15.11.2022

Multilevel action: Implementing the Glasgow Climate Pact to keep 1.5°C alive

On Adaptation & Agriculture Day at COP27, the UK COP26 Presidency’s official Side Event was co-hosted with Climate Group, who are the Secretariat of the Under2 Coalition. 

We convened a discussion about the ways in which multilevel action can drive the ‘ambition loop’ to keep 1.5°C in reach and deliver on the Glasgow Climate Pact.

COP26 President Opening Speech

COP26 President Alok Sharma opened the event, and paid testament to the power of the ‘ambition loop’: a ‘virtuous circle’ where multilevel actors from business, government and civil society drive climate action and in doing so push each other to go further, faster.  

He paid tribute to the role of civil society and youth, and the work of the High-Level Champions, saying that the Glasgow Climate Pact was “a testament to what is possible when all of us work together with one ambition”. 

The COP26 President also made clear that while progress has been made in the acceleration of renewables – despite a challenging geopolitical context – recent and severe droughts in China, the US and Europe were a reminder of the need to act now at both government and corporate levels to keep 1.5°C in reach.

First panel: The ambition loop in action

The first panel, moderated by Helen Clarkson, CEO of Climate Group, showcased the ambition loop in action across the world through its four high-level panellists: 

  • Faustin Munyazikwiye, Rwanda’s Chief Negotiator and Deputy Director General of the Rwanda Environment Management Authority; 
  • Eduardo Trani, Undersecretary for the Environment, São Paulo State; 
  • Secretary Karen Ross, Secretary for Food and Agriculture, California;
  • Prabodha Acharya, Chief Sustainability Officer, JSW Group.

Each panellist highlighted the importance of bringing together subnational actors around a shared agenda, along with civil society and private sector organisations, to develop inclusive and equitable solutions to reducing emissions. Eduardo Trani from Sao Paulo highlighted their newly launched Climate Action Plan 2050, which was open for consultation from civil society to identify 1.5-aligned actions for the Municipality of São Paulo. 

Secretary Ross and Faustin Munyazikwiye both spoke about the value of financial incentives and quality investments to drive action at an industry level. In California, for example, the state government has successfully supported its dairy industry with ‘dairy digester’ projects to capture methane emissions and convert them into renewable energy. This is part of an overall aim to reduce methane emissions – a short-lived but potent greenhouse gas – 40% by 2030 compared to 1990 levels. Meanwhile Rwanda has established fiscal incentives for zero-emission vehicles and has recently launched Ireme Invest: a new green finance facility to drive quality green investments.

Prabodha Acharya of JSW Group was emphatic about the need to act ‘here and now’ to reduce emissions in hard-to-abate sectors such as steel and concrete. This requires businesses to move away from a focus on short-term gains and expand their horizons to longer term planning. Such a culture change will demand considerable commitment from company leadership but will reap long term rewards for both profits and the climate. 

Second panel: Role of data in raising awareness & driving accountability

The second panel, chaired by Lekha Sridhar of ClimateTRACE, explored the role of data in raising awareness of climate issues and driving accountability. It consisted of:

  • Amaia Barredo, Deputy Minister for Economic Development, Government of the Basque Country; 
  • Samanta Della Bella, Sustainability and Climate Superintendent, Government of Pernambuco; 
  • Sassan Saatchi, PhD, CTrees Founder and NASA research scientist.

Despite a number of challenges with data accessibility and deployability, particularly for monitoring emissions, the panel agreed that continuing technological advances are already helping to drive progress. 

They cited the Under2 Coalition’s ongoing States and Regions Remote Sensing project (STARRS), which is working with governments to identify highly-polluting sectors with a view to then reducing their emissions. Dr Saatchi highlighted the broader use of data in monitoring wildfires, deforestation and land degradation, and was optimistic about the evolution and increasing accessibility of the technology in this field.  

Overall, the panel was clear that by expanding access to data, and making emissions tracking integral to the way multilevel actors assess and act upon damaging emissions, we can scale the use of specific technologies to raise, and implement, climate action. 

Without measuring emissions it is not possible to mitigate them.

Conclusion

Helen Clarkson closed the event with a final word on the importance of COP27 demonstrating progress on last year. Although impressive commitments were made, it is now time to show meaningful progress – particularly in terms of using the Glasgow Climate Pact as a blueprint for real action in reducing emissions and accelerating the move to renewables. 

Together, both panels were testament to the ambitious action being driven across different levels of government and industry around the world, and the growing opportunities that lie ahead for those who act now. 

As Alok Sharma, COP26 President, said: ‘We all need to be part of this solution and, if we are, we will get there’.

15.11.2022

UK COP26 Presidency Calls for Implementation at COP27 Energy Day

1.5C can only be kept within reach with the rapid transformation of the global electricity system from coal power to clean renewable energy. Making clean power the most affordable and reliable option for countries to meet their power needs efficiently is crucial to ensuring energy security and accelerating the clean energy transition.

