Green economic diversification will safeguard our transition

Accelerating the shift to a clean economy will unleash new opportunities in renewable energy, manufacturing, and infrastructure.

But what will happen to the workers, families, and communities dependent on fossil fuels as a key economic driver? How will they be protected and prepared?

Mpumalanga has for a century been economically locked into mining value chains, with local infrastructure, supply networks, and livelihoods intricately tied to the sector.

As we transition away from coal, a resource that has long powered our economy but contributed to some of the sustainability and social inequities we must minimise socioeconomic instability and usher equitable, inclusive, and transformed regional economy.  

Although the fossil fuel workforce is expected to decline, the introduction of low-carbon technologies would create manufacturing and construction jobs.

However, the local impacts of such transitions are sensitive to political, industrial, and technological factors.

No Room for delayism - we must adapt 

Economic diversification is the cornerstone of Mpumalanga’s survival and essential for ensuring economic resilience, social equity, and environmental sustainability in the midst of a full -throttle energy transition.  

The implications of this are profound: without deliberate economic diversification efforts, communities dependent on coal face further unemployment, economic decline, and poverty increase.  

To the people of Emalahleni - the place of coal, the advent of an energy transition and the uncertainty of diversification is extremely unsettling.

Such a major transformative reengineering to a decade long economic activity such as coal mining is easier said than done.

Although the challenges before us are weighty, economic diversification based on competitive advantages is non-negotiable for the success of our transition.

It provides the resilience needed to weather the socioeconomic shocks associated with transitioning from fossil fuels. 

However, economic diversification cannot happen spontaneously it requires is the political will to transcend the “eternity of coal” status-quo narrative and start identifying employment opportunities that can be realised by the private sector, focusing on both growing existing industries and introducing new ones. 

We must recognise that the energy transition is both developmental and core to the economic transformation agenda that seek to enable communities to gain access to and management of changing resources with the desire of a better South African society.

Although decarbonization brings consistent job growth, it heightens the need for investment in human capital and supply chain restructuring. Mpumalanga need to prepare for fewer mining jobs under our long-term mitigation scenarios, so other opportunities should be created or seized. 

Labour must lead the charge for upskilling and reskilling of workers

Utilizing the low-carbon transition for job growth is not new. Initially mooted in response to the impact of environmental regulations on employment, the transition goals have since broadened from creating ‘decent work and quality jobs to highlighting the importance of inclusivity and social dialogues.

Establishing new industries often requires significant investment in new infrastructure, training, and skills development, which can be costly and time-consuming.

The transition towards a low-carbon power system presents challenges and opportunities for the workforce with important implications for just transitions.

The lowest-skilled workers will experience more uncertain employment outcomes.

Expanding renewable energy could improve opportunities for women in new energy centre but not enough to disrupt the national gender status quo.

Diversification will mean little without a workforce equipped to seize new opportunities. South Africa must prioritise Comprehensive skills training programs, vocational training, and lifelong learning initiatives are crucial to preparing the workforce for the evolving and diversified economic landscape. 

As South Africa's transitions to a low carbon future, economic diversification is not merely a cushion from the side effects but rather an indispensable pillar of a net-zero economic paradigm.

Minimise reliance of international funding

The prevailing tensions in the international system and the increasing unpredictability of multilateralism, requires a new approach to international partnerships, particularly as it relates to the trade and broader economic implication of our decarbonisation efforts.  

Past global events provide insights regarding the need to own and drive the funding of climate adaptation and the ability to kickstart new economies and limit our dependence on international support and trickling commitments. First, the termination of USAID funding.

Second, our struggles when a global pandemic (COVID-19) demanded a global response. Third, the inability, at the UNFCCC to put pressure on the developed countries to provide funding for climate action.

Fourth, the shift of responsibility to fund climate action in developing countries by developed countries from public sources to private sources. 

To manage and resource such a drastic economic reform, Climate finance can unlock the capital required to build enabling infrastructure, fund enterprise support initiatives, and finance the training and reskilling of workers.

South Africa must use every platform at its disposal—including its G20 presidency—to mobilise sustainable, equitable climate finance that supports economic diversification at scale.

Zimasa Vazi is Senior Manager, Stakeholder Relations Presidential Climate Commission.

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