As South Africa responds to COVID-19 and aims to stimulate the economy and job creation post lockdown, an opportunity should not be missed to consider investing in new product markets which could increase the size and dynamism of the manufacturing sector. Such a package could contribute to arresting the trend of deindustrialisation and shift the trajectory of the industrial base into new, sustainable growth areas and value chains. This would result in new factories, new downstream demand for primary and intermediate inputs, new export products, increased foreign exchange earnings, and new direct and indirect long-term jobs.

Using the idea of “business unusual” TIPS economists put together a Post COVID-19 recovery programme that could provide the impetus to arrest the trend of deindustrialisation and herald the beginning of a new generation of industrial activity. The study comprises a main consolidated report and the seven initial projects that have been identified, including this one on Motocycle components. This project looks at the production of Class A motocycle components (only) for export to the African assembly and after-sales markets.

Download a copy or read online Project seven: Motocycle components

Main report and other projects

Main consolidated report: Industrial development projects

Project one: Borehole drilling rigs

Project two: Industrial hemp

Project three: Polylactic acid (bioplastics)

Project four: Containerised short sea shipping service

Project five: Alternative fuel

Project six: Furfural and furfuryl alcohol plant (biochemicals) 

This paper:

1. Reviews the socio-economic mandates of the major state-owned companies (SOCs) as reflected in official documents, sometimes only implicitly;
2. Provides case studies of four leading SOCs in terms of their socio-economic and financial mandates over the past decade or so; and
3. The actual and potential impact of the COVID-19 pandemic on the four case studies.

The study reviews the SOC and development finance institute landscape in terms of the functions and size of the various entities. It then looks in more detail at Eskom, SANRAL, Transnet and Denel.

It concludes with a discussion of some common shortcomings identified in the analysis of the four SOCs.

Engineering News - 14 December 2021 by Schalk Burger

Read online at Engineering News

Business Day - 13 December 2021 by Neva Makgetla (TIPS Senior Economist)

Read online at Business Day

Or read as a PDF

Daily Maverick - 12 December 2021 by Ethan van Diemen

SUMMARY: Finance is essential to implement effective climate action. A just transition requires transition finance as a component of finance for climate action - to protect the adequacy of energy supply and to mitigate negative economic, employment and social impacts during transition - supporting both an accelerated phasing-out of coal and development that sustains livelihoods in affected regions like Mpumalanga. The paper aims to contribute to better understanding of ways to quantity of international and domestic finance for climate action and shift the direction of investment in South Africa. The scope of the paper has South Africa as its geographical focus. It examines finance flows at the national scale and considers international dimensions only where relevant to the country. The scope in relation to policy is broad, it considers government policy instruments across national departments and local government, a finance and fiscal tool-kit, the governance and institutional landscape that enable and direct finance flows, and policies that can guide investments in development of human and institutional capacity.

KEY FINDINGS / RECOMMENDATIONS: The paper reports that government has adopted a definition of sustainable finance, and is working on a Green Finance Taxonomy for South Africa and climate budget tagging. In assessing initial bottom-up estimates of finance needs for both mitigation and adaptation, the paper finds that the overall cumulative investment requirement for mitigation ranges from R460-760 billion. It suggests several possible ways to increase the quantity of international and domestic finance for climate action and shift the direction of flows in South Africa. The government needs to engage more proactively with international climate finance providers to scale up adaptation finance. Aligning policy is critical to avoid incoherence. Greater co-ordination, clear policy signals - for both adaption and mitigation should be sent. Possible options for coordination have been described - horizontally across different constituencies, and also across line-functions in national government, as well as vertically, across spheres of government.

SUMMARY: The article discusses the need for developing countries to chart their own course to net-zero emissions. Net-zero targets are the most recent attempt by countries to avoid the 2°C or 1.5°C increase in global temperatures and avoid a climate change crisis. A blanket approach to net-zero targets is not advised as developing counties have yet to reach their peak emissions and have less emissions per capita. Emissions reductions could also take longer in developing countries as they have other overriding challenges such as poverty and inequality. For the world to reach carbon neutrality in 2050, developed countries have to reach net zero carbon emissions earlier.

KEY FINDINGS / RECOMMENDATIONS: Net zero targets are a powerful way to signal a common cause between nations. Retaining the sense of solidarity will require that these targets be consistent with demands for climate justice and national contexts. This approach to net-zero makes for smarter policies and increase the changes of real actions. Instead of a single net zero transition, there must be space for multiple transitions, consistent with climate justice and tailored to different national contexts.

Read online: https://theconversation.com/developing-countries-need-to-chart-their-own-course-to-net-zero-emissions-159655

SUMMARY: The article discusses how net-zero emissions targets are vague and provides three ways to fix this. The details behind net-zero targets differ: some outline the reductions in CO2 emissions while negating other GHG emissions while others focus on direct emissions as opposed to supply chain emissions. Clarity on net-zero targets is essential because without more clarity, strategies behind net-zero targets cannot be understood; nor can their impact be evaluated. The article outlines three aspects which nations, companies and researchers need to clarify, these are their scope (which emissions sources and gases are covered); how they are deemed adequate and fair; and concrete road maps (which includes milestones an implementation plan and strategy to achieve and maintain targets) towards and beyond net-zero.

KEY FINDINGS: The article outlines a check list for rigours and clear net-zero plans:
Scope: What global temperature goal does this plan contribute to (to stabilise global temperature, or see it peak and decline)?; What is the target date for net zero?; Which greenhouse gases are considered?; How are greenhouse gases aggregated (GWP-100 or another metric)?; What is the extent of the emissions (over which territories, time frames or activities)?; What are the relative contributions of reductions, removals and offsets?; How will risks be managed around removals and offsets?
Fairness: What principles are being applied?; Would the global climate goal be achieved if everyone did this?; What are the consequences for others if these principles are applied universally?; How will your target affect others' capacity to achieve net zero, and their pursuit of other Sustainable Development Goals?
Roadmap: What milestones and policies will support achievement?; What monitoring and review system will be used to assess progress and revise the target?; Will net zero be maintained, or is it a step towards net negative?

SUMMARY: The study discusses the just transition transaction (JTT). The JTT mobilises blended finance to fund the accelerated phase out of coal, thereby accelerating a transition from coal to renewable energy.  The study seeks to understand the JTT, its architecture and potential to catalyse changes in the complex set of challenges facing South Africa’s electricity sector. The purpose of the study is to understand the potential of a JTT to accelerate the phase out of coal-fired power and to fund development projects. The scope of the case study is national. Its focus is on mitigation and the contribution that a just transition transaction can make in South Africa’s electricity sector. The study outlines the political economy of South Africa, details on national power producer Eskom, the relevant policies on climate and development, and the electricity sector specifically.

KEY FINDINGS / RECOMMENDATIONS: The study found that community ownership is crucial for the buy-in for renewable energy, with two types being community-owned, small-scale embedded generation and community-owned mini-grid.  Significant institutional innovation is needed to integrate community ownership with Eskom, which has had a monopoly on electricity supply. Further research should focus on Mpumalanga where community ownership models are piloted, and these will require a bottom-up, community- and locally-driven process. They also point to the need to co-develop a funding strategy with local communities, workers and municipalities, which could provide guidance of the JT Fund’s spending on development projects.