At COP26 major steps were made towards consigning coal to history

One year ago at COP26, all countries came together and signalled the world is moving towards a renewable future by agreeing to phase down coal in the Glasgow Climate Pact, with 65 countries committed to phase out coal entirely. In 2021, growth of the renewable energy market was nearly 40% higher than forecast, putting wind and solar on track to match global gas capacity by 2022.

The UK’s COP26 Presidency has brought countries together to deliver tangible commitments, progress, and actions to consign coal to history, shifting international public support out of fossil fuels and into clean energy through the Clean Energy Transition Partnership, and strengthening the renewable power investment and assistance offer including spotlighting a just transition.

As part of this continuing effort, the UK joined other member countries at the G20 today in announcing the Indonesia Just Energy Transition Partnership (JETP), a country-led initiative that will help Indonesia pursue an accelerated just energy transition away from fossil fuels and towards renewable sources.

The JETP model was pioneered at the COP26 Summit in Glasgow last year, where South Africa and an International Partners Group (IPG) of France, Germany, the United Kingdom, the United States of America and the European Union announced a ground-breaking long-term $8.5bn JETP, setting a new precedent in the global just energy transition.

Indonesia is the second country to launch a JETP. Among the world’s ten largest greenhouse gas emitters, Indonesia is now accelerating its transition to clean energy through the JETP’s strengthened commitment to maximise the use of abundant renewable energy resources and a strong political commitment to phase down coal-fired power in the medium-term.

UK COP26 Presidency at Energy Day, COP27

As the world meets in Sharm El-Sheikh ahead of a difficult winter and major pressures on global energy security driven by Russia’s illegal invasion of Ukraine, the fundamental issue of climate change must remain a top priority for all countries. The cost of renewables continues to fall. The coal pipeline continues to collapse. Finance is being directed towards clean energy. It is clear that energy security and climate security are inextricably linked and the illegal invasion of Ukraine is only a reason to move faster. Diversifying our energy supplies by investing in renewables and accelerating the shift to clean energy is economically right – creating jobs and growth – and is the most effective way to ensure energy security, and avoid the risk of future energy dependency.

On Energy Day at COP27 countries and organisations from across the world are illustrating how they have put their promises into practice. The UK COP26 Presidency is holding a number of events bringing together countries, development banks, investors and civil society to:

  • demonstrate how clean energy is the most attractive option of new power generation for any country;
  • strengthen the clean power investment and assistance offer; and
  • highlight the progress made across the globe to accelerate the energy transition and share best practice.

The energy crisis and the global situation since COP26 demonstrates that the rapid acceleration of renewable energy is not only essential to protecting our planet, but critical to the security of our energy supply and our economies. Countries and partners have continued to answer the call.

Speeding up implementation

COP27 is a time to prioritise implementation. In the past year, commitments have turned into policies, finance is flowing and renewable projects are being produced at a rate never seen before.

Shifting to clean energy and ending our reliance on fossil fuels requires a concerted and sustained policy and delivery effort across multiple sectors, alongside international dialogue on energy markets that draws on strong multilateral support. 

Members of the Energy Transition Council demonstrated ongoing progress in transitioning to clean energy through ministerial, national and local-level dialogues which seek to mobilise finance and assistance. The Council is also responding to 27 technical assistance projects through its Rapid Response Facility across nine ETC partner countries, including Morocco, Kenya, Philippines and Bangladesh.

At COP26, 39 signatories committed to shift international public support into the clean energy transition and out of the fossil fuel energy sector. This initiative has the potential to shift $28bn a year into the clean energy transition. 

The G7 reaffirmed their commitment to this initiative in June 2022. Since Glasgow, the US, France, the Netherlands alongside four additional countries, have enshrined their commitment into policy guidelines, with more expected by the end of 2022. Many of these policies include new products and measures to scale up support for renewable energy. UK Export Finance, for example, has transformed the way it does business to seize opportunities in the clean growth sector, building a pipeline valued up $7.5bn into 2024.  

This is an historic step and sends a clear signal for private investors to follow. This also represents a continued turning point on climate action. Following historical progress on ending international coal finance, prioritising international support for the clean energy transition and out of fossil fuels is now becoming the new norm.

On methane, the UK has adopted early and ambitious measures to tackle emissions. Between 1990 and 2020, UK methane emissions dropped by 62%, more than any other OECD country. The UK Government recognises the urgency to do more, and today publishes its methane memorandum as part of its commitment to the Global Methane Pledge launched at COP26. This Memorandum outlines how the UK has achieved world-leading reductions in methane emissions and will continue to explore and implement measures to secure further progress.At COP27, the UK joined other energy exporters and importers in supporting a joint declaration to reduce GHG emissions from fossil fuels.

The UK and partners marked one year since the launch of the Green Grids Initiative – One Sun One World One Grid (GGI-OSOWOG), to tackle the challenge of absorbing ever larger shares of variable renewable energy, while also meeting our rapidly growing global power needs securely, affordably, and reliably. The programme has developed an ecosystem of key partners, including governments, financiers, regulators, and the private sector, to accelerate green grid projects globally. 

