Sarb governor urges wealthy nations to contribute to just transition

October 23, 2023|Written by Moriah Costa|South African Reserve Bank

​​South African Reserve Bank (Sarb) governor Lesetja Kganyago criticised wealthier nations for hoarding climate change technology and urged them to share the cost of transitioning to a net-zero economy.

“A just transition requires that benefits and costs are shared more equally within countries but also amongst countries,” he said during the annual meetings of the International Monetary Fund and World Bank in September.

Wealthier countries should honour their climate commitments “not only because it is just but also because in many cases it makes economic sense”, Kganyago said.

“The planet will warm up for all of us,” he added.

Financing climate transition would reduce mitigation costs globally, Kganyago said, citing a World Bank transition cost estimate of US$447bn, which he says is 180% of South Africa’s GDP.

“In the just transition, the technology is also coming that would save the planet,” he said. “If the response is to hoard the technology in the developed world, the just transition shan’t be.”

South Africa is largely dependent on coal, accounting for about 77% of the country’s energy needs. The country signed onto a US$8.5bn just energy transition partnership in 2021 aimed to help the country transition to green energy. But the partnership has been beset with internal turmoil and disagreements over the agreement, along with opposition from politicians, coal lobby groups and labour unions.

Separately, the UN Conference on Trade and Development called for more net-zero finance capital to be channeled towards developing economies to help support the energy transition, as their needs are higher than in more developed countries.

Sarb has not implemented climate change disclosures or climate stress tests for its banks but has warned financial institutions that they will need to rethink how they handle climate risks in their frameworks. South Africa received a D- on the most recent Green Central Banking scorecard.

This page was last updated October 23, 2023

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