector
+
+ 
+
+ 
+
+The Post-2015 NEES makes provision for a review every five years.
+
+ 
+
+30
+ 4.2.2 Support for uptake of Solar Water Heaters
+
+Solar Water Heaters (SWH) provide the opportunity to partially offset use of electricity for water heating in middle-
+and high-income households, and to service low-income households that did not previously have ready access
+to hot water or used fuels other than electricity for water heating.
+
+Since 2005 a number of goals have been set, and associated support programmes have been established, to
+drive the uptake of SWH in South Africa, with the National Development Plan introducing a goal of five million
+SWHs by 2030. In 2015 Department of Energy (DoE) took over responsibility for the National SWH programme
+from Eskom, making 5,000 subsidies available (further to those that had already been granted). The DoE aims to
+roll out new, fully subsidised low-income installations as part of their Social Programme, and is seeking to drive
+an increase in localised manufacture to have the positive co-benefit of local economic development. In addition
+to government programmes that act as drivers, the uptake of SWH continues to be supported by rising energy
+prices and electricity supply challenges.
+
+ 
+
+4.2.3 National Building Regulations and Buildings Standards Act
+
+To further efforts to decrease energy consumption and the associated GHG emissions of new commercial and
+residential buildings, the South African government has implemented energy efficiency and energy consumption
+standards under the National Building Regulations and Buildings Standards Act. Compliance with the Standards
+is required in order to ensure compliance with the Act.
+
+The first of the relevant standards is South African National Standard (SANS) 204 — Energy Efficiency in Buildings.
+This standard “specifies the design requirements for energy efficiency in buildings and of services in buildings
+with natural environmental control and artificial ventilation or air conditioning systems.” It includes provisions for
+
+orientation, maximum energy demand and the maximum annual energy consumption for various kinds of buildings
+
+31
+ in various climate zones across the country, and design provisions for all parts of buildings’ construction. The
+second standard, SANS 10400-XA — Energy Usage in Buildings includes the provisions of SANS 204 and other
+standards, towards providing a standard for energy efficient buildings.
+
+ 
+
+4.2.4 Promotion of Cleaner Mobility
+
+Emissions from energy supply in the transport sector are addressed through a number of policy documents. The
+Public Transport Strategy of 2007 set out an action plan for accelerated modal shifts and for the development of
+integrated rapid public transport networks (DoT, 2007). Since then, the successful implementation of the bus rapid
+transport (BRT) system in Johannesburg has led to it being adapted and implemented in other major South African
+cities, including Cape Town, Rustenburg, Ekurhuleni and Tshwane, with further roll-outs being planned.
+
+In 2018 the Green Transport Strategy (GTS) for 2018 to 2050 was launched (DoT, 2018). The GTS provides the
+strategic direction for the transport sector regarding the reduction of GHG emissions, the contribution of transport
+to the green economy and the promotion of sustainable mobility. The Strategy aims to support reductions in the
+contribution of the transport sector to national greenhouse gas emissions by at least 5% by 2050.
+
+Some examples of the measures in the GTS that are relevant to SA-LEDS include:
+e Exploring the potential for local electric vehicle and battery production, and growing the number of public
+charging stations, powered by solar panels, by 40 stations per year’;
+
+TItis recognised that for the full mitigation benefit of electric vehicles to be realised, concurrent electricity grid decarbonisation is required.
+
+32
+ e The continued use of fuel economy norms and standards for fuel efficiency and GHG emissions of
+vehicles. Baseline studies on the adoption of more stringent fuel standards will help to provide a platform
+for introducing cleaner fuel standards; and
+
+e Facilitating a shift of freight from road to rail. This is in recognition that freight transport was previously
+moved off rail onto road as a result of constraints in the country’s rail service, with road-based freight
+transport currently accounting for around 75% of total freight moved. The road-to-rail shift will be
+supported by the implementation of Transnet’s® Market Demand Strategy. The Market Demand Strategy
+aims to create a more balanced and appropriate market between road and rail freight transport, thereby
+reducing overloading of the road network and road infrastructure deterioration and contributing to a
+reduction in GHGs associated with rail transport.
+
+In September 2010 a COz tax was introduced on the selling price of new motor vehicles that exceed a certain
+emissions limit, in order to increase the move towards lower emissions vehicles. The levy has grown incrementally
+
+over time, and offers an established instrument that government could use for ratcheting up ambition in the
+
+transport sector.
+
+ 
+
+4.3 Industry
+
+Two sets of policies that directly and indirectly support emissions reductions in the industrial sector are identified,
+beyond those discussed in Section 4.2.1 that target energy efficiency. These are the Industrial Policy Action Plan
+(IPAP) and tax rebates for green project development.
+
+8 Transnet is the state-owned entity responsible for managing rail infrastructure and operation, ports and pipelines
+
+33
+ 4.3.1 Industrial Policy Action Plan (IPAP)
+
+The National Industrial Policy Framework (NIPF) was adopted as a broad framework governing industrial policy
+in South Africa, and thus articulates the overarching approach to industrial development (dti, 2007). The
+implementation plan for the framework is contained in the Industrial Policy Action Plan (IPAP), which is revised
+at various intervals. The most recent revision of the IPAP, which covers the period 2018/19 to 2020/21, provides
+updates on key focus areas within the industrial sector, one of which is green industry investment. Some of the
+green industry Action Programmes that will contribute to climate mitigation in the short term included in the IPAP
+
+are:
+
+e Developing a Policy Roadmap for Climate-Compatible Industrial Development;
+
+e Systemised resource efficiency data collection and reporting;
+
+e The Industrial Water Efficiency Project (which has a primary focus on water savings which is a resource
+efficiency/adaptation focus, but will have a mitigation benefit through saving energy associated with water
+supply);
+
+e The Industrial Energy Efficiency Project;
+
+e Resource-efficient and cleaner production skills development; and
+
+e Specialist skills development in resource-efficiency and cleaner production.
+
+The IPAP also supports fuel cell industry development.
+
+ 
+
+34
+ 4.3.2
+
+Tax incentives for green project development
+
+The implementation of technologies with potential for contribution to emissions reductions in the industrial sector
+
+is supported by various tax incentives, contained in the Income Tax Act of South Africa:
+
+Section 12B allows companies to deduct the cost incurred from investing in assets that are used directly
+for the production of renewable energy from their taxable income;
+
+Section 12I offers support for both capital investment and training related to Greenfield (new) and
+Brownfield (expansions or upgrades) projects within South Africa’s manufacturing sector. A mandatory
+requirement for qualification for this incentive is that projects demonstrate use of energy efficient
+equipment (in the case of greenfield projects) or at least 15% energy improvement relative to a baseline
+(brownfield projects)
+
+Section 12K provides for tax exemptions on proceeds gained from the disposal of certified emission
+reductions derived from activities registered with the Clean Development Mechanism. The tax window
+runs up to 31 December 2020, in line with termination of the second commitment period of the Kyoto
+Protocol;
+
+Section 12L provides for a tax incentive to support implementation of energy savings. Since its inception
+in 2013, major benefits have been realised in terms of energy savings of approximately 5.9 GWh, with
+associated avoidance of GHG emissions, through a spend of ZAR 3 billion by government. Major
+beneficiaries have been the mining and manufacturing subsectors. This incentive has been extended
+until the end of the first phase of the carbon tax (31 December 2022) in line with requests from
+stakeholders; and
+
+Section 37B allows companies to deduct the costs, incurred due to expenditures on environmental
+
+pollution control and monitoring equipment and/or disposal sites, from their taxable revenues.
+
+ 
+
+35
+ 4.4 Agriculture, Forestry and Land Use (AFOLU)
+
+South Africa’s land cover is dominated by open ecosystems in the form of shrublands (covering just under 40%
+of the total land area), savanna woodlands (33%) and grasslands (27%). Both indigenous forests and exotic forest
+plantations make up the remainder, with indigenous forests occupying less than 0.3% of South Africa’s land area
+
+(GeoTerralmage, 2013) and forest plantations occupying 1% of the overall land area.