Working with regional partners, the GGI-OSOWOG has established taskforces to accelerate development of key energy interconnection corridors in Southern Africa, create a toolkit to support energy trading and interconnectivity projects, such as the ASEAN Power Grid, and developed a knowledge sharing platform for Small Island Developing States to address the specific grid challenges. GGI Partners also launched a Working Paper on mobilising climate finance for grids, including initial findings from OSeMOSYS Global; a free global energy systems modelling tool to quickly identify least-cost pathways to decarbonise.

To make this transition a reality, the UK, alongside 46 countries representing over 70% of global GDP, launched the Breakthrough Agenda at the World Leaders Summit. Within the Breakthrough Agenda, the Power Breakthrough is working to strengthen international collaboration in specific areas where in doing so we can accelerate progress this decade towards decarbonising the global power system.  

Part of solving the energy transformation involves reducing demand and increasing the efficiency of how we use our energy. Since the launch of the UK-IEA Call to Action on Product Efficiency, which is being delivered through the Super-Efficiency Equipment and Appliance Deployment Initiative (SEAD), new members joining include Turkey, Panama and EBRD as an institutional member. Together these countries will work with the IEA to decarbonise their power systems through enhanced product efficiency. 

To fully realise this, the UK and IEA established a joint Call to Action on Product Efficiency. Endorsed by 14 countries, these governments will work with the IEA to double the efficiency of four key appliances (which together represent over 40% of global electricity consumption) by 2030, significantly lowering associated emissions from the fall in energy demand.   

There continues to be a firm sign that coal has been consigned to history. The Powering Past Coal Alliance has established a broad coalition with 168 members in total who share experience and best practice through its first global report. It is also engaging with emerging economies, including through a partnership with the South East Asia Energy Transition Partnership.

The PPCA will also launch revised private finance principles in Q1 2023, translating the coal phase out mission of the PPCA into state-of-the-art commitments for financial institutions to tackle private sector coal finance. More than $17 trillion USD assets under management is now committed via PPCA membership to phasing out coal.

Through the UN No New Coal Compact, countries continue to embark on setting the direction of their clean energy transition and have also demonstrated why there is no viable future for coal production as renewable energy continues to expand on a global scale. 

Events hosted by the UK COP26 Presidency on Energy Day at COP27 include:

Full programme here. The UK pavilion is located in Zone B, delegation section 8

  • Putting Promises into Practice: Accelerating the Clean Energy Transition: 09:00-10:30 EET in the Blue Zone, Climate Action Zone, Action Room 2 (Lotus), COP27.
  • Enabling a Just Energy Transition in Africa through Partnerships: 12:00 pm – 12:45 pm EET (UK Pavilion) 
  • Bridging the gap from fossil fuels to clean energy: 1:15 pm – 2:15 pm EET (UK Pavilion) 
  • Consigning Coal to History: 2:30 pm – 3:15 pm EET (UK Pavilion) 
  • The Energy Transition Council’s RRF: A Rapid Response Facility for delivering technical assistance in the power sector: 3:45 pm – 4:45 pm EET (UK Pavilion) 
  • Green Grids Initiative: Enabling grids to deliver the energy transition: Between 5:00 pm – 5:45 pm EET (UK Pavilion) 

12.11.2022

Implementing adaptation action: making progress to deal with climate impacts

Today, the world has warmed more than 1°C since pre-industrial times. It is no longer enough to stop further climate change: adapting and building community and ecosystem resilience to safeguard lives and livelihoods is necessary

At COP26, adaptation was made a universal agenda with the establishment of the Glasgow-Sharm el-Sheikh work programme on the Global Goal on Adaptation (GlaSS). Loss and Damage was also given more precedence than ever before, with the establishment of the Glasgow Dialogue to discuss funding arrangements to avert, minimise and address loss and damage. 

COP27 provides an opportunity to show those most affected by climate impacts that the international community is prepared to build solutions and prioritise action on adaptation. On Adaptation and Agriculture day, the UK and Partners delivered a number of events during which countries and organisations highlighted progress made on adaptation planning, locally-led adaptation, early warning, and action-oriented research. 

This follows announcements during the World Leaders Summit to triple the UK’s International Climate Finance to adaptation, commit £5 million funding to the Santiago Network to deliver technical assistance for loss and damage; and deliver funding to the Green Climate Fund and Adaptation Fund as pledged at COP26. 

The UK is investing over £13 million new funding to support vulnerable countries to adapt to climate impacts, and towards efforts to avert, minimise and address loss and damage. These will build on the more than £500 million of new funding for adaptation announced at COP26. 

Adaptation planning 

Effective implementation of country priorities identified in National Adaptation Plans (NAPs) helps to build resilience to climate impacts from local to national levels. 86 countries are now covered by Adaptation Communications (AdComms) or National Adaptation Plans (NAPs), with 65 published since the start of the UK’s incoming COP26 Presidency.

At COP27 we heard examples of developing countries’ NAP processes, including Eswatini, Liberia, St Lucia, Zimbabwe, with an emphasis on implementation of priorities, reporting progress and effective and inclusive planning. 

