Climate change is a threat to the public, and public money must be harnessed to fight it

2019 has been a year of determined calls for climate action. We've seen young people rise up, take the lead on mobilising and confront governments across the world for failing to act urgently in the face of increasing signs of climate breakdown.

People everywhere are refusing to accept a business-as-usual approach over climate change. In SA, as in many parts of the world, there are demands that public finance institutions act with urgency and unity to prevent dangerous levels of climate change.

This year we have seen South African commercial banks take gradual steps forward on climate risk. FirstRand and Standard Bank have joined Nedbank in committing to publish their lending and investment policies for fossil-fuel projects, which drive the climate crisis.

Nedbank is well ahead of its peers, having publicly committed to no longer finance new coal-fired power stations from 2019. It is also the only South African bank that discloses the proportion of its assets exposed to fossil fuel-related risks.

While Nedbank and the other commercial banks still have a long way to go in terms of meaningful climate action, they are doing much better than public finance institutions such as the Development Bank of Southern Africa (DBSA) and the Industrial Development Corporation (IDC), which have failed to take noteworthy action on the climate crisis.

Public finance institutions have the mandate to invest in a transformative transition to renewable energy, a shift at which financial markets are still balking. In SA, the DBSA and IDC can shape and guide private capital towards sectors that can guarantee a fair transition for everyone.

The risk for SA of not transitioning to a low-carbon future has been calculated at a potential R2-trillion.

The role of public finance in addressing "transition risk" cannot be underestimated, especially as the national government's actions on reducing SA's contribution to global greenhouse gas emissions have been fragmented, ineffective and weighed down by powerful business interests keen to keep investing in fossil fuels.

SA is the world's 13th-largest emitter of greenhouse gases and the largest in Africa. The nation is falling behind in responding to the climate crisis and urgently needs to decarbonise through leveraging public finance. In addition, the country needs to urgently act on the Eskom crisis.

As Eskom struggles to supply coal-based power, renewable energy sources are now more abundant and wind and solar energy are currently the least expensive option for adding new generation capacity.

So it is now not only possible but absolutely necessary for SA to shift to a cleaner and more efficient energy system. The transition to renewable energy and the phasing out of coal should be done in a manner that prioritises access to new economic opportunities for coalworkers and their communities, ensuring that no-one is left behind as the shift is made.

Over the past two years there have been increased calls for public funds to be at the heart of tackling climate change. In April 2019, climate non-governmental organisations hand-delivered the names of more than 8,000 people calling for the DBSA not to finance the proposed Thabametsi coal-fired power plant in Limpopo.

The #ThumaMinaDBSA call insisted that the development bank has a duty to ensure that projects it finances are in the wider public interest, and that it is not financing harmful and expensive projects that speed up the climate crisis.

The DBSA has since confirmed that it is currently not in line to finance Thabametsi. While this is good news, the bank's energy financing policies remain lenient, and leave the DBSA open to potentially financing new coal-power infrastructure further down the line.

While the bank has highlighted its financing of renewable energy, it still has not made a public commitment to stop fossil-fuel financing. The DBSA's efforts on climate action are diminished as a result of its potential exposure to projects that have a devastating impact on local communities.

Addressing the climate crisis will require significant public funds to develop a more sustainable, equitable and resilient SA.

We need urgent and ambitious action from public finance institutions, which must use public funds to finance a transformative, just transition to promote and support the fight against climate change, as well as to address poverty and inequality.

Any new investments in fossil-fuel infrastructure will hinder efforts towards a progressive, just transition to renewable energy, with huge losses for SA's public finances. We have a short time left to embrace the opportunities of a just transition and do our part to stop the climate crisis.

Inaction on climate change by public finance institutions is putting young people's futures at risk today.

The call for public finance institutions to drive climate action is now evolving into a broader call on finance minister Tito Mboweni, as the government's representative within these institutions, to insist that they exclude all forms of fossil-fuel finance from their energy lending portfolios, divest all their assets from fossil-fuel companies and invest in a fair, fast and just transition away from fossil fuels to renewable energy.

Delaying action means that the climate crisis will continue to threaten the work of public finance and amplify the challenge of protecting vulnerable people, communities and sectors from the impacts of this same crisis. Public finance institutions have an essential role to play in effectively tackling the climate emergency and building the resilience of the most vulnerable people in our society.

It is obvious that the government can't finance the decarbonisation of SA's energy system alone, but it has to lead the way.