+
+Changes in land use can result in the release of carbon stocks. The National Terrestrial Carbon Sinks Assessment
+(NTCSA) (2015) indicated that transformation of land through land uses including crop agriculture can reduce soil
+carbon by 40 to 60% from what existed in a natural grassland and savannah. Further, urban expansion and mining
+reduces above and below ground carbon, as does degradation, which increases soil erosion. In terms of total
+carbon sequestration, despite the small overall land coverage by forests, over 90% of CO2 absorbed in 2015 was
+
+attributed to forest land, with the remainder being absorbed by grassland and savannah.
+
+Mitigation actions identified in the AFOLU sector include Policies and Measures developed by line departments
+including the Department of Agriculture Forestry and Fisheries (DAFF). These include the draft Climate Change
+Adaptation and Mitigation Plan for the South African Agricultural and Forestry sectors, the Conservation
+Agriculture Policy (DAFF, 2017b) and the Agroforestry Strategic Framework for South Africa (DAFF, 2017c).
+
+In terms of the draft Climate Change Adaptation and Mitigation Plan, for mitigation in the agricultural sector it is
+proposed that a strategic and integrated approach is taken that addresses sustainable agriculture more broadly
+and “to build synergies and avoid conflicts between climate change mitigation and other policy objectives, and to
+avoid offsetting mitigation efforts through intensification of production or land use change." In the forestry sector,
+there is a specific objective to reduce GHG emissions through afforesting 100,000 hectares of land in the Eastern
+Cape and KwaZulu-Natal as well as strengthening and expanding current initiatives including forest rehabilitation,
+working for woodlands and the Subtropical Thicket Ecosystem Project (STEP). The implementation of the national
+Reducing Emissions from Deforestation and Forest Degradation (REDD) will lead to conservation of forest carbon
+stocks, sustainable management of forests and enhancement of the forest carbon stocks. Protecting and
+preserving existing carbon stocks in other ecosystems (those with high organic soil carbon, wetlands and some
+
+grasslands) is also identified as a mitigation priority.
+
+9 Note that with a government restructure Forestry and Fisheries has now been combined with Environmental Affairs, while Agriculture
+has been combined with agriculture and the department of rural development and land reform. The implications of this restructuring on
+policy implementation has not yet been considered.
+
+36
+ The DAFF Draft Conservation Agriculture Policy (DAFF, 2017b) provides a basis for national and sector policy
+support for increasing the uptake of conservation agriculture (CA), including no-till, conservation till, precision
+agriculture and meat production efficiency. GHG emission reduction occurs by reducing fuel consumption of farm
+vehicles, increasing yields and reduced fertiliser use. Current CA adoption by grain growers is between 20 and
+30% at a national scale.
+
+Both the establishment of plantations and agroforestry could lead to the sequestration of atmospheric carbon in
+soils and biomass. The DAFF Agroforestry Strategic Framework for South Africa (DAFF, 2017c) presents a broad
+overview of the potential for agroforestry in a South African context by providing a set of principles and strategic
+
+themes and goals. It recognises the carbon sequestration potential role of agroforestry.
+
+ 
+
+4.5 Waste
+
+Waste management activities in South Africa are legislated through the National Environmental Management:
+Waste Act (NEM:WA) (DEA, 2009). To provide further policy direction in terms of establishing fully integrated
+waste management practices in the country, the National Waste Management Strategy (NWMS) was developed
+(DEA, 2012). The Strategy adopts the internationally accepted waste management hierarchy of waste avoidance
+and reduction, re-use, recycling, recovery, treatment and disposal. Implementing activities in accordance with the
+prioritisation afforded by the hierarchy potentially contributes to a reduction in emissions from material life cycles’?
+as follows:
+
+¢ Avoidance and reduction of waste avoids emissions with production and transport of the waste that
+would have been ultimately sent to landfill;
+
+10 Emissions savings achieved through actions in the waste sector will not all be reflected in that sector's inventory, however they may
+contribute indirectly to national emissions savings.
+
+37
+ Reducing the quantity of recyclable waste sent to landfill, through the implementation of separation at
+source programmes in metropolitan municipalities and through the establishment of material recovery
+facilities (MRFs) for separation after the waste has been collected, avoids emissions with primary
+material production in the case of inert materials and avoids generation of methane in landfill in the
+case of organics; and
+
+Recovery of value through waste-to-energy (WIE) facilities avoids generation of methane from organics
+sent to landfill, and at the same time the electricity generated offsets electricity generation from fossil
+fuels. It is noted that, although included in the 2012 Strategy, WIE is no longer considered to be a
+preferred technology option, but is rather recognised to be a last resort for managing wastes for which
+
+higher value cannot be recovered.
+
+Subsequent to the Waste Act and National Waste Management Strategy, twenty national waste management
+
+initiatives, with annual targets, have been established by the DEA through a process known as the Waste Phakisa.
+
+Jointly, these initiatives aim to achieve landfill diversion of 20 million tonnes of waste per year (75% industrial and
+
+50% municipal). Of the twenty initiatives, those that are likely to have direct and indirect impacts on the total
+
+national greenhouse gas emissions include (GreenCape, 2018):
+
+Achieving a minimum of 50% of households separating organics at source by 2023;
+
+Introduction of Material Recovery Facilities (MRFs) and pelletising plants to increase plastic recycling
+rates, and formalising packaging industry producer responsibility plans;
+
+Developing capacity through a specialised programme which upskills agri-stakeholders to minimise food
+loss, and running a consumer awareness campaign to use and consume “ugly” food, towards saving
+245,000 tonnes of food waste to landfill per year;
+
+Establishing refuse derived fuel plants across South Africa, towards diverting 120,000 tonnes of waste
+from landfill; and
+
+Establishing a refrigerant reclamation and reusable cylinder industry to reduce emissions of refrigerant
+
+gases.
+
+The importance of circular economy thinking in guiding the Waste Phakisa initiatives was noted. A circular
+
+economy framing has positive benefits in terms of reducing greenhouse gases.
+
+38
+  
+
+4.6 Cross-Cutting Measures
+
+In addition to the measures specific to individual sectors, four cross-cutting measures that will support low carbon
+development are in various stages of being implemented.
+
+4.6.1 Carbon Tax
+
+The Carbon Tax Act was brought into effect from 1 June 2019. The Act gives effect to the “polluter pays principle”
+and aims to price carbon by internalising the negative costs of emitting GHGs. The tax rate is set at R120 per
+tonne of CO2-eq produced. To allow businesses time for transition, a basic tax-free allowance of 60% will initially
+apply to all emissions, with a number of further allowances depending on the activities. These provide for
+maximum tax-free allowances of between 60 and 95%. The allowances include those on fugitive emissions; for
+trade exposure; for performance above the industry benchmark; for purchasing offsets; and for voluntarily being
+allocated a (non-enforceable) carbon budget. The allowances bring the effective tax rate to between ZAR 6 and
+ZAR 48 per tonne.
+
+Post-2020, the carbon tax and the carbon budgeting system (discussed in Section 4.6.3 below) will be aligned.
+This may include the option of imposing a higher tax rate as a penalty for emissions exceeding the carbon budget.
+This interface option will help to ensure a credible price signal to drive mitigation and provide the required
+regulatory policy certainty. At this stage some of the allowances are likely to be reduced, and the voluntary carbon
+budget allowance will be completely removed.
+
+39
+ Emissions covered by the carbon tax are those that need to be reported in terms of the Department of
+Environmental Affairs’ Mandatory Reporting Regulations, although the tax is administered by the South African
+
+Revenue Services in the same way as other environmental levies.
+
+ 
+
+The role of the carbon tax
+e Through passing of the Carbon Tax Act, the government is providing a strong signal of an intention to
+implement the “polluter pays principle”.
+e At present, with the prescribed allowances, the tax rate is low. However, the ratcheting of this policy
+intervention will be achieved through reducing the allowances and increasing the tax rate.
+e Ahigher rate of tax on emissions exceeding the carbon budgets, as is being proposed once the carbon
+budgets are mandatory, will further drive mitigation action.
