DIW: Success of climate partnerships depends on social issues

The German Institute for Economic Research (Deutsches Institut für Wirtschaftsforschung, DIW) has published an analysis of climate partnerships between industrialized countries and emerging economies. Using South Africa as an example, it shows that financial and technical support alone is not enough. Rather, social issues would determine their success.
»The success of the energy transition will depend heavily on whether you can give prospects to the people who are attached to South Africa’s coal industry and thus earn three times more than in normal jobs,« says Heiner von Lüpke, a research fellow in the DIW’s Climate Policy Department. According to the institute’s analysis, however, donor countries are primarily interested in investment projects in power generation. Some South African representatives therefore worry about »neo-colonialism.« They fear that privatization in the energy sector will only create new markets for Western companies, according to the DIW.
Because of its enormous coal reserves, South Africa exports millions of tons of coal to Germany as well. Together with other industrialized countries of the G7 and the EU, Germany concluded a Just Energy Transition Partnership (JETP) with South Africa in 2021. The industrialized countries are granting South Africa $8.5 billion to convert its energy supply to CO2-free technologies, of which Germany is paying $1 billion.
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