Jon Williams, partner: cities and urbanisation at PwC, says: “Already, the world’s cities are dealing with the effects of climate change, from both physical and economic perspectives. Many cities are likely to experience climate change impacts more acutely than other areas given their population density. Cities are also uniquely placed to solve some of the most significant problems on the ground, such as the need to incorporate circular economies and transition to low-carbon economies. We cannot forget that climate change is a human problem, not an environmental problem,” he says.
Creating shared value
Cities are under pressure to ensure that they address social, environmental and economic challenges to create shared value for citizens, business and the planet.
The process of urbanisation continues, making their role ever more important for the future of humanity. “The ability of cities to address climate-related and socioeconomic issues will become a key differentiator in attracting local and foreign investment, new businesses and residents,” says Williams.
The benefits of the development of effective future-fit strategies include reduction of climate change costs in the long term, greater equality and inclusivity, increased focus on economic improvement and poverty reductions, key sector modernisation, enhanced energy security, reduced air pollution and a cleaner, safer urban environment.
These ‘future-fit cities’ will be serviced by economies of future-fit businesses, each playing their part to create the conditions required for humanity to continue to flourish within the resource constraints of our planet. But there are key caveats: “The challenge ahead is to accelerate the market so that low-carbon solutions become cheaper and more readily available, while ensuring that this transition is open and equitable to all,” he says.
Stimulating sustained international action
Jayne Mammat, partner: sustainability and climate change and Africa ESG lead at PwC, says: “While the results of COP26 may not have satisfied many policymakers and activists, it is undeniable that climate change has moved into a different phase of global attention and the pressure created by the congress has the potential to stimulate the next round of sustained international action similar to the catalytic effect that the Glasgow Climate Pact of 2021 provided to much of the world.”
Mammat says governments need to prioritise investment. “National recovery programmes present an opportunity for governments to more closely align and integrate their public policies with climate change mitigation objectives. Directing investment toward sectors and technologies that can accelerate the transition will enhance resilience to future shocks should be top of mind for policymakers.”
Such investments include green construction and buildings, renewable energy, encouragement of non-motorised and shared transport and spatial planning to support it, green spaces and nature-based solutions to combat the heat island effect, and the creation of circular economies for clean and resource-smart cities.
The risks for South Africa are real and becoming more evident by the day.
“The impacts of climate change resulting in damage to both communities and environment are expected to include drought, depletion of water resources, soil erosion, reduction of biodiversity, challenged subsistence economies and cessation of cultural activities. South Africa is one of the top five countries in terms of carbon emitted per unit of energy, which means to meet net-zero global objectives, the challenge will be to transform our carbon-intensive economy while simultaneously meeting developmental needs in a just transition.”
Unprecedented opportunity for the modernisation
This is both an enormous challenge and an unprecedented opportunity for the modernisation of the country, Mammat says. “South Africa is the largest electricity market in Africa, but its power generation is heavily dependent on an ageing fleet of coal-fired power stations that must be decommissioned over the next 20 years. Eskom has stated that it aims to be net zero by 2050, so the country must progressively move toward renewable energy, in concert with the wider climate agenda.”
The trick is to integrate the need for a just transition into South Africa’s climate planning. “The need for a just transition is recognised in our National Development Plan 2030, but funding mechanisms are yet to be determined and how the increasing role of renewable resources will fill the gap left behind by decommissioned coal plants – including the socio-economic challenges that will come with the change – has not been outlined yet,” she says.
A just transition needs to include accessible and affordable energy, economic opportunities for workers and communities, the liberalisation of the energy market and internal city efficiency improvements, she adds.
Role of cities, metros and municipalities
What role must South African cities, metros and municipalities play in addressing these challenges?
Williams says the country needs high-level buy-in from leadership across government in order to unlock sufficient resources, provide appropriate incentives and enforce measures to advance the climate transition toward net zero in an equitable way.
“South African cities have strategic development plans with accompanying capital investment plans, but further financial support will be necessary for them to reach their climate ambitions and directly tie these into more concrete planning and financial priorities. Successful implementation of green solutions relies heavily on municipal leaders choosing the right partners for support,” Williams says.
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