+
+ 
+
+ 
+
+ 
+
+4.6.2 Sectoral Emissions Targets (SETs)
+
+South Africa’s national emissions trajectory will be translated into Sectoral Emission Targets or SETs, which are
+quantitative greenhouse gas emission targets allocated to an emitting sector or sub-sector, over a defined time
+period. The sectors or sub-sectors to which SETs are allocated are still being defined, but will be aligned with the
+IPCC (2006) emissions categories to facilitate alignment with other GHG reporting. Individual national government
+departments will be tasked with developing and implementing Policies and Measures (PAMs) to ensure emissions
+from within a sector or sub-sector remain within SET limits. The allocation of the SETs will be based on the socio-
+economic benefits of introducing the Sectoral Emissions Targets; the best available science, evidence and
+information; and the mitigation options available to the sector. SETs will be determined for three rolling five-year
+
+periods.
+
+ 
+
+Sectoral Emissions Targets
+e Constraining the cumulative SETs applied across the sectors and sub-sectors within the GHG
+emissions trajectory will ensure that, as the trajectory is revised towards meeting the requirements of
+
+the Paris Agreement, a consistent message will be sent to all government departments about the
+
+ 
+
+ 
+
+requirements for implementation of PAMs to drive down emissions.
+
+ 
+
+40
+ 4.6.3 Carbon Budgets
+
+Carbon Budgets set a maximum volume of emissions from certain activities that individual entities are allowed to
+emit over three rolling five-year periods. By assigning a Carbon Budget to an entity, a signal is provided as to the
+degree of GHG mitigation that is required within a specific time period, with a penalty being imposed if the budget
+allocation is exceeded. Furthermore, by providing entities with an understanding of how the budgets are likely to
+be assigned in future phases to keep overall national emissions within the bounds of the national emissions
+trajectory, which will continue to be revised downward in keeping with the Paris Agreement, they are sensitised
+to how mitigation requirements may change in the future. The system thereby provides an opportunity for entities
+to plan ahead.
+
+The first phase of the Carbon Budgets, which runs from 2016 to 2020, is currently being implemented, with the
+allocation of company-level Carbon Budgets for a small group of companies. This phase is voluntary as there is
+no legal basis to set emission limits for sectors or companies. The second and subsequent phases (i.e. the post-
+
+2020 period) will become mandatory when the Climate Change Bill is formally approved by government.
+
+ 
+
+4.6.4 Phasing out of inefficient fossil fuel subsidies/incentives
+
+Fossil fuels are used across a number of the economic sectors in South Africa. As a member of the G20, where
+countries have committed to phasing out inefficient fossil fuel subsidies, South Africa has indicated willingness to
+identify and minimise their harmful impacts, taking cognisance of its developmental state. The subsidies
+undermine the competitiveness of renewable energy, divert financial resources from development of priority
+sectors and services such as education, health, and infrastructure; and encourage the extraction and
+overconsumption of fossil fuels (as they are under-priced). Inefficient fossil fuel subsidies act as a negative fuel
+tax or work as a negative price on carbon, and hence their phase-out entails removing market distortions which
+would result in greater efficiencies in the economy, including restructuring taxes to reflect their environmental
+impacts. An economy-wide carbon tax has been implemented from 1 June 2019 (as described above) and this
+provides a price signal to nudge the economy towards low carbon development. South Africa should consider
+participating in a fossil fuel subsidy peer review within the G20 framework to facilitate the sharing of experience
+
+41
+ and mutual learning among G20 members as the next step in identifying inefficient fossil subsidies within the
+
+economy.
+
+ 
+
+5 GOING FURTHER TO ACHIEVE THE PARIS GOALS
+
+Section 4 focused on a set of stand-alone, sector-based policies and measures as well as a selection of cross-
+cutting interventions that government is busy implementing. However, Section 1 highlighted that a broad range
+of structural changes will be necessary across economic sectors, in order to ensure the global economy achieves
+carbon neutrality within the second half of the century. Changes will be required in terms of service demand,
+technology fleet, infrastructure, operating practice, and energy sources, for all sectors of activity.
+
+Ensuring South Africa plays its role in the achievement of the Paris Agreement is the overarching purpose of this
+strategy. Therefore, as the science of climate change evolves, and our understanding matures to permeate our
+public awareness and policy processes, we will adjust our strategy accordingly. This is a living document, and
+ongoing work will ensure adequate updates are brought forward at appropriate times.
+
+As it continues to strengthen its response to climate change as part of a global effort, South Africa will increase
+its focus on a range of strategic elements that will together promote the change to low carbon growth, while
+continuing to align with the goals of the Paris Agreement. These are:
+
+e Enhancing the vision for development
+
+e Enhancing institutional capabilities and arrangements for the transition
+
+e Creating the right financial environment through aligning fiscal strategy with sustainable growth
+e Providing broad access to funds
+
+e Driving innovation, research, and skills for future value capture
+
+e Ensuring a just transition with jobs for all
+
+42
+ e Promoting sustainable development through education and culture
+
+e Enhancing information and metrics
+
+Each of these is elaborated upon in the sections that follow.
+
+5.1 Enhancing the vision for development
+The SA-LEDS vision described in Section 3 is guided by the peak-plateau-decline trajectory as defined in the
+NCCRP and the NDC. The trajectory represents the contribution South Africa commits to the global response to
+
+climate change at this time, aligned with its vision of development.
+
+As a signatory to the Paris Agreement, South Africa subscribes to the view that a progression in climate ambition
+will be necessary to achieve the global long-term goals, with all parties taking part in this progression in ambition
+with regards to mitigation, adaptation, and means of implementation, in accordance with the principles of the
+Convention. As climate science continues to further our understanding of the challenges and potential solutions
+to climate change, and economic reality broadens the range of options and global willingness to invest in them,
+South Africa will continue to both strengthen its commitments and communicate in a compelling manner how they
+
+represent our fair contribution to the global achievement of the Paris Agreement.
+
+The IPCC Special Report on the impacts of global warming of 1.5°C has provided significant new understanding
+on the targets of the Paris Agreement, as briefly discussed in Section 1.2. Itis clear that Parties must find a way
+to ensure that emissions over time decrease rapidly as part of a sustainable development pathway, consistent
+with the goal of carbon neutrality in the second half of this century. Changes in all productive sectors, and
+important enhancements of international cooperation, are required. All of these elements must be kept in mind as
+
+we enhance our long-term development vision.
+
+Determining a trajectory to carbon neutrality will require a number of processes. Sectoral scenario analyses will
+be required to inform on the range of options. For these, traditional “incremental” modeling techniques will be
+insufficient, so a transformational approach will be required. Uncertainties in speed of response and investments
+required should not limit the scenario work, but rather become part of the output, to enable policymakers to
+
+appreciate what conditions will be required to enable different trajectories.
+
+Creating a national picture out of sectoral pathways will be essential to ensure balance between the sectors can
+inform national deliberations. Stakeholders from all sectors will play a vital part, providing insights into
+
+opportunities, challenges, trade-offs and requirements which will inform the national debate and also enrich our
+
+43
+ position with regards to the international community, be it as part of the UNFCCC negotiations or in discussions
+
+with donors and investors.
+
+The analyses will seek to determine requirements for enablers from other participants in the global community,
+as appropriate. As South Africa play its part within a global effort, a range of technical pathways will be developed
+for low carbon development. The strategy development process will evaluate the opportunities within a new model
+of development, and the benefits of achieving net zero carbon emissions by 2050, alongside the challenges to
+
+the transition and the international enablers available.
+
+National life, from local politics, business decisions, and mass media communications, will have to reflect these
+ideas, preparing citizens and decision-makers for a new perspective on economic development. The climate
+
+challenge will only be tackled under the paradigm of sustainable development.
+
+5.2 Enhancing institutional capabilities and arrangements for the transition
+
+Regardless of the details of the path followed towards a carbon-neutral world, in-depth sectorial transformation
+plans will need to be developed over the coming years, with significant public and private sector collaboration, to
+lay out the transformation pathways which will lead South Africa to achieve its goals. Such planning requires
+
+political will, coordination, a participatory process, and specific analytical resources and expertise.
