18-05-2025
SA's climate targets a chance to set a path for inclusive growth
Decarbonisation is not just about cleaner energy — it's about changing who owns, controls, and benefits from the new economy, write Lebogang Mulaisi and Dr Khwezi Mabasa.
South Africa is standing on the edge of a transformational opportunity. The global climate transition is no longer a distant horizon — it is unfolding rapidly, reshaping investment flows, trade dynamics, and the future of work.
At the same time, the worsening impacts of climate change are being felt locally, from water stress and agricultural losses to infrastructure damage and extreme weather.
South Africa's updated Nationally Determined Contribution (NDC), submitted under the Paris Agreement, sets out more ambitious targets for reducing greenhouse gas emissions. But the NDC must be seen as much more than a compliance exercise — it should be the blueprint for a new, inclusive economic paradigm.
The current growth model, inherited from a colonial and apartheid past, remains extractive and exclusionary. It continues to rely on resource-intensive sectors such as coal, mining, and heavy industry — sectors with declining global competitiveness and high environmental costs. Meanwhile, millions of South Africans remain locked out of economic opportunity, particularly black communities, youth, and women.
If climate action replicates these structural inequities — focusing narrowly on emissions reductions while failing to deliver economic justice — it will deepen rather than disrupt the status quo.
We need a new growth model rooted in decarbonisation, but equally in dignity, ownership, and transformation. This model must be anchored by an industrial policy that aligns with the country's climate commitments. Decarbonisation is not just about cleaner energy — it's about changing who owns, controls, and benefits from the new economy.
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South Africa's NDC identifies key sectors — energy, transport, agriculture, and waste — that are central to reducing emissions. These sectors are also strategic levers for inclusive growth.
Take the energy sector, for example. South Africa's power sector is undergoing a historic transition, with renewable energy expected to play a dominant role in the future energy mix. This transition is being driven by global capital and domestic policy, but unless actively shaped by the state, it risks replicating past injustices.
So far, the rollout of renewable energy has been dominated by large private players, with limited local ownership, minimal community benefit, and modest success in localisation. The Renewable Energy Independent Power Producer Procurement Programme (REIPPPP), while commendable in securing private investment, has not delivered the scale of transformation or job creation initially envisioned. If left unchecked, the energy transition could become yet another missed opportunity for real empowerment.
What is needed is a proactive industrial policy that directs climate-aligned investment into sectors and projects that create decent work, build local supply chains, and ensure black ownership and participation at scale.
Government has the tools to do this: policy mandates, procurement rules, blended finance instruments, and public development finance institutions can all be used to crowd in private capital while setting strong transformation conditions.
Public-private partnerships must be designed not around cost alone, but around value — economic, social, and environmental.
This is especially true in sectors like green manufacturing, transport electrification, regenerative agriculture, and circular economy industries. These sectors offer the potential to create hundreds of thousands of jobs while also reducing emissions and enhancing resilience. But they need strategic investment, skills development, and incubation support — especially for black entrepreneurs, small and medium enterprises, and township and rural-based businesses.
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At the heart of this transition lies the imperative to redefine Black Economic Empowerment (BEE). For too long, BEE has been implemented through narrow equity deals that benefit a small elite, without challenging the underlying ownership patterns of the economy.
The climate transition offers a chance to broaden and deepen empowerment.
Imagine rural communities owning shares in solar farms on communal land, or township-based enterprises producing components for electric vehicles and energy storage. These are not pipe dreams — they are achievable, if we design for them.
Emphasis is often placed on integrating black beneficiaries or designated groups in existing market structures within South Africa's finance-led Minerals-Energy-Complex (MEC). This integration mostly occurs in carbon intensive sectors that have concentrated markets. It is important to move beyond this approach and equally focus on enhancing designated groups economic participation in new or emerging sectors.
For example, strengthening targeted support interventions for black-owned manufacturers in the renewable energy and hydrogen sectors. Identify existing market entry barriers for these entrepreneurs and use both competition and policy interventions to address them.
Climate finance — both domestic and international — must be leveraged to support this new growth path. South Africa has already secured pledges through the Just Energy Transition Partnership (JETP), but these funds must be deployed in ways that support inclusive, transformative outcomes.
This means building project pipelines that reflect community needs and ownership, investing in human capital, and ensuring transparency and participation in how funds are allocated. This finance should not be based on conventional finance risk assessments that create barriers for black-owned enterprises aiming to undertake economic activities which support long-term industrial development.
It must be concessional and include grants, low-interest loans and co-investment instruments.
But finance alone is not enough. This transition requires vision, coordination, and leadership. The state must take a central role — not in crowding out the private sector, but in setting the direction, shaping markets, and ensuring that the benefits of the transition are widely shared.
Labour, civil society, and communities must be active partners in this process, not passive recipients. This is what a 'just transition' truly means — not just protecting existing jobs, but creating new, better ones; not just managing change, but using it to build a fairer society.
South Africa's NDC gives us the scaffolding to start this transformation. But scaffolding alone does not build the house. If implemented with ambition and clarity of purpose, the NDC can become the foundation for a new, inclusive economy - one that is low-carbon, high-employment, and profoundly just.
The question before us is not whether we transition — but how, and for whom.
Lebogang Mulaisi is the executive manager for policy and research at the Presidential Climate Commission. Her work focuses on labour market dynamics, industrial policy and climate justice. Dr Khwezi Mabasa is the economic and social policy lead at Friedrich Ebert Stiftung South Africa and a part-time sociology lecturer at the University of Pretoria. His work focuses on labour studies, political economy and racial capitalism.