Accelerating adaptation action

Effective adaptation action requires cooperation across scales and sectors. Building on the UK and Egypt’s co-leadership of the Adaptation Action Coalition (AAC), this event focused on how countries can transition from adaptation planning to implementation. The AAC now has 39 country members working together to drive solutions through work-streams on locally-led adaptation (LLA), health, water, infrastructure and disaster-risk reduction.

The AAC’s sectoral workstreams are assisting countries to speed up and scale up implementation of national and local-level priorities outlined in National Adaptation Plans, NDCs and other relevant strategies. Sector-specific adaptation actions can be linked together to form a more cohesive approach that goes beyond project-based implementation.

The UK is also supporting the UN High Level Champions Race to Resilience, with £3m new funding, to catalyse a step-change in non-state actors’ ambition for climate resilience. The UK welcomes the collaboration between the COP27 Presidency and the Race to Resilience on the launch of the ‘Sharm-El-Sheikh Adaptation Agenda’ which outlines 30 adaptation outcomes to enhance resilience for 4 billion people living in the most climate vulnerable communities by 2030. 

Delivering at the frontline through locally-led adaptation

With over 100 endorsements to the Principles to LLA, locally-led adaptation is gaining increasing recognition around the world as an effective approach for ensuring that the most vulnerable people and communities are protected from the impacts of climate change. 

The UK highlighted renewed commitment to the Least Developed Countries Initiative for Effective Adaptation and Resilience (LIFE-AR) and £45 million funding for the Asian Development Bank’s Community Resilience Partnership Program (CRPP), which was announced at COP26.

New country endorsements to the Principles for LLA include Uganda, Fiji, South Africa, Antigua & Barbuda, Norway, Finland, with many organisations also joining. The task now is to translate these principles into tangible action and scale up support for LLA across different levels of governance. 

Private sector mobilisation and climate resilient investment 

The Adaptation & Resilience Investors Collaborative (ARIC) is a partnership of development finance institutions working to address systemic barriers to mobilising private investment in adaptation and resilience. ARIC announced today that UNEP-FI will act as the Secretariat of the initiative, enabling ARIC to further implement its action plan. 

The Coalition for Climate Resilient Investment (CCRI) is a private-sector led initiative that is developing and piloting tools to direct investment where it is most needed in national infrastructure networks, and to help improve the integration of physical climate risks into investment appraisal. CCRI has over 129 members with over $27 trillion in assets under management. Today the UK announced a further £1.3m of funding for CCRI, in addition to the £1m we have already provided. 

Today’s CCRI session heard from governments, leading institutions and individuals representing investors in key industries and sectors in a discussion about the transformational potential of practical solutions, such as the Jamaica Strategic Risk Assessment Tool (J-SRAT) and the Physical Climate Risk Assessment Methodology (PCRAM), at both national and investment levels, redefining the narrative and practice around private investment in climate resilient investment.

Action-oriented research

Action-oriented research is key in informing effective adaptation to reduce the risks from climate change. The Adaptation Research Alliance now has 157 members – bringing together funders, academics, civil society, International Organisations – from 52 countries. 

Progress since COP26 includes the launch of a ‘Co-creation Space’ to scope new programmes, and a second round of grassroots action–research grants for local organisations in the global South. Announcements at COP27 included:

  • The Bill and Melinda Gates Foundation’s Agriculture Development programme is working with the ARA Secretariat to develop a co-creation process focused on smallholder agriculture.
  • UK Research and Innovation – Natural Environment Research Council (UKRI-NERC), in partnership with the Foreign, Commonwealth and Development Office (FCDO) and the ARA, are scoping the design of a potential new international collaborative research programme focused on ‘nature-based solutions for equitable climate resilience’. 
  • The UN Development Programme (UNDP) and the Least Developed Universities Climate Change Consortium (LUCCC) are working with ARA to enable LDC Universities to support national adaptation plans, in areas such as assessments, implementation and reporting.
  • The ARA and members will collaborate to catalyse a comprehensive co-creation process aimed at new programme development on urban resilience in partnership with initiatives such as The Roof Over Our Heads initiative (ROOH). ROOH is aimed at delivering sustainable habitats for low-income urban residents in the global South.
  • The ARA launched the second round of Grassroots Action Research Micro-grants, a series of grants each totalling GBP £15,000 that support locally led adaptation by targeting action and research entities collaborating to unearth knowledge, ideas, and opportunities for climate change adaptation in the Global South.

Anticipating crises and taking Early Action

Early and anticipatory action helps to protect people from the impacts of extreme weather events. We need to see ideas for delivering and scaling-up more cohesive action between development, humanitarian, and climate leaders to reduce the disaster and climate risk of vulnerable populations. 

At COP27, the UK focussed on catalysing more cohesive action between development, humanitarian, and climate leaders by discussing the co-benefits of smarter investments in anticipatory action, resilience and adaptation, and explored ways to crowd-in sufficient and appropriate financial flows, including climate finance, to reduce the disaster and climate risk of vulnerable populations living in fragile and conflict affected settings.

