Greening South Africa's Industrial Policy

South Africa faces a dual challenge of structural economic stagnation and high carbon intensity, rooted in its historical reliance on coal-based energy and Minerals Energy Complex industries. This paper argues that greening industrial policy offers a strategic opportunity to shift toward a more inclusive, value-adding, and climate-compatible economy. It situates South Africa within a rapidly changing global context marked by climate-related trade measures, such as the EU’s Carbon Border Adjustment Mechanism, and large-scale green subsidies in advanced economies.

While South Africa has taken tentative steps through sectoral masterplans and renewable energy initiatives, progress has been slow and fragmented. The study emphasises an economy-wide approach that combines support for nascent green sectors—such as renewable energy, electric vehicles, and green hydrogen—with strategies to decarbonise heavy industries and expand employment in relatively low-carbon, labour-intensive sectors like agro-processing and tourism. Policy recommendations include leveraging tax incentives, development finance, localisation measures, and strategic trade instruments to accelerate green structural transformation and secure South Africa’s competitiveness in emerging low-carbon value chains.

Abstract based on original source.