+
+Thus, a critical area in which institutional capabilities and arrangements should be enhanced is for the planning
+and policy-making processes themselves. These processes will have to develop targets across the whole
+economy, plan detailed actions over several timescales, and ensure the right changes can take place in the right
+way. The institutional capabilities required for these planning efforts and their implementation will require improved
+
+capabilities, as well as closer links to the research community, civil society, and the business community.
+
+As the sectoral pathways are fully identified, the required sequence of steps for their implementation should be
+mapped onto the current institutional framework in order to establish where current coordination arrangements,
+as shown in Table 4, are suitable, and where it would make sense to consider adjustments. It is important to recall
+that these will be pathways of transformation, spanning 30 years and requiring multi-step processes which should
+be mapped out in somewhat detailed sequence. Topics such as ministerial attributions, levels of government,
+chains of command, and decision-making, as well as the scope for different institutions to access resources such
+as finance, skills, or regulatory authorization, should all be taken into consideration, as they can make a significant
+
+difference to the success of the transformation.
+
+44
+ Table 4: Current institutional arrangements to address climate change response actions
+
+ 
+
+Structure
+
+Function
+
+ 
+
+Parliament and Portfolio Committees
+
+Oversee and monitor the implementation of the
+national climate change responses
+
+ 
+
+Make laws to support climate change responses in
+the country
+
+ 
+
+Presidential Climate Change
+
+Commission (PCCCC): (Yet to be established)
+
+Coordinating
+
+Coordinate and oversee the low carbon and just
+transition, including how to maximise the
+opportunities for jobs.
+
+ 
+
+The Inter-Ministerial Committee on Climate Change
+(IMCCC): Executive level committee. The Minister of
+the Environment and Minister responsible for planning
+monitoring and Evaluation in the Presidency co-chair
+meetings
+
+Coordinate and align climate change response
+efforts, including statutory and regulatory needs
+
+ 
+
+Intergovernmental Committee on Climate Change
+(IGCCC): Consists of relevant national, provincial
+departments and local government
+
+Operationalise cooperative governance on the
+climate change issues
+
+ 
+
+Ministers and Members of Executive Councils
+(MINMEC) and the Ministerial Technical Advisory
+Body (MINTECH): Facilitate a high level of policy and
+strategy coherence among the three spheres of
+government - national, provincial and __ local
+government
+
+Guide climate change work across the three spheres
+of government
+
+ 
+
+National Committee on Climate Change (NCCC):
+Multi-stakeholder Committee
+
+ 
+
+Consult with stakeholders from key sectors that
+impact on or are impacted by climate change -
+academia, business, NGOs, labour, government and
+civil society
+
+ 
+
+Advise on matters relating to national responsibilities
+
+ 
+
+ 
+
+Advise on the implementation of climate change-
+related activities
+
+ 
+
+In addition to the institutional arrangements, training and capacity building that will be required to support the
+
+transition at the national government level, infrastructure and skills will need to be developed at the sub-national
+
+45
+
+ 
+ level. Many of the sub-national government structures are currently dysfunctional and lack the capacity to support
+
+implementation of and manage funding for the actions required to support the low carbon transition.
+
+5.3 Creating the right financial environment through aligning fiscal strategy with sustainable growth
+
+The need for investment at scale and the change in purchasing choices of businesses and citizens over the
+coming years makes the fiscal regime of a country a determining factor in its ability to achieve the structural
+changes required by the joint objectives of achieving the Paris Agreement aims and eradicating poverty. The
+
+correct incentives will accelerate positive change, while misalignment can hold back action.
+
+Several considerations should inform fiscal adjustments over time. Overall tax revenue must be decoupled from
+volumes of fossil fuel sales and exports in order to ensure that financial sustainability of the state does not become
+a brake to the changes which are needed. Negative externalities should be considered for a greater share of
+intake, supported by detailed analysis including market responses over time, which itself should inform the
+
+pathway planning approach.
+
+Capital investment should be encouraged in technology and implementation choices to support Paris-compatible
+pathways. The incentives provided will have to be coherent with the long-term development pathway in order to
+ensure short-term mitigation actions do not lead to emissions lock-in, nor a boost for assets which may become
+
+stranded later.
+
+Fossil fuels subsidies and incentives which have the effect of fostering inefficient management of resources such
+as water, food, fertilizers, or public goods should be reviewed to support the transition to cleaner development.
+While such a subsidy review may cause resistance in some sectors, it provides an opportunity to ensure the use
+of state funds is progressive in terms of its distribution and enhances growth through the development of new
+businesses and investments which align fully with national objectives. Support for renewable energy options must
+be considered to accelerate their market acceptance, without building excessive distortions which may limit future
+
+competitiveness or stagnate the transformation.
+
+Significant work will be required to create an environment which is nurturing and inviting to new business models.
+From shared ownership to provision of service/experience rather than goods/commodities, different ways of
+satisfying demand — supported by ever more powerful and accessible digital platforms and networks — will
+generate tremendous growth opportunities within a population increasing its per-capita income as poverty is
+
+reduced. A forward-looking fiscal strategy, aware of the options and flexible to the evolution of new markets, will
+
+46
+ enhance such opportunities for South Africa, which will in turn bring export opportunities to Africa and the rest of
+
+the world.
+
+Additional opportunities for investment and growth will follow if the fiscal regime is inviting to new business which
+seek to on-shore significant portions of the value chain of the industries which will lead the sustainable transition;
+rather than zero-sum tariffs or restrictions, long-term policies which encourage investment, innovation, skills
+development, and early leadership of local markets which are likely to evolve later in neighboring countries, will
+
+all contribute to national wealth creation.
+
+Carbon prices must evolve over time to effectively discourage fossil fuel and other emissions, while providing
+clear market signals to investors in zero emission technologies that their investments will provide suitable returns
+over their useful lifetimes. Visibility over future carbon prices, such as legislating for a ramp-up over several years,
+provides clarity that carbon-intense investments will become uncompetitive and thus stranded, thereby informing
+
+decisions which may lock the country into future emissions.
+
+In summary, fiscal strategy over time must reconsider the balance of taxation, planning for falling sales of fossil
+fuels and seeking to reduce negative externalities, while incentives will focus on both the emissions implications
+of investments, favoring the route to net zero, and stimulating investments which take advantage of the
+opportunities created by this transition, both in the short term (such as business creation) and in the medium to
+
+long term, (such as by favoring skills development, innovation, and research).
+
+The fiscal strategy must therefore form its own pathway to 2050, balancing the needs of the transformation,
+
+economic and social development, with the viability of private sector companies and the state.
+
+5.4 Providing broad access to funds
+Access to funds in sufficient volume to meet the investment needs across a broad range of activities will be crucial
+to the success of our efforts to tackle climate change. Significant work is already underway to illustrate this need
+
+and help facilitate such access.
+
+South Africa’s National Climate Change Response Policy emphasises the importance of mobilising a wide range
+of financial and non-financial resources for both mitigation and adaptation. The Policy emphasises the need to
+draw on all available sources of domestic and international financing (DEA, 2011). South Africa’s National
+Determined Contribution goes further, and frames the ability to “catalyse, at an economy-wide scale, financing of
+and investment in the transition to a low carbon and climate resilient economy and society” as a key challenge
+
+for South Africa (DEA, 2015). Both these documents highlight the importance of international support given South
+
+47
+ Africa’s status as a developing country, and the magnitude of the challenge. Adaptation costs are difficult to
+quantify, but it could cost South Africa more than US$ 30 billion per annum to adapt to climate change for the
+period 2021-2030, and the incremental cost of mitigation action is estimated at more than US$ 1,350 billion in
+total over the period 2020-2050, or roughly US$ 44 billion per year (DEA, 2015; DEA, 2019b). Furthermore,
+Diffenbaugh and Burke (2019) find that the 1°C increase in global temperatures over the last century has already
+
+reduced the size of the South African economy by between 10 and 20%."
