SA should pay more attention to green growth
by Anthony Black and Leonie Joubert,
2014-06-09 06:49:37.0
INVESTING in efficient public transport and densifying the city will not only help South Africa meet its international carbon emissions reduction targets, but will also address poverty by boosting employment and reducing the costly burden of commuting for workers. This is the kind of win-win solution policy makers need to aim for if they wish to steer South Africa towards a greener economy without compromising development goals.
Earlier this year, the Energy Research Centre (ERC) at the University of Cape Town brought together more than 100 professionals from the global south to a "development and mitigation" forum. One driving concern for the gathering was how climate change "mitigation" is often treated as a separate issue from development. Yet, researchers argued, it is this very "silo" mentality that is hampering our ability to respond appropriately to the twin challenges of transforming to a low-carbon economy at the same time as tackling poverty through appropriate development interventions.
Returning to the transport sector as a way of demonstrating how a cross-disciplinary approach is necessary, take the example of the electric car. If the government invested its emissions-reduction budget on subsidising the roll-out of electric cars it would in effect be a subsidy for the wealthy, as vehicles of this nature are bought mostly by high-income users.
But investing in good public transport and making cities more compact would reduce vehicle emissions and help growth by reducing traffic congestion. It would also address the challenges faced by workers who have to commute long distances. The burden of the apartheid-era design of our cities is that working-class communities live far from hubs of employment. Finding work and commuting there is both difficult and costly. This constitutes a tax on employment and on the poor.
Getting to a win-win solution demands that policy makers step outside of the silo approach that treats emissions reduction and poverty reduction as separate issues. A second example is that of carbon taxes, which are high on the mitigation agenda and are being considered by the National Treasury. Again this is an important initiative that should be supported. But while carbon taxes are being considered, other branches of the government are promoting incentives and regulations to support "beneficiation". While this "added value" approach is aimed at keeping money onshore, these are highly energy and capital-intensive industries. They create high emissions but little direct employment.
The long-term subsidisation of electricity, together with other forms of support to heavy industry, has allowed this emissions-intensive sector to flourish. There is now an enforced shift towards the proper pricing of electricity and the rise in prices is almost certainly having a far greater effect on limiting the growth of power consumption (and emissions) than the host of interventions to encourage green energy investments. For instance, in some major cities, we are seeing how higher electricity prices are beginning to decouple power consumption from economic growth. In Cape Town, electricity use has declined since 2008, in spite of the fact that the city’s economy has seen solid growth during that time.
Integrated policies are required that bring together the development agenda and our need to reduce emissions. In 2009, the government announced at the United Nations climate summit in Copenhagen that the country would cut its greenhouse gas emissions by 34% below a "business as usual" trajectory in 2020, and 40% in 2025. From 2035, emissions are set to decline.
But the unemployment rate of 25% remains the key concern. Some initial modelling by the ERC indicates that a carbon tax might result in a small decline in the rate of employment growth, making such a tax difficult to sell politically. However, if revenues were used in a way that supported more labour-absorbing sectors, such as light manufacturing and agriculture or to support wage subsidies and training, its effect on employment would surely be positive.
Policy makers, economists and development specialists need to integrate climate-change mitigation with the development agenda more closely. While development objectives must be at the forefront, green growth and emissions reduction need to be key considerations rather than an afterthought.
• Black is professor of economics and senior research fellow with the University of Cape Town’s Environmental Policy Research Unit. Joubert is a freelance science writer.
Picture: THINKSTOCK
INVESTING in efficient public transport and densifying the city will not only help South Africa meet its international carbon emissions reduction targets, but will also address poverty by boosting employment and reducing the costly burden of commuting for workers. This is the kind of win-win solution policy makers need to aim for if they wish to steer South Africa towards a greener economy without compromising development goals.
Earlier this year, the Energy Research Centre (ERC) at the University of Cape Town brought together more than 100 professionals from the global south to a "development and mitigation" forum. One driving concern for the gathering was how climate change "mitigation" is often treated as a separate issue from development. Yet, researchers argued, it is this very "silo" mentality that is hampering our ability to respond appropriately to the twin challenges of transforming to a low-carbon economy at the same time as tackling poverty through appropriate development interventions.
Returning to the transport sector as a way of demonstrating how a cross-disciplinary approach is necessary, take the example of the electric car. If the government invested its emissions-reduction budget on subsidising the roll-out of electric cars it would in effect be a subsidy for the wealthy, as vehicles of this nature are bought mostly by high-income users.
But investing in good public transport and making cities more compact would reduce vehicle emissions and help growth by reducing traffic congestion. It would also address the challenges faced by workers who have to commute long distances. The burden of the apartheid-era design of our cities is that working-class communities live far from hubs of employment. Finding work and commuting there is both difficult and costly. This constitutes a tax on employment and on the poor.
Getting to a win-win solution demands that policy makers step outside of the silo approach that treats emissions reduction and poverty reduction as separate issues. A second example is that of carbon taxes, which are high on the mitigation agenda and are being considered by the National Treasury. Again this is an important initiative that should be supported. But while carbon taxes are being considered, other branches of the government are promoting incentives and regulations to support "beneficiation". While this "added value" approach is aimed at keeping money onshore, these are highly energy and capital-intensive industries. They create high emissions but little direct employment.
The long-term subsidisation of electricity, together with other forms of support to heavy industry, has allowed this emissions-intensive sector to flourish. There is now an enforced shift towards the proper pricing of electricity and the rise in prices is almost certainly having a far greater effect on limiting the growth of power consumption (and emissions) than the host of interventions to encourage green energy investments. For instance, in some major cities, we are seeing how higher electricity prices are beginning to decouple power consumption from economic growth. In Cape Town, electricity use has declined since 2008, in spite of the fact that the city’s economy has seen solid growth during that time.
Integrated policies are required that bring together the development agenda and our need to reduce emissions. In 2009, the government announced at the United Nations climate summit in Copenhagen that the country would cut its greenhouse gas emissions by 34% below a "business as usual" trajectory in 2020, and 40% in 2025. From 2035, emissions are set to decline.
But the unemployment rate of 25% remains the key concern. Some initial modelling by the ERC indicates that a carbon tax might result in a small decline in the rate of employment growth, making such a tax difficult to sell politically. However, if revenues were used in a way that supported more labour-absorbing sectors, such as light manufacturing and agriculture or to support wage subsidies and training, its effect on employment would surely be positive.
Policy makers, economists and development specialists need to integrate climate-change mitigation with the development agenda more closely. While development objectives must be at the forefront, green growth and emissions reduction need to be key considerations rather than an afterthought.
• Black is professor of economics and senior research fellow with the University of Cape Town’s Environmental Policy Research Unit. Joubert is a freelance science writer.
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