The UK has committed £4m for Climate Risk Management including the Risk-Informed Early Action Partnership (REAP) to bring together the climate, humanitarian, and development communities to increase action to prevent or reduce the impacts of climate change, making a billion people safer from disasters.

11.11.2022

The Breakthrough Agenda

The Breakthrough Agenda was launched at COP26 by a coalition of 45 world leaders, whose governments collectively represent over 70% of global GDP. It is an unprecedented international clean technology plan to help keep 1.5°C in reach. It provides a framework for countries, businesses and civil society to join up and strengthen their actions every year in key emitting sectors, through a coalition of leading public, private and public-private global initiatives.

Leaders agreed at COP26 to review progress annually and explore priority international actions needed to accelerate towards the Breakthroughs informed by an annual independent expert report from the International Energy Agency (IEA), International Renewable Energy Agency (IRENA) and UN High Level Champions.

The inaugural Breakthrough Agenda Report 2022 was published in September, warning that an “international collaboration gap” threatens to delay net zero by decades. The authors made recommendations to strengthen collaboration between governments, business and civil society in areas such as common standards, technology R&D, trade, and improving technical and financial assistance.

The Breakthrough Agenda at COP27

At COP27, countries responded to these recommendations with a package of 28 Priority Actions to decarbonise the power, road transport, steel, hydrogen, and agriculture sectors, in line with the goals of the Paris Agreement.

We welcome countries to contact Breakthrough.Agenda@beis.gov.uk if they are interested in endorsing the Breakthrough Agenda and supporting any of the Priority Actions under the Breakthrough Agenda sectoral goals.

Power Breakthrough

To make clean power the most affordable and reliable option for all countries to meet their power needs efficiently by 2030. Full details of the priority actions and what will be delivered before COP28 are here.

Countries supporting at least one of the Power Breakthrough Priority Actions: Australia, Azerbaijan, Cambodia, Canada, European Commission, Finland, France, Germany, Ireland, Italy, Japan, Kenya, Morocco, Netherlands, Norway, Panama, Spain, Sweden, United Kingdom, United States of America

Road Transport Breakthrough

To make zero-emission vehicles the new normal by making them accessible, affordable, and sustainable in all regions.

Full details of the priority actions and what will be delivered before COP28 are here.

Countries supporting at least one of the Road Transport Priority Actions: Australia, Azerbaijan, Cambodia, Canada, European Commission, Finland, France, Germany, Guinea-Bissau, India, Ireland, Japan, Lithuania, Netherlands, New Zealand, Norway, Panama, Republic of Korea, Sweden, United Kingdom

Steel Breakthrough

To make near-zero emission steel the preferred choice in global markets, with efficient use and near-zero emission steel production established and growing in every region by 2030.

Full details of the priority actions and what will be delivered before COP28 are here.

Countries supporting at least one of the Steel Priority Actions: Australia, Austria, Azerbaijan, Canada, European Commission, Finland, France, Germany, Guinea Bissau, Ireland, Japan, Morocco, Spain, Sweden, Türkiye, United Kingdom, United States of America

Hydrogen Breakthrough

To make affordable renewable and low carbon hydrogen globally available by 2030.

Full details of the priority actions and what will be delivered before COP28 are here.

Countries supporting at least one of the Hydrogen Priority Actions: Australia, Azerbaijan, Cambodia, Canada, European Commission, Finland, France, Germany, Guinea Bissau, Ireland, Italy, Japan, Kenya, Netherlands, Norway, Panama, Spain, Sweden, United Arab Emirates, United Kingdom, United States of America

Agriculture Breakthrough

To make climate-resilient, sustainable agriculture the most attractive and widely adopted option for farmers everywhere by 2030.

Countries that have endorsed the Agriculture Breakthrough goal: Australia, Belgium, Cambodia, Denmark, Egypt, Germany, Ireland, Japan, Latvia, Morocco, Nigeria, Sweden, United Kingdom

Full details of the priority actions and what will be delivered before COP28 are here.

Countries supporting at least one of the Agriculture Priority Actions: Cambodia, Germany, Ireland, Japan, Latvia, Morocco, Nigeria, Sweden, United Kingdom

Breakthrough Agenda Signatories

As of 11 November 2022, the following countries have endorsed the Breakthrough Agenda: Australia; Austria; Azerbaijan; Belgium; Cabo Verde; Cambodia; Canada; Chile; China; Denmark; Egypt; European Commission; Finland; France; Germany; Guinea Bissau; Holy See; India; Ireland; Israel; Italy; Japan; Kenya; Latvia; Lithuania; Luxembourg; Malta; Mauritania; Morocco; Namibia; Netherlands; New Zealand; Nigeria; North Macedonia; Norway; Panama; Portugal; Republic of Korea; Senegal; Serbia; Slovakia; Spain; Sweden; Türkiye; United Arab Emirates; United Kingdom; United States of America.


