The Climate Change Act, as endorsed by the President, is intended to enable the alignment of policies that influence South Africa’s climate change response to ensure that South Africa’s transition to a low-carbon and climate-resilient economy and society is not constrained by policy contradictions.
Introduction
The Climate Change Act, No. 22 of 2024 (the “Act”) was assented to by the President of the Republic of South Africa on 23 July 2024. This crucial legislation is intended to outline, oversee and enforce South Africa's approach to climate change. The Act supersedes other climate-related laws, mandating that all government policies and actions align with its objectives. It mandates all levels of government to map, plan for and address climate adaptation needs, recognizing the urgent nature of climate change.
The commencement date of the Act has yet to be proclaimed. This means that the mechanisms to combat climate change as provided for by the Act cannot yet be enforced, and important timeframes have not yet commenced.
Objectives of the Act
The Act aims to develop a national climate change response to ensure a long-term just transition to a climate-resilient low-carbon economy and society in South Africa. With the reference to “just transition” in the objectives of the Act and the fact that this phrase is referred to through-out the Act, it is clear that the implementation of the Act will not be done at the expense of any one section of the public, an important feature for South Africa where nearly half of the population subsists on less than USD 100 per month.
Who are the role players?
The Act does not impose specific obligations on private sector stakeholders. It does, however, empower the Minister of Forestry, Fisheries and the Environment (the “Minister”), together with the other members of the Cabinet, to impose certain restrictions or specific obligations on persons1. A notable example relates to the publication of carbon budgets.
The Act places a duty on the Minister to publish the list of greenhouse gases (“GHGs”) which the Minister reasonably believes cause or are likely to cause or speed up climate change, as well as activities which emit, or have the potential to emit, one or more of these GHGs. Following the publication of the GHGs list, the Minister is required to assign carbon budgets to persons engaged in the activities which emit or have the potential of emitting GHGs. When allocating carbon budgets, the Minister must consider several relevant factors, including the alignment of the carbon budgets with the national GHG emissions trajectory2. A carbon budget must span a minimum of three consecutive five-year periods and must stipulate the maximum allowable GHG emissions for the first five-year period. The process of allocating carbon budgets does not require public participation. However, the Act requires the Minister to follow a fair process before issuing any given carbon budget, including consulting with the person who will be subject to such carbon budget. The carbon budgets will remain in place for at least three successive five-year periods and will specify the maximum amount of GHGs that each person may emit during the first five-year period. The targets must include quantitative and qualitative GHG emission reduction goals for the first five years, the subsequent five to 10 years and for a 10-to-15-year period thereafter. The targets will be reviewed every five years.
After a carbon budget is assigned to a person, the person must develop and submit a GHG mitigation plan to the Minister. The GHG mitigation plan must set out the mitigation measures that the person proposes to implement to remain within the allocated carbon budget and meet any additional processes, which the Minister may prescribe in further regulations to be published under the Act.
The Potential Impact of the Act
A voluntary carbon market (“VCM”) already exists in South Africa. With the Act providing for carbon budgets to be assigned to persons engaged in the activities which emit or have the potential of emitting GHGs, it is anticipated that this will provide further impetus for the growth of the VCM in South Africa as persons seek to offset their emissions to keep within their assigned carbon budgets. The Act however does not regulate the VCM which is still largely unregulated, and which relies on the South African common law, for example, in respect of the legal characterization of voluntary carbon credits.
One of the criticisms of the Act is that it does not provide a legal basis or mechanisms for dealing with Loss and Damage (“L&D”) brought about by natural disasters linked to climate change. Recent climate-related disasters in South Africa such as the floods in KwaZulu-Natal in January 2024 which resulted in damages in excess of around 1,226 households and a loss of 41 lives are the perfect example of why the Act needs to have provision for L&D. Whilst the Act has now been assented to and therefore cannot be changed without an official amendment process being followed, including provisions related to L&D and assigning responsibility for such L&D in the regulations under the Act will ensure that the Act plays a more meaningful role in the public sphere to the extent that climate related disasters occur in the future.
Section 7(2) of the Act provides that organised labour, civil society and business “may advise on the Republic’s climate change response”. However, it has been argued that this does not go far enough as there is no institutional mechanism that has been elaborated on or included for this advisory process. Indeed, the importance of including civil society and in particular the scientific community in developing a national climate response cannot be overestimated. Unfortunately, the Act does not provide any means for scientific research to be used to advise policymakers.
Perhaps the biggest criticism of the Act, however, is that there is currently no penalty in the Act for exceeding a carbon budget or failing to implement a GHG mitigation plan. Instead, the proposal is that the Carbon Tax Act, 2019 (“CTA”) will be amended to make provision for additional tax to be paid – at a prescribed rate – on emissions that exceed the carbon budget. This will, however, require a formal amendment to the CTA, which is a timely exercise and, until this is done, no penalties for exceeding a carbon budget or failing to implement a GHG mitigation plan exist. The only offence in the Act related to carbon budgets and GHG mitigation plans is for the failure to prepare and submit a GHG mitigation plan to the Minister. A person convicted of this offence is liable to a fine not exceeding R5 million and/or to imprisonment for a period not exceeding five years, and in the case of a second or subsequent conviction, to a fine not exceeding R10 million and/or to imprisonment for a period not exceeding 10 years. Climate activists in South Africa have thus called for the inclusion of meaningful penalties and other compliance and enforcement provisions in the regulations related to carbon budgets to ensure that the Act is effective in achieving emissions reduction commitments.
Conclusion
The preamble of the Act rightly states that:
“[R]esponding to climate change raises unique challenges to effective governance as its impact transcends and challenges traditionally sectoral governance approaches, which require a nationally driven, coordinated and cooperative legal and administrative response”.
Although recognizing that the need for mainstreaming the climate change response into sectoral plans and across multiple levels and actors is important, this should be driven by a strong oversight function which can align plans, policies and strategies, set and ensure standards and accountability, identify and co-ordinate cooperation, and streamline monitoring and reporting. A wide range of sectors are, and will continue to be, impacted by climate change, and so a rapid socio-economic transformation is required in order to reduce vulnerability and mitigate the effects of climate change. This will require accelerated changes to the way people and goods are transported, the way energy is produced, increasing the availability of new skills in the labour market, changes to the food and water systems and changes to the built environment, amongst others. Most countries are facing the same governance and co-ordination problems in addressing climate change, and South Africa is no exception. This raises the question as to whether the co-ordination and oversight functions proposed in the Act, which rest very heavily on one government department (the national department responsible for environmental affairs) and the Minister, are sufficient. Implementation of climate policy in the Act requires co-operation across national departments and between different spheres of government, which prima facie appears to require more co-ordination than the current framework for intergovernmental relations can provide.
Although the promulgation of the Act is a significant milestone, important regulations, such as those governing carbon budgets and mitigation plans, have yet to be finalised. It is essential that these regulations include stringent measures to ensure compliance with the provisions of the Act, and hence public participation is vital for ensuring that all identified gaps and weaknesses are adequately dealt with.
Kayla Moodley (White & Case, Trainee Lawyer, Johannesburg) contributed to the development of this publication.
1 The Act does not define “persons” although in terms of South African law persons would include corporate entities and natural persons.
2 The national GHG emissions trajectory is a specific framework that has been mandated by the Act and is intended to serve as a benchmark against which South Africa’s progress in emissions reduction can be measured.
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This article is prepared for the general information of interested persons. It is not, and does not attempt to be, comprehensive in nature. Due to the general nature of its content, it should not be regarded as legal advice.
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