+
+Internationally, it is estimated that an additional US$ 13.5 trillion (in 2014 dollars) is required to remain below two
+degrees of climate change from 2015 to 2030 (Meltzer, 2016; Bhattacharya et al, 2016). This additional
+investment is, however, coupled with a reduction in investment in fossil fuel energy generation, transmission and
+distribution of US$ 5.7 trillion and US$ 3.7 trillion in upstream oil, coal and gas investments. A further
+US$ 5.1 trillion could also be saved in operating expenditure because of the reliance on low carbon technologies
+like renewables. Meltzer (2016) points out that the challenge is thus how to deal with the high upfront cost of
+
+these investments, since they are likely to more than pay for themselves over time.
+
+5.4.1 Climate finance flows to date
+
+Oliver et al (2018) find that US$ 472 billion of climate finance was deployed in 2015, US$ 455 billion in 2016 and
+between US$ 510 billion and US$ 530 billion in 2017. Of the US$ 463 billion average annual flow over 2015 and
+2016, an average of US$ 45 billion flowed from developed to developing countries, and only US$ 12 billion per
+annum (including domestic resources) was deployed in Sub-Saharan Africa. Of the US$ 463 billion average
+annual value, more than 80% originated from domestic sources (US$ 162 billion from within OECD countries and
+US$ 214 billion from within non-OECD countries). These numbers, however, cover all climate finance deployed,
+and are not comparable to the pledge by developed countries, first made at COP15 in Copenhagen, to provide
+US$ 100 billion of climate finance to developing countries by 2020. Timperley (2018) mentions that there is
+disagreement about how close this pledge is to being met. According to the UNFCCC (2018), US$ 74.5 billion of
+climate finance flowed to developing countries in 2016. International public climate finance flows to developing
+countries, however, averaged US$ 58 billion for 2015 and 2016. Oxfam (2018) believes public climate finance
+flows from developed to developing countries are much lower at between US$ 16 billion to US$ 21 billion. The
+OECD (2019) estimated the value to be US$ 46.9 billion in 2016 and US$ 54.5 billion in 2017. Using project-level
+
+11 According to the World Bank Development Indicators the size of the South African Economy was US$ 366 billion in 2018.
+
+48
+ data which doesn’t cover all climate finance flows, Timperley (2018), calculates a lower value for OECD climate
+finance to developing countries of US$ 37 billion in 2016.
+
+For 2015 to 2017, approximately US$ 160.7 million of bilateral and US$ 45.4 million of multilateral climate finance
+flowed to South Africa. Over the same period, however, the South African government deployed almost
+US$ 690 million of climate finance (DEA, 2019c).'2 The distribution of local public sector climate finance is shown
+in Figure 8. Even though South African climate finance deployment was small by international standards, it is
+nowhere near the levels that will be required from 2020 as discussed in the previous section. The percentage of
+climate finance generated from domestic versus international sources is in line with international trends over this
+period.
+
+ 
+
+Energy Efficiency and Municipal Disaster 4
+Der a Municipal Disaster
+Management funding _ 4.9% Recovery Grant
+Loans program (EEDSM) ~ 4.1% — integrated National
+~ Electrification
+_— Programme (INEP)
+0.1%
+
+      
+   
+  
+   
+
+ 
+
+45.38 million
+uso
+
+an
+
+  
+
+Manufacturing
+Competitiveness
+Enhancement
+programme (MCEP)
+2.9%
+
+National Expanded_—~
+Public Works
+Programme:
+Environmental
+protection &
+infrastructure All Grants
+
+= Conditional Grants 8.7%
+= Grants
+
+@ Loans Domestic Finance
+
+ 
+
+ 
+
+Figure 8: Domestic climate finance (2015 - 2017)
+Source: DEA (2019c)
+
+‘South Africa’s 3 Biennial Update Report (BUR-3) mentions that lags in reporting may lead to an underestimate of 2017 values.
+Climate finance information for the periods 2000-2010 and 2010-2014 can be found in BUR-1 and BUR-2.
+
+49
+ Even without considering the contribution of domestic private sector financing for climate change-related activities,
+which is likely to be significant given recent investments in renewable energy and energy efficiency in South
+Africa, it is clear that international support contributes a relatively small proportion of climate finance being utilised
+in South Africa. The contribution of domestic climate finance is also likely to increase further given the broad-
+
+based carbon tax that was put in place during 2019.
+
+International support is also highly concentrated in the form of one bilateral and one multilateral development
+partner for the period under consideration. Germany contributed 55% of bilateral and 43% of total international
+climate finance to South Africa, while the Global Environment Facility accounted for 93% of multilateral and 20%
+of total international climate finance. The bulk of international climate finance was in the form of grants, with only
+US$ 950,000 (0.5%) originating from multilateral loans (DEA, 2019c).
+
+5.4.2 Formalising climate finance structures
+
+While South Africa has made great strides in understanding its mitigation and adaptation challenge, and
+particularly in understanding the availability and attractiveness of mitigation policies and measures and the ways
+these will have to be combined to meet its international climate commitments, it has not been successful in
+accessing climate finance on a transformational scale. The climate finance that has been accessed is
+concentrated in two entities, and this creates risks in terms of the long-term certainty of flows and climate
+
+governance and independence.
+
+To address this shortcoming, South Africa is developing a comprehensive climate finance strategy. The strategy
+will take a holistic view of climate finance activities and will cover all aspects of climate finance, including: the
+quantum of climate finance required; identifying stakeholders and activities along the climate finance value-chain;
+increasing climate finance flows from different types of finance providers (e.g. bilateral finance, multilateral
+finance, domestic public finance and private sector finance), monitoring and evaluation, and climate finance
+governance structures. The strategy will ensure that climate finance frameworks are compatible with local
+conditions and ambition. Furthermore, in order to best contribute to the strategy development process, it should
+seek to identify financing pathways commensurate with technology transformation pathways and economic
+development pathways required by the transformation to a low-emissions economy (see remarks on planning for
+implementation contained in Section 6).
+
+South Africa has a framework for tracking climate finance in place, which is being operationalised as part of the
+
+national integrated climate change monitoring and evaluation (M&E) system. The climate change M&E system,
+
+50
+ however, is still under development and monitoring and reporting activities will only be automated during the final
+phase of implementation (2021-2025) (DEA, 2017; DEA, 2019c). At present climate finance is therefore being
+tracked on an ad hoc basis via informal engagements between the Department of Environmental Affairs and the
+National Treasury. The national climate finance strategy will formalise local climate finance governance,
+coordination and reporting structures. M&E will be a key focus area of the strategy, and it will seek to strengthen
+the current climate finance M&E framework by extending monitoring and reporting to include all elements of the
+climate finance value chain, including private sector finance. Furthermore, the strategy will consider the
+development of mechanisms for evaluating the outcomes of climate finance to understand the extent to which it
+is accelerating South Africa’s climate change mitigation and adaptation responses. In addition to supporting
+climate change planning by the government, it will reassure the providers of finance that it is being effectively
+
+deployed. It will also serve to illustrate the positive impact that climate finance can have in South Africa.
+
+5.4.3 Climate finance opportunities
+
+South Africa’s climate finance strategy will seek to quantify the financing requirements and identify areas where
+climate finance should be targeted. This will complement significant research that has been undertaken to identify
+sectors and activities that should be prioritised in terms of mitigation and adaptation actions. Research already
+undertaken includes the Technology Needs Assessment (which is currently being updated) (DST, 2007), the Long
+Term Adaptation Scenarios (LTAS), Long Term Mitigation Scenarios (LTMS), the latest GHG Inventory, the
+Mitigation Potential Analysis (MPA), Climate Change Mitigation Technology Implementation Plan (DEA and DST,
+2015), Global Change Research Plan and national government departmental plans (DEA, 2018b; DEA 2019c).
+Explicitly linking climate finance requirements with mitigation and adaptation needs could also create the
+opportunity to use climate finance to support technology development and transfer. Both the Green Climate Fund
+and the Global Environment Facility, for example, provide support for the development of Technology Needs
+Assessments and/or consider the results of these assessments in their lending programmes (Resende, 2019;
+Kaung-Idba, 2019).
+
+The climate finance strategy will also seek to understand why South Africa has not been successful in attracting
+more climate finance, and will attempt to significantly increase the amount of climate finance flowing to South
+Africa. As part of this process, a 5-year high-level climate finance implementation plan will be developed that will
+
+include a pipeline of financeable projects.