Links to documents

The Prime Minister Rishi Sunak meets with leaders from other members of Just Energy Transition Partnership on the first day of COP27.

10.11.2022

12-Month Update on Progress in Advancing the Just Energy Transition Partnership (JETP)

Introduction

At the UNFCCC COP26 in November 2021, the governments of South Africa and France, Germany, the United Kingdom, the United States of America, and the European Union (the International Partners Group – IPG) announced a new ambitious, long-term Just Energy Transition Partnership (JETP). The JETP supports the Republic of South Africa’s (RSA) commitment, in the context of its domestic climate policy, to decarbonise its energy intensive economy and transition to cleaner energy sources and, in doing so, achieve the best possible outcome within its stated Nationally Determined Contribution (NDC) range. A critical distinguishing feature of the JETP is its emphasis on the centrality of a just transition in the structuring of the Just Energy Transition Investment Plan (JET IP), its financing and implementation.

In line with the Political Declaration issued in November 2021, the IPG undertook to mobilise an initial amount of $8.5 billion over the next 3-5 years to advance the JETP. It was determined that the partners would within six months and twelve months provide a progress update to leaders.  This update records progress since the six-month Leaders Update, which is annexed hereto. 

The key milestone achieved during the last six months was the development of the JET IP by South Africa with the following key features:

  • It has been developed through a country-led and country-owned process building on national knowledge base from public and private sector, civil society, academia and trade union inputs.
  • It is rooted in South Africa’s plans and processes around decarbonisation and gives expression to these long-standing plans through the lens of three priority sectors, and a proposed portfolio of investments and other interventions. 
  • It is complementary to, and not separate from South Africa’s broader long term development agenda, aimed at tackling unemployment, inequality and poverty, and thus be in support of economic growth and job creation efforts.
  • It is focused on “justice” in South Africa and the financing needs to recognise the social costs associated with achieving the updated NDC targets, and the broader climate response. In this context, the just transition aims to improve the quality of livelihoods, particularly those directly impacted by the transition, and ensure shared benefits, risks, and responsibilities from the transition.

The JETP Secretariat, under guidance of the Presidential Climate Finance Task Team (PCFTT), and IPG, developed the JET IP, which was endorsed by the Government of South Africa and the governments of the IPG in October 2022.

The Just Energy Transition Investment Plan

The JET IP was developed over the course of 2022, in a dynamic context along with several supportive policies and processes being launched, including the Just Transition Framework adopted by Cabinet in August 2022 and far-reaching energy sector reforms that are unlocking investment in renewable energy. The JET IP was developed through a country-owned, country-led engagement process, which drew on South Africa’s extensive knowledge base amongst policymakers, academia, civil society, and business. This was complemented by engagements with technical working groups and stakeholder discussions with youth, labour, business, civil society, local government, and faith-based organisations. The South African government has undertaken to maintain an open dialogue with the stakeholders to enhance the efficacy and impact of the JET IP, especially during the implementation phases ahead.  

The JET IP supports the goals of energy security, just transition and economic growth, in terms of clarifying its priority investment requirements over the next five years in the electricity, new energy vehicles (NEVs), and green hydrogen (GH2) sectors. Just transition initiatives (particularly arising from the electricity sector transition in Mpumalanga) are elaborated within these sectors, and two cross-cutting priorities have been identified for skills development and municipal capacity as key components of the JET IP. 

The JET IP articulates the need for R1,48 trillion (USD 98 billion) investment in the three priority sectors categorised into infrastructure, planning, skills, economic diversification, social, and monitoring investments over a period of 5 years. The JET IP is not exhaustive of all the transition needs in South Africa. It sets out the guiding principles for implementation, considering the Just Transition Framework.

Recent policy developments 

South Africa has an ongoing process of electricity sector reforms to ensure long term energy security in the context of developing a clean, inclusive and sustainable energy system. More recently, the President of South Africa announced several urgent interventions to address its electricity supply crises towards attaining energy security. These interventions support the implementation of the Just Energy Transition Investment Plan. These reforms include accelerated procurement of new generation capacity, enablement for a large increase in private investment in generation capacity, enablement for business and households to invest in rooftop solar, and further steps in the transformation of the electricity sector. In particular, the President announced that: 

