South Africa has secured$8,5 billion to transition to a greener economy in line with the increasing calls by the world’s superpowers for countries to cut carbon emissions and ‘save the environment.’
South Africans received the news during the COP26 United Nations Climate Change Conference in Glasgow, Scotland.
The approximately R130 billion package is poised to assist Africa’s most advanced economy to lead the way in the fight to cut the use of fossil fuels to environmentally friendly sources of energy.
The U.K., US, France, Germany, and the E.U. will mobilize the funds and assist S.A. in making the shift. They will help mobilize the funds in the next three to five years. The money will be mobilized via several financial instruments, which include grants and concessional finance. These are usually on softer terms than traditional market-related loans.
The road ahead is still long
Even though several leaders are touting climate control as the next big thing, many countries still fail to reach their target carbon limits due to several factors. One recent factor is that of rising gas prices and crude oil. Increasing prices have led to some countries reverting to cheaper fossil fuels such as coal for energy generation.
China, on the other hand, has gone about it differently. They announced cutting funding for coal-powered electricity production in other countries. Nevertheless, China has increased coal production to fire their own electricity production.
Nevertheless, during the COP26 United Nations Climate Change Conference, the U.S. president lamented the stance that the Organization of the Petroleum Exporting Countries (OPEC) is taking. He accused them of deliberately keeping oil production levels lower to enjoy a higher price of the precious commodity.
“If you take a look at gas prices and you take a look at oil prices, that is a consequence of thus far the refusal of Russia or the OPEC nations to pump more oil. And we’ll see what happens on that score sooner than later,” Joe Biden said during the COP26 Climate Change Conference.
Brent crude price has been trading above $80/brl, a remarkable recovery from last year’s lows caused by the pandemic.
OPEC will meet on Thursday, 4 November 2021.