Paper short abstract:

The green transition in Southern Africa opens windows of opportunities for sustainable structural transformation and employment generation, beyond direct green jobs. Regulation, development finance and industrial policy must be integrated to direct and coordinate investments and create employment.

Paper long abstract:

Climate Change requires rapid and systemic economic changes across sectors. The green transition in the Southern Africa opens several windows of opportunities for sustainable structural transformation and employment generation, far beyond direct green jobs creation. The employment potential is dependent on several factors, including the extent to which minerals extraction is linked to downstream processing and upstream production and servicing of renewable energy technologies and infrastructures. A third linkage with large indirect employment generation potential is the one connecting renewable energy to downstream green hydrogen and energy-intensive industries. In turn, green hydrogen can be used further downstream to transform difficult to abate sectors – chemicals (and fertilizers), steel (and metal products), and cement – currently fuelled with coal in South Africa, or as a major source of new export in countries like Namibia. The greening of these industries is also becoming a precondition for retaining and expanding jobs in exporting sectors targeting markets with high environmental standards.

Development opportunities can however turn into development traps if such green transitions are not governed and regulated. We argue for integrating regulation, investment and industrial policy to plan, direct and coordinate investments in critical infrastructure and industries. Market-shaping competition and regulatory rules are also essential to create a viable and predictable business environment in the context of technological change. Developmental finance is also essential given the long-term nature of these investments. Overall, this implies the state must play a dynamic industry-shaping role influencing value creation and capture through regulations and industrial policies.