  • The licensing thresholds for embedded generation are removed completely, enabling private investment in large, utility-scale generation projects. 
  • Bid Window 6 for wind and solar power will be doubled from 2 600 MW to 5 200 MW. 
  • Further requests for proposals will be issued for battery storage and gas power generation. 
  • The IRP is to be reviewed to reflect the need for additional generation capacity and South Africa’s climate commitments. 
  • Special legislation is being developed and expedited to address legal and regulatory obstacles to new generation capacity, and regulations are being streamlined or waived where possible, including for solar projects in areas of low and medium environmental sensitivity. 
  • Environmental authorisations have been waived for the development of new transmission and distribution lines and substations in areas of low and medium sensitivity and within strategic electricity corridors. 
  • A pragmatic approach will be taken to local content requirements for near-term renewable energy investments, with the designated local content for solar panels reduced from 100% to 35% for Bid Window 5. 
  • There will be incentives for rooftop solar, Eskom will develop feed-in tariffs for the purchase of surplus electricity from residential customers. National Treasury is undertaking further work on tax incentives for investment in small-scale embedded generation. 
  • A law-enforcement team is working with Eskom to address crime and corruption. 
  • Eskom restructuring into three entities will be enhanced with the appointment of boards for the transmission and generation entities. The transmission grid will remain state-owned. 
  • The Minister of Finance outlined a sustainable solution to the Eskom debt in the Medium-term Budget Policy Statement in October 2022. 
  • Government will use climate funding provided through the JETP to invest in the transmission grid and repurpose coal power plants that have reached end of life.
  • Eskom to recruit engineers and experts, including former employees, to ensure it has the required skills to rehabilitate its fleet of power stations.
  • Information will be shared with private investors to guide their investment in the national grid.
  • The establishment of a new National Energy Crisis Council (NECC), to be chaired by the Director-General in the Presidency’s Office, will strengthen Presidential oversight of delivery against announced reforms.

Additional important policy actions initiated in September 2022 supportive of the JET IP portfolio are:

  • The government announced the procurement by Eskom of 1000MW of renewable power from IPPs and appointment of a new Board. 
  • The Minister for Trade and Industry announced reform of the automotive incentives regime to orientate the industry to electric vehicles. 
  • Adoption by Cabinet of ‘A Framework for a Just Transition in South Africa’. The Framework, which goes beyond the JET IP, informed the development of the JET IP and is intended to guide implementation, so as to ensure that the principles of restorative, distributive and procedural justice are adhered to.

Financing Package

The JET IP expresses South Africa’s needs from 2023 to 2027 of R1.5 trillion with the IPG offer contributing US$8.5 billion package of grants, concessional and commercial funding from France, Germany, United Kingdom, United States of America, and the European Union is provided in the table below. 

The IPG funding will be geared towards supporting the urgent needs expressed in SA’s JET IP, being the i) strengthening and expansion of the transmission and distribution grid; ii) decommissioning and repurposing of coal plants; iii)  accelerating renewable energy investment; iv) energy efficiency measures and v) preparing and laying the social infrastructure to enable a just energy transition for affected workers, communities, and related locations, including job creation opportunities in affected coal mining regions.

US$ millionsGrants / Technical AssistanceConcessional loansCommercial LoansGuarantees
Commercial Loans
CIF/ACT (£500m to leverage an additional $2.1bn)502,555002,605
European Union – EIB351,000001,035
France2.51,000001,002.5
Germany19877000968
United Kingdom2405001,3001,824
United States20.1501,00001,020.17
Total (instrument)329.75,3251,5001,3008,455.7

Potential private and third sector support to the Investment Plan

The remaining financing need is going to require significant investment from a range of sources including the private sector and third sector to deliver on the JET IP in a just and inclusive manner. The catalytic use of concessional and grant funding, as well as guarantees from government, DFIs (in addition to the IPG pledges), climate finance institutions, and philanthropies, will need to be deployed in a way that mobilises additional local and international private sector capital.

Consequently, the PCFTT and the IPG have begun engagements with philanthropies on the potential and specifics of their support, especially on the ‘just’ components of the transition. A number of international and domestic private sector organisations have also been engaged. 

The PCFTT are also commenced engagement with other countries interested in supporting South Africa’s transition journey through providing catalytic capital for the JET IP. 

The Way Forward

The PCFTT and the IPG are committed to continued engagement via [a joint secretariat] as well as regular formal meetings with senior officials and ministers as part of continuing to give effect to the Partnership. They commit to bring in a broader set of parties to increase financing, including philanthropies, multilateral development banks, Development Finance Institutions, NGOs and other donors. 

The next key deliverable is the development of the Implementation Plan for first five-year JET IP (2023 – 2027), the cornerstones of which will be: 

  • Strong governance arrangements for ensuring leadership, oversight, transparency, safeguards, and accountability at various locations of JET IP delivery. 
  • Robust management arrangements for planning, performance, reporting, and communications, at various locations of JET IP delivery. 
  • A Monitoring, Evaluation and Learning Framework for the measurement of success and continuous improvement; and 
  • A Risk Management Framework for identifying potential risks and implementing mitigation measures to reduce material risks to the JET IP. 

These will be developed in collaboration with the IPG as the financing agreements are being concluded and executed for each JET IP programme and project. Importantly, the Implementation Plan will be grounded in existing South African institutions and systems and will adopt global best practice in the identified disciplines.  

The indicative timeline for the presentation of the Implementation Plan is late February 2023. 

The partners re-affirm their shared commitment to ensuring that the principles of distributive, restorative and procedural justice, as set out in ‘A Framework for a Just Transition in South Africa’ are embedded within implementation of the JET IP and the JETP, with particular regard to under-served and vulnerable communities. In doing so, we also re-affirm our commitment from twelve months ago at Glasgow to leave no one behind as South Africa moves onto a path of sustainable and climate resilient economic growth.
Joint updates to leaders will be provided on an annual basis. In doing so, the government of South Africa and the IPG will share key progress against the JETP, and lessons learned, to inform our and other countries’ pursuit of a Just Energy Transition and our global commitment to net zero and a greener, cleaner future.