+
+51
+ One area where South Africa has demonstrated that it has the capacity to effectively absorb large amounts of
+climate finance, and where a scaling up of climate finance could have a positive mitigation impact relevant on a
+global scale, is the electricity supply sector (as outlined in Section 4.1.2). South Africa’s electricity supply industry
+is set for significant change in coming years as a result of an electricity supply crisis and reform of the current
+poorly performing vertically integrated utility model. South Africa has one of the most carbon-intensive electricity
+grids in the world, and recent research has shown that aggressive decarbonisation can have significant economic,
+social and environment benefits (Wright, et al., 2017; Steyn, Burton, & Steenkamp, 2017; Bischof-Niemz &
+Creamer, 2019). Significant decarbonisation of the electricity grid in the short term, however, is likely to incur
+significant transition costs, and may not happen without significant international support. The current situation,
+however, provides and unprecedented opportunity to avoid long-term carbon lock-in and significantly accelerate
+
+a just transition to a low carbon and inclusive economy.
+
+South Africa has a number of features that make it attractive as a destination for climate finance. The country has
+a well-developed financial system and a history of developing and rolling out innovative instruments for raising
+and deploying donor, public and private sector climate finance. The well-regarded Renewable Energy
+Independent Power Producer Procurement Programme (REIPPPP), for example, managed to raise
+US$ 15.83 billion of finance for utility-scale renewable energy projects, 80% of which originated from domestic
+sources (IPPP Office, 2019).13 By the end of March 2019, the REIPPPP had procured 6,422 MW of capacity
+(3,976 MW of which had been connected to the national grid). 35,669 GWh of renewable electricity had been
+generated, saving 36.2 Mt of CO2 and 42.8 million kilolitres of water. 53,339 full-time equivalent (FTE)'4 jobs were
+also created, 48,085 of which went to locals (DoE, 2019a). The economics of energy generation has changed in
+South Africa, and a growing body of evidence shows that renewable energy is now the cheapest form of electricity
+generation locally. Given the very carbon-intensive nature of South Africa’s national grid, and local energy
+investment needs going forward, this creates an unprecedented opportunity for South Africa to absorb climate
+
+finance.
+
+South African banks have also started developing financing tools aimed at the smaller-scale renewables market
+(GreenCape, 2019). Tools for aggregating and effectively deploying public sector climate finance also exist in the
+
+form of, for example, the Green Fund managed by the Department of Environmental Affairs (DEA) and the
+
+13 Calculated at the annual average South Africa Rand-US dollar exchange rate for 2018 from the South African Reserve Bank.
+14“ETE” means Full Time Employment Created. It refers to one person-year of employment. In the calculation of this number one person
+year is equivalent to 230 person days of work.
+
+52
+ Development Bank of Southern Africa (DBSA), and the Energy Efficiency and Demand-side Management Fund
+managed by the Department of Energy.
+
+The REIPPPP is also an example of using green public procurement to raise climate finance. This is an approach
+that is also being considered in other countries (see, for example, the UK Government’s Green Finance Strategy
+(HM Government, 2019)) and could be expanded in South Africa.
+
+Two municipal green bonds have been released in South Africa, by the City of Cape Town and the City of
+Johannesburg, and the Johannesburg Stock Exchange currently has three green bonds listed by financial
+institutions with a total value of US$ 385 million (PWC, 2019; Khumalo, 2019)
+
+South Africa has well capacitated development finance institutions, like the DBSA and the Industrial Development
+Corporation (IDC) that routinely channel climate finance from multilateral and bilateral donors, and private sector
+banks have also partnered with international donors to roll out innovative climate finance vehicles. An example of
+this is the US$ 98 million FIRST fund that offers long term debt finance to local small renewable energy projects
+(FIRST fund, undated). The fund is a collaboration between a local bank and the German KfW Development Bank
+
+(KfW), and is underpinned by a first-loss debt facility and grant-type funding from KfW (Hawarden, undated).
+
+Despite the sophistication and depth of South African financial markets, a number of barriers remain that restrict
+the flow of funding to climate change projects. These are not unique to South Africa and include, amongst others,
+a relatively high degree of risk aversion among local financial institutions, difficulty in accessing longer-term
+financing, credibility of off-takers, high transaction costs for smaller projects, relatively long pay-back periods and
+a lack of attractive large low carbon investment options, difficulty in raising financing for technologies that have
+not been proven locally, a lack of concessionary wholesale finance, uncertainty about future electricity prices,
+complexity and regulatory burden of environmental regulation, a lack of public sector capacity in key areas, and
+an investment environment that is not conducive to investment due to policy uncertainty (Nicholls et al, 2015;
+Cloete et al, 2016; Cloete et al, 2018). These barriers, coupled with the scale of funding that is required to address
+mitigation and adaptation, means that there is a significant need for scaled-up international support to finance the
+
+transition to a climate-resilient inclusive low-carbon economy in South Africa.
+
+Positioning South Africa as an attractive destination for climate finance offers opportunities beyond enabling a
+transition to a just, sustainable and prosperous low carbon economy as discussed below. It also creates the
+opportunity to leverage its sophisticated and deep financial markets to serve as a gateway for climate finance to
+the rest of the continent, which, as mentioned earlier, is struggling to access its fair share of climate finance.
+
+Following the example of a country like the UK (see HM Government (2019)), South Africa should use its climate
+
+53
+ finance strategy to support the local financial sector to develop a competitive advantage in accessing and
+channelling climate finance. To do this, however, the emphasis should be placed on greening the financial sector
+
+as a whole, and not just developing a climate finance niche.
+
+The reasons for this are multiple. Not only is the scale of the challenge such that countries cannot afford to
+misallocate capital, particularly while domestic sources still make up the bulk of climate finance, but carbon lock-
+in and a reluctance to allow stranded assets could jeopardise mitigation targets. Finance is a critical driver of the
+low carbon transition, and without targeting finance effectively, climate goals will not be achieved. Equally
+important, it is now well understood that neglecting to asses and price the risks inherent in climate change creates
+systemic risk within financial systems (see, for example, TCFD (2017), Vermeulen et al (2018), Poloz et al (2019),
+Giuzio et al (2019)). The Task Force on Climate-related Financial Disclosure has created a common language
+for considering both physical and transition risk related to climate change. It is important that the
+recommendations of the Task Force be mainstreamed into the South African financial sector to ensure that these
+risks are understood and managed, to provide the information required to effectively deploy finance in a climate
+compatible way (TCFD, 2017). Furthermore, as illustrated by the UK’s Green Finance Strategy, it is also important
+that all local financial regulators recognise climate-related financial factors as part of their mandate and actively
+
+monitor climate-related risk and exposure within the South African financial sector.
+
+During the transition it is critical that the financial sector enables the redirection of funds from the high-carbon
+activities that are no longer consistent with a just, sustainable and prosperous low carbon economy to the new
+
+industries and activities that will underpin it.
+
+5.5 Driving innovation, research, and skills for future value capture
+
+Boosting innovation, research and skills is a crucial lever to increase South Africa’s international competitiveness,
+and to ensure that higher-value economic activity spearheads future growth by becoming an ever-greater
+proportion of GDP over time. The transitions required to support low-carbon development present clear
+opportunities for the innovation, research, and skills agenda, particularly given that global compliance with Paris
+
+implies a large, ongoing investment over decades.
+
+South Africa’s existing research and industrial capabilities, as well as its natural resources, present a compelling
+starting point for such an expansion. The national research agenda is largely guided by the priorities set by
+national government and in particular the Department of Science and Innovation (DSI), as the national department
+
+responsible for provision of leadership, an enabling environment and resources for science, technology and
+
+54
+ innovation. With 17% of funding for the South African climate change research and technology development
+
+system coming from international sources, international research agendas also have some impact on the local
+
+agenda. The White Paper on Science, Technology and Innovation (STI) (DST, 2019) also emphasises the core
+
+themes of inclusivity, transformation, and partnerships, and recognises the important role that STI would play in
+
+mitigating and adapting to climate change impacts. The paper recognises the role of a circular economy in driving
+
+the shift to a green economy by accelerating eco-innovation.
