Creecy: We can’t rush interrogation of COP26 billions

Minister of Forestry, Fisheries and Environment Barbara Creecy.

Minister Barbara Creecy agrees that government must move with urgency in finalising the $8.5 billion climate finance deal.However, complex issues must be properly interrogated, such as whether the offer may worsen South Africa’s debt position and if it meets just transition objectives.The Presidential Climate Finance Task Team is developing a finance package and investment plan based on the offer.While Forestry, Fisheries and Environment Minister Barbara Creecy agrees that decisions on the $8.5-billion (~R137-billion) climate finance offer must be reached with urgency, proper interrogation about its potential impact must not be rushed.The minister on Tuesday was responding to questions posed by Parliament’s portfolio committee on environment forestry and fisheries. Officials from the Department of Forestry, Fisheries and Environment briefed the portfolio committee on the outcomes of COP26. They touched on the $8.5-billion offer made by international partners – the UK, US, France, Germany and EU.The international partners committed to mobilising the $8.5 billion over three to five years to help South Africa’s decarbonisation efforts. The funding is targeted at the energy sector and the development of green hydrogen and electric vehicles. Notably, the final deals that are reached must help South Africa meet its objectives of a just transition. This will ensure workers and communities dependent on the fossil fuel value chain for their livelihoods are not left to carry the burden of the transition to green technologies but can also make use of the opportunities.”We must make sure that by introducing green technology into the economy, we are not just changing technology, but we are also dealing with some of the abiding constraints of inequality, unemployment and poverty that confront our economy.”- Barbara CreecyThe Presidential Climate Finance Task Team’s head, Daniel Mminele, previously said that the team is working along with international partners to understand the details of the offer – how much of it will be grant funding, concessional finance, what the rates might be, and if it is aligned to the country’s regulatory environment. The task team will have more of this information by the time COP27 happens in Egypt in November.The task team reports to an Interministerial Committee (IMC) chaired by President Cyril Ramaphosa. When ready, the task team will present to the IMC its final recommendations concerning the financial package negotiated with partners and an investment plan for climate projects that all take into account the just transition, Mminele explained.The complexity of the matter means that decisions can’t be rushed, Creecy told members of Parliament. However, she recognised the need to move with speed, as was raised by DA member of Parliament David Bryant.Creecy could not speak to the specific timelines in place, as this lies with the Presidency. “What we all understand is that there has to be urgency about this matter,” she said.READ | Daniel Mminele: Eskom ‘integral’ to SA’s just transition solutionCreecy explained that government wants to be able to take a decision on the offer, but stressed that it must be looked at “properly”.The minister noted that there is “scepticism” about the offer – such as that it might all be loan financing which will worsen South Africa’s debt situation. She explained that these are important concerns to be “properly interrogated and properly addressed.”Creecy emphasised the importance of the offer satisfying just transition objectives.”If we are going to have green electric vehicles, what is the point of closing down the internal combustion engine car manufacturing sector in our country, throwing tens and thousands of workers into the street and then buying vehicles from a developed country? I think that the issue of speed is important, but the issue of nuances and quality of the decision is also important.”- Barbara CreecyThe minister explained the added complication is such a transaction has not been done before. She echoed views expressed by Mminele that other countries with similar coal-dependencies are watching South Africa finalise its process.Creecy explained that countries like Indonesia and Vietnam are looking at South Africa because they are interested in understanding what similar offers could mean for their economies. “They are also interested in understanding how such a complex transition can be negotiated,” Creecy said.