PRESIDENTIAL CLIMATE FINANCE TASK TEAM AND THE INTERNATIONAL PARTNERS GROUP

09.11.2022

UK COP26 Presidency reinforces urgent need to transform financial system to deliver Glasgow Climate Pact ambition

UK COP26 President Alok Sharma will today chair a ‘COP26 One Year On’ panel event, to mark Finance Day at the COP27 UN Climate Change Summit in Sharm El-Sheikh, Egypt.

This panel event will explore the roles of public and private finance in the climate transition and discuss how actions through international partnership can catalyse greater outcomes. In particular it will highlight that the whole international system needs to go further and faster, making the case that every institution should be adapting to making combating the climate crisis a fundamental part of their overall purpose.

At COP26, almost 200 countries came together to agree to the Glasgow Climate Pact, keeping alive the ambition of limiting the rise in global temperature to 1.5 degrees. Governments, institutions and investors committed to mobilise more finance than ever before, setting out a vision for turning the billions of climate finance into trillions in low carbon, resilient investment and support for those on the frontline of climate change.

Today, we find ourselves in a world facing multiple global crises, threatening economic, food and security for many. Despite these challenging conditions, progress is being made.

The global financial system’s direction of travel remains clear. Economic opportunity is driving climate action. Wind and solar continue to become cheaper than coal and gas while the economic risk of inaction becomes starker.

Faced with these challenges, developed countries are showing their continued commitment to support developing countries, setting out more detail in the $100bn Delivery Plan Progress Report, including on doubling adaptation finance by 2025. The UK has underlined its commitment to providing £11.6bn in climate finance, with Prime Minister Rishi Sunak announcing that the UK will triple support for adaptation to £1.5bn in 2025. Foreign Secretary James Cleverly also announced a significant increase in the UK’s financial support to African countries on the frontline of climate change, confirming that the UK will provide £200 million to the Africa Development Bank (AfDB’s) Climate Action Window (CAW).

We are supporting new approaches to help vulnerable countries access the finance they need as demonstrated through the Task Force on Access to Climate Finance’s first Annual Report. We are pursuing financing solutions to support long term preparedness for countries’ challenges such as, climate loss and damage, including through innovative new Climate-Resilient Debt Clauses (CRDCs); supporting the IMF’s Resilience and Sustainability Trust; and through the Global Shield. Overall these innovations represent tangible progress increasing the ability of countries to retain their fiscal space and be protected when faced with climate disasters. This is the beginning of the effort to give countries the tools they need to ensure their economies are climate resilient.

We have brought together international support behind country platforms, like the $8.5bn South African Just Energy Transition Partnership (JETP) where G7 partners are mobilising $8.5 billion. Hopefully soon more will be announced including in Viet Nam and Indonesia. These are demonstrating a model for country owned, coordinated, catalytic international support to help accelerate just transitions away from fossil fuels and mobilise investment at scale. The UK has recently announced $5.75m for Egypt’s Nexus of Food, Water and Energy platform.

The UK used the Presidency to drive innovations across the development system to scale private finance, including to help countries issue green and sustainability bonds and guarantees to share risk. The UK’s Room to Run guarantee became operational earlier this month, and will unlock $2bn of climate finance for African countries in a partnership between UK, the African Development Bank, and City of London insurers.

The UK used its Presidency to influence across the international development finance system to finance and mobilise investment in climate and nature with most implementing. In Glasgow MDBs launched a seminal Joint Nature Statement and this week they announced a collective update at the Forests and Climate Leaders Summit.

Momentum is gathering behind efforts to build an increasingly sophisticated, better coordinated and more innovative financial system. The High-level Expert Group on Climate Finance (Songwe-Stern), endorsed by the UK and Egyptian COP presidencies, have published their recommendations; with Rwanda we convened the second Climate and Development Ministerial, where three transformational shifts were proposed. While COP26 President Alok Sharma joined calls from others, such as Prime Minister Mia Mottley, for deeper reform of the financial system, including through implementing the recommendations of the G20 Capital Adequacy Framework (CAF) Review.

To meet the goals of the Paris Agreement, these actions to enhance international support must go hand in hand with efforts to transform the financial system to make it fit for purpose for a net zero, resilient world. That is why the UK is committed to becoming the world’s first net zero aligned financial centre, and the Transition Plan Taskforce (TPT) Disclosure Framework and Implementation Guidance to be launched today, are an important step towards giving businesses and financial institutions the tools and certainty they need to meet their targets.

The world must harness this momentum to accelerate the transformational systemic shifts needed to ensure finance flows towards addressing global development, climate and nature needs. The threat of climate change is turning ever more acute, impacting every country across the world. The benefits of action are only matched by the terrifying cost of inaction.