Developing countries have been saying for years at global climate conferences that they need more financial help from wealthier countries to speed up their transition away from the use of coal.
Now, the world is going to witness a dramatic demonstration of how it could operate in practice.
South Africa announced on Tuesday at the Glasgow climate summit that it had secured $8.5 billion in funding over the next five years from the United Kingdom, France, Germany, the United States, and the European Union to help install more clean energy, speed up the country’s transition away from coal, and cushion the blow for workers who may be affected by the transition.
Jesse Burton, an energy policy expert and senior associate at the University of Cape Town and E3G, a climate change research center, stated, “This is a major thing.”
“It will be a major test of whether wealthier countries can assist underdeveloped countries in making a fair transition away from coal.”
South Africa, the world’s 15th largest emitter, relies on coal, accounting for 87 percent of the country’s electrical generation. So while the UK has committed to reducing carbon dioxide emissions between now and 2030 as part of global efforts to combat climate change, it confronts significant challenges.
Eskom, South Africa’s state-owned utility, is drowning in debt due to investments in coal facilities. As a result, the company has struggled to produce reliable power, resorting to rolling blackouts to fulfill demand.
According to analysts, South Africa will most likely need to speed up the retirement of existing coal plants while installing huge amounts of renewable energy generation and transmission lines to fulfill growing demand if it meets its most ambitious climate objectives by 2030.
The try is made more difficult because the country’s frail economy is still reliant on coal jobs, with over 120,000 people employed in power plants and mines. Moreover, previous debates about when and how to transition away from coal have been divisive.
On Tuesday, South African President Cyril Ramaphosa said that the $8.5 billion in loans and grants pledged by wealthy countries could help the country smooth the transition by accelerating renewable energy investment and ensuring that Eskom has access to resources to repurpose old coal plants set to retire over the next 15 years.
The country will also look into measures to retrain former coal miners for new jobs.
Mr. Ramaphosa stated, “It is proof that we can take aggressive climate action while boosting our energy security, creating jobs, and tapping new investment opportunities with backing from developed economies.”
There are still a lot of unanswered issues of how cooperation will work in practice. For example, how much new clean energy will be built and how much coal will be phased out are still being worked out.
Analysts are also concerned about whether donor countries will follow through on their promises if the monies are spent and whether they would help local populations.
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