+
+A range of existing research activities are already setting the basis for the low carbon transition. These include:
+
+The Hydrogen South Africa (HySA) Research Programme, that aims to make South Africa a global player
+in fuel cell technology, through prototyping, demonstration and commercialisation of fuel cell
+technologies;
+
+The Renewable Energy Hub and Spokes initiative aims to develop national technical capacity in wind,
+solar photovoltaic and solar thermal power. Research capacity is built at various universities throughout
+the country. Research focusses on specific individual components, as well as system design and
+production.
+
+The Lithium lon Battery Programme that was established to initiate the development of advanced energy
+storage technologies which play an essential role regarding the integration of solar and wind power.
+The South African Centre for Capture and Storage (SACCS) was established to drive the activities
+required to realise commercial scale Carbon Capture and Storage in South Africa, towards sequestering
+a portion of the emissions from coal-fired power plants, iron and steel, cement and coal gasification.
+The Waste Research, Development and Innovation Roadmap implemented by the CSIR was developed
+to assist DEA in realising the ambitions of the NWMS through research, science, technology and
+innovation. If a recycling and circular economy is realised this will drastically reduce the volumes of waste
+
+to landfill and mitigate GHG emissions.
+
+Over time, the scale of the planning related to the low-carbon transition will increase, and further research and
+
+innovation challenges will arise. Preliminary sectoral analyses have already suggested such specific research
+
+and innovation challenge areas that will need to be addressed. Examples of future research direction include:
+
+As mentioned in Section 4.1.2, the IRP proposes a set of research and analysis activities to be undertaken
+to support the low carbon transition of the electricity supply sector. These include detailed studies on the
+
+impact of gas supply options, the appropriate level of penetration of RE in the South African national grid,
+
+55
+ the cost and economic benefits associated with other clean energy options as well as socio-economic
+impacts of communities affected by the decommissioning of coal fired power stations.
+
+e Developing robust data on the long-term implications of implementing mitigation policies and measures
+across the sectors, where such information does not exist. Notable here are the transport, waste and
+AFOLU sectors.
+
+A rigorous analysis of South Africas competitiveness in the different commercial and industrial sectors which are
+likely to present the greatest opportunities from the sustainable transformation should inform the specific support
+provided to this agenda. This analysis should look across a spectrum of economic benefits, from value-chain
+
+analysis of likely technology rollouts, to regional and global competitive advantages under different scenarios.
+
+Key to the innovation, skills and value capture strategy is the idea of a 30-year transition. The planning approach
+presented in Section 6 allows for a staged approach to building up the necessary policy environment, drive
+investment, and train a diverse workforce while supporting entrepreneurial activity. Coupling this planning with
+sectoral scenario analyses will help identify concrete areas of opportunity, for which additional work will be
+
+required to fully flesh out plans.
+
+5.6 Ensuring a just transition with jobs for all
+
+South Africa’s transition to a low-carbon society and economy will have uneven socio-economic impacts. The
+transition will bring about efficiencies, investment and growth, opening up many opportunities in new areas of
+activity. However, activity will also reduce in areas linked with GHG emissions, leading to declining operations,
+diminished returns for companies, and fewer jobs in specific sectors. Impacts will differ across scales, timeframes,
+and locations. The South African government is committed to ensuring that the transition is just; that its negative
+impacts are not disproportionally borne by the most vulnerable poor and working-class communities who are
+
+simultaneously bearing the brunt of the physical impacts of climate change.
+
+To ensure that government's commitment to a just transition is realised will require a clear vision around which
+the various initiatives, policies, sectors, geographical areas and communities can organize. The vision being
+developed by the National Planning Commission (NPC), through a consultative, bottom-up process, will help to
+
+define such an end-state, together with pathways to achieve this in the key areas of land, water and energy.
+
+Appropriate and sufficiently resourced plans and policies will be necessary. International examples exist of
+initiatives to support workers and communities who currently depend on fossil fuel and other industries, on which
+
+the South African government can draw. These include initiatives in training, re-tooling, relocation, early
+
+56
+ retirement, and other forms of support. A number of such initiatives are in the planning or pilot phase, led by
+various stakeholders. A broader macro-economic view is also important. Two key policy instruments are being
+developed to manage the just transition to a low carbon economy: the National Employment Vulnerability
+Assessment (NEVA), and Sector Jobs Resilience Plans (SURPs). The NEVA will assess the employment
+characteristics of key economic sectors in the context of the low carbon transition. The SJRPs will be tailored to
+
+address the job losses in each sector, together with future opportunities.
+
+All policy measures targeting the low carbon transition should be aligned with the fulfilment of the country’s
+developmental objectives, which include alleviating poverty and reducing inequality, creating sustainable jobs and
+increasing the provision of basic services to all South Africans. In addition, specific policies and interventions will
+
+be required to support vulnerable communities in particular locations and scales, at particular times.
+
+5.7 Promoting sustainable development through education and culture
+
+Education can be a key factor in promoting sustainable development, by helping people develop knowledge,
+skills, values and behaviors which enhance their understanding and appreciation of how sustainability means a
+better life for them and their communities. Specific actions range vary the education curriculum, and must also
+include cultural and citizen awareness campaigns. Significant work is already underway globally to promote
+education surrounding climate change and sustainable development, and best practices are available, such as
+through the “Education for Sustainable Development’ program of UNESCO.'5 The concepts of economic
+
+transformation, pathways, and just transition must also be included into the educational and cultural work.
+
+South Africa should see the opportunity to obtain support for education for sustainable development as a core
+element of its overall strategy to improve education, and so should urgently set about developing a
+
+comprehensive, integrated approach to realising this opportunity.
+
+5.8 Enhancing information and metrics
+
+Ensuring availability of data is central to tracking the low carbon transition, and monitoring that this transition is
+being achieved in a way that is just to all. South Africa has already implemented mandatory reporting regulations
+to support reporting by emitters falling within certain emissions categories. Furthermore, the Department of
+
+Environmental Affairs is in the process of establishing the national M&E system, which will be used to monitor
+
+15 See http:/Avww.unesco.org/new/en/harare/about-this-office/single-
+view/news/southern_africa_celebrates_awarding_of_unesco_japan_esd_priz/
+
+ 
+
+ 
+
+57
+ implementation of mitigation actions by stakeholders across the economy and ultimately to the implementation of
+this and subsequent versions of SA-LEDS.
+
+Future work needs to ensure that data is collected in a coherent, consistent and transparent manner, and that the
+“tight” data to support decision making and planning is collected — including towards informing future updates of
+this strategy.
+
+6 CONCLUDING REMARKS: PLANNING FOR IMPLEMENTATION
+
+This strategy sets out a direction of travel for South Africa as we refine our low carbon emission development
+pathway to meet our commitments to the international community and address our developmental
+agenda/priorities and needs. We know that success will require decades of dedicated effort. Therefore, we
+present this Strategy as a living document, the beginning of our journey towards ultimately reaching a net zero
+
+carbon economy by 2050.
+
+The first step will thus be to ensure national targets are aligned with the Paris Agreement, as stated in Section
+5.1. Thereafter, planning teams with analytical and sectoral expertise will engage in detailed scenario work to
+develop transformation pathways towards achieving the national targets (see discussion in Section 6.1 below).
+Building a scenario is, however, not enough to plan for its delivery. The work of translating such a plan to policy
+is a challenge which all Parties will have to grapple with over the coming months and years. South Africa aims to
+
+inform rollout plans through the use of a dedicated change framework (Section 6.2).
+
+SA-LEDS will thus be reviewed at least every five years or at an earlier date, should there be significant changes
+in sectoral or national plans/programmes that can result in a big structural changes, growth or decay of the
+
+economy and major global events that impact on its content or implementation.
