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The assumption that there will be trade-offs between climate change mitigation measures and poverty reduction measures goes largely unchallenged in the United Nations Framework Convention on Climate Change. This paper analyses how these trade-offs unfold at the national level in South Africa. South Africa is a middle income country that exemplifies the challenge of accommodating efforts for emissions reductions and poverty reduction at the same time. The paper analyses the trade-offs and distributional conflicts that drive and hinder institutional change in the current climate policy regime. The analysis focuses on three regulatory regimes in climate change: the climate change response white paper, the carbon tax and the renewable energy program. A combination of interview-based qualitative research and an innovative discourse network analysis reveals the discourse between competing coalitions supporting and opposing specific interventions. We find in the case of South Africa that the lack of economic growth over the last few years has kept emissions levels relatively low and consequently postponed the hard trade-offs between climate change mitigation and poverty reduction. Trade-offs appear in the political discourse, especially around the carbon tax and carbon budgets. Yet, distributional conflicts determine both drivers and barriers to institutional change. Powerful coalitions opposing the carbon tax managed to push the government into postponing the implementation of the tax. We conclude that win-win situations are possible, and that the crux lies in the implementation. A carbon tax proposal has made provisions for off-setting emissions through investment in clean technologies in low income communities. The renewable energy program created large foreign investment influx into the country, which is partially spent on community development. The main challenge in creating win-win situations is overcoming the distributional conflicts. Lack of policy coordination, alignment and clarity of the legal frameworks create severe barriers to institutional change.

This paper serves as a background document for a research project that informs sustainable development planning through the analysis of developmental impacts of mitigation action.