+
+6.1 Detailed sectoral work to explore transformation pathways
+
+The Paris Agreement sets out the long-term climate change goals for the international community. While countries
+establish their own goals in a nationally determined manner, sectoral details will have to be analyzed in significant
+detail, laying out different scenarios to understand trajectories of investment, technology take-up, emissions
+
+reduction, and market change. This work has already commenced in South Africa through a number of studies:
+
+e The Greenhouse Gas Emission Mitigation Potential Analysis (MPA), the overall objective of which was
+
+to conduct an updated, bottom-up assessment of mitigation potential in key economic sectors in order to
+
+58
+ identify a set of viable options for reducing GHGs. Marginal abatement cost curves (MACCs) for key
+sectors and subsectors were constructed. The MACCs provide estimates of mitigation potential and
+marginal abatement costs for broad mitigation measures. Estimates of national mitigation potential have
+been derived from the sectoral MACCs and ranked in terms of level of implementability at national level
+for each of the technologies.
+
+e The Pathways study to explore the impact of alternative economic growth trajectories on the country’s
+emissions trajectory, looking at the implementation of structural changes rather than the implementation
+of purely technical interventions. This study, which also used the single national emissions model, had
+not been released at the time of writing of this document.
+
+e The Policies and Measures (PAMs) analysis, which explored the impact of existing PAMs, many of which
+
+were included in Section 4 of this document, on the emissions trajectory.
+
+Itis recognized that detailed forecasting is unlikely to accurately predict the evolution of markets. However, “failing
+to plan is planning to fail’, which is why systematic planning is recommended for all sectors. Common
+characteristics between scenarios that succeed and those that do not will help policymakers identify those
+conditions which must be met in order for the transition to succeed, aligned with Paris in a manner consistent with
+
+the latest science from the IPCC.
+
+Based on the sectoral pathways work, which will identify the requirements of the different sectors, a cross-cutting
+analysis of such pathways will help identify common needs. An aggregate understanding of the evolution over
+time of such critical factors such as levels of capital investment, consumer prices of different energy options, and
+requirements for skilled workers in various industries (increasing and decreasing), will set out the parameters for
+
+the cross-cutting approaches detailed in Section 6.2.
+
+6.2 Creation of policy package roadmaps across three phases
+The likelihood of policy action leading to long-term transformation results would require the application of new
+
+planning techniques.
+
+Pathway planning has emerged as an analytical tool that can inform national policy development over time
+towards objectives that sit beyond a typical policy horizon. Pathways aim to visualize the whole timespan between
+the present and the time for which a target is set, seeking to establish what steps make sense now in the context
+of reaching the long-term goal. When establishing potential pathways, the desired end-state should be linked to
+
+the present, but by “backcasting” rather than forecasting. This means that requirements for intermediate steps
+
+59
+ between today and the long-term goal are deduced not on the basis of how compatible they may be with the
+current context, but rather in terms of what is required for the end-state to be achieved. This leads policy-makers
+to consider the question “what would have to be true” regarding short and medium-term checkpoints, deriving the
+answer from the evolution to the goal. Since many actions have long lead times to achieve full effect, backcasting
+
+can help identify by when core changes must take place.
+
+Once pathways are clearly drawn out, regulatory, institutional, or other structural changes which are required for
+the transformation can be identified, from which necessary changes can be deduced and used to suggest
+concrete policy action. In this manner, a rigorous pathway analysis towards a long-term target can produce a
+number of concrete actions which must be carried out by a certain time, to enable other actions. It can be helpful
+to structure the time interval into three parts: short, medium and long-term, organising and communicating such
+
+actions on a three-stage timeline. These stages are:
+
+e Starting Right (to be completed prior to end of 2021 financial year)
+e Turning the Corner (to begin in parallel with the Starting Right stage and continue to 2025)
+e Massive Rollout (2025 to 2050)
+
+The “Starting Right” stage will focus on actions relating to the current government administration, or perhaps also
+address the initial years of the following one. The most important aspect of the “Starting Right” stage is to ensure
+that a true transition is kicked off. On the one hand, rapid implementation must begin in all areas where pathways
+to achieving the Paris Goals are already clear (such as investments in renewable energy power generation, solar
+water heaters, etc) while on the other, steps taken will need to enable future action at scale, as much as (or
+perhaps more than) drive immediate emissions reductions. Clearly, the “Starting Right” stage cannot be
+successfully executed without a long-term pathways analysis to provide confidence on the Paris-compatibility of
+implemented measures as well as the overall direction of travel. Indeed, the search for immediate emissions
+reductions in the short-term can often lead to investments in technologies or business models which, while
+emitting less than traditional options, are not on track to drive the large reductions demanded by the long-term
+transformation. Because of this, avoiding decisions which will lead to emissions lock-in is a core priority of the
+
+“Starting Right” stage.
+
+The second stage, “Turning the Corner” would typically take five to seven years. This phase will begin to be
+implemented in parallel with the “Starting Right” stage, where appropriate, and continue to 2025. This period is
+decisive, since within it new decision and investment criteria are broadly applied, bringing about changes to the
+
+day-to-day operation of many sectors of the economy at the same time. Resistance to change can become
+
+60
+ challenging if not well handled, and must be anticipated and addressed with social acceptance and just transition
+actions. It is at this stage that multiple policies will need to work in concert for the new technological options to
+make economic sense for businesses and consumers. An overall understanding of the sectoral narratives of
+
+change and how they collectively feed into the national vision will be core to the success of this stage.
+
+“Massive rollout” is the final phase, in which the low-emissions climate resilient options have become the new
+normal. The constant application of transformative action will drive large volumes of investment towards
+transformational change. Perseverance on the application of all aspects of change will be required to avoid
+imbalances or injustices which will compromise the change, and sectors which achieve important milestones must
+not be allowed to become complacent, but rather contribute to the broader change by supporting areas of natural
+synergy.
+
+Examples of activities that might be taken during the three phases of implementation of the transition are shown
+in Table 5. All along the way provision needs to be made for regular review of the Strategy and the implementation
+
+plan, and M&E of implementation.
+
+Table 5: The three phases of the just transition
+
+ 
+
+e Start the process of developing long term plans for each sector, to avoid lock-in to emissions
+intensive infrastructure and establish the basis for transformation at scale
+e Develop approaches for allocation of Sectoral Emissions Targets (SETs) and carbon budgets
+
+Starting Right to high emitting entities
+
+and complete by
+end of 2020/21
+financial year)
+
+(start immediately | ¢
+
+Develop Sector Jobs Resilience Plans (SJRPs) to support the transition to the low carbon
+economy and climate resilient society in a Just manner
+
+Identify the institutional, legislative, finance and other changes required to achieve the
+transformation
+
+Develop an understanding of the relevant government decisions which need to be taken to
+achieve the long-term plans
+
+Develop a monitoring plan
+
+ 
+
+Turning the corner
+(start immediately,
+as _—_ appropriate,
+and complete by
+2025)
+
+Develop and begin to implement detailed transformation plans for each sector, which is
+supported by the implementation of the SETs, carbon budgets and SJRPs
+
+Develop investment pathways to support the transformation
+
+Implement foundational changes to drive down the national trajectory
+
+Implement the institutional changes to accelerate the rate of transformation and remove
+barriers
+
+ 
+
+Massive __ roll-out
+
+(to 2050)
+
+ 
+
+ 
+
+Roll-out the implementation plans for each sector along with measures to support changes
+until they become the new reality
+Refine strategies as required, to account for changes in technologies, society and markets
+
+ 
+
+61
+
+ 
+ Successful rollout of the pathway across the three stages will thus require policy action to be taken in a
+coordinated manner. It is helpful to present policies not as stand-alone actions but rather as parts of policy
+packages, that is to say, combinations of measures which may include planning, regulatory, financial, and other
+instruments to collectively drive towards the desired outcome, providing capabilities and overcoming barriers to
+
+change. Complementarity and sequencing are both crucial to building effective policy packages.
+Proposed components of policy packages could include those that focus on:
+
+e Planning;
+e Institutional / regulatory;
+e Project implementation;
+e Financing;
+e Acceptance, skills and just transition; and
+e Avoiding lock-in.
+Policy packages should be built up in sequence over time to ensure the full implementation of the pathway, in the
+
+form of a policy pathway which is required to implement the low-carbon transition.
+
+62
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