South African Workshop Presentations

Presenter: 

Marba Visagie
Department of Trade and Industry

Introduction

The international trade arena requires services and goods alike to display their environmental conformity status. Climate change mitigation measures may currently be at the cutting edge of events but adaptation, water efficiency, waste minimisation and recycling have equal potential to give rise to environmental technical barriers to trade (TBT). South Africa also has its own body of environmental laws that compel investors to protect the environmental integrity of industrial operations or run the risk of financial losses.

Environmentally responsible business plans have a better chance to obtain positive records of decision (ROD) from environmental impact assessments (EIA). Non-conforming business practices will impair an enterprises’ brand name, market image and legal standing.

In essence the key industry sectors supported by the IPAP for the three year period 2010/2011 – 2012/2013 will be as follows:

• Metals fabrication and capital transport equipment;
• Green Jobs and Technologies (New);
• Agro-processing;
• Automotive industries;
• Plastics, pharmaceuticals and chemicals;
• Textiles, clothing, leather and footwear;
• Forestry, timber, pulp, paper and furniture;
• Cultural industries, crafts and film;
• Tourism
• Business process outsourcing;
• Tradable and non-tradable services;
• Advanced manufacturing

Savings through environmentally responsible production practices justify investment in natural-resource efficient technologies. Businesses in these sectors are willing to become greener but may require guidance around the optimal phasing of the investment that is required. Government is also exploring the potential to fast track the return on investment in cleaner technologies, maybe by adding a sweetener in the form of tax or other incentives. One option is to upscale the local supply of environmentally sound plant and equipment, provided South Africa can manufacture it on the standard required but at a lower ex factory price than imported products.  An option that is already available is subsidised technical assistance from the National Cleaner Production Centre (NCPC). It should also be noted that the new Tax Incentive Programme will require proof of energy efficiency as a pre-requisite for access to the tax benefits.

Moreover, the demand for environmental goods and services has created an enabling environment for green jobs. The environmental goods and services (EGS) industry, also termed the Green Jobs and Technologies Sector, is thus recognised as a separate industrial sector in the IPAP for the three year period 2010/2011 – 2012/2013. 

n order to accelerate the pace of industrial investment in the traditional industry sectors the dti will purposefully steer the industrial sector along a feasible path of cleaner, low carbon production.

Importance of incentives
The dti in previous versions of the Competitiveness Fund Programme offered financial assistance to enterprises engaging in certain environmental activities, Decades ago ISO 14001 certification was sufficient to help exporters overcome environmental technical barriers to trade (TBT). Participation in Waste Minimisation Clubs further contributed to opening up of environmentally sensitive markets. Although the revised Competitiveness Programme no longer offers incentives for certification, the dti has extended the mandate as well as the capacity of the National Cleaner Production Centre (NCPC), which now offers subsidised cleaner production technical assistance to all industry sectors.  The NCPC will in 2010 launch the €16m Industrial Energy Efficiency (IEE) Project and build capacity to expand its recycling and water efficiency activities. The subsidised IEE project will train and educate large numbers of energy practitioners such as engineers, technicians and energy consultants on the concept of energy systems optimisation.

South African industries are unilateral in their request for dti assistance to alleviate environmental conformity pressures. Investment in energy, water and waste management compliance and certification is an imminent part of any effort to remain relevant and competitive in the marketplace. Although savings and long term sustainability will be achieved through greening and de-carbonising industry, small and medium enterprises lack the financial resources to invest in costly imported cleaner technologies.  

The positive side of the coin is to look at the multiple positive sides to environmental conformity. Environmental and climate change demands on industry provide for opportunities to increase resource efficiency, in particular energy efficiency, which has long term cost and climate saving saving impacts. Opportunities emerge to develop new industries around environmentally sound technologies. Environmental compliance, cost and competitive pressures give rise to significant employment opportunities in the form of green jobs. It is estimated that traditional industry sectors currently hold 20% or about 45962 of South Africa’s green jobs, whereas 80% or about 183849  green jobs reside in a combination of regulatory (government) services and commercial environmental services enterprises. Although import statistics do not distinguish between environmentally sound and other forms of capital equipment there is generally a low supply of energy and water efficient equipment in South Africa. Unutilised industrial opportunities in this area should be explored and utilised.  Given the South Africa’s large carbon footprint, the lack of green certification and reporting by industry in general, and the low levels of green procurement by companies and government alike, there clearly is a huge potential to grow the number of green jobs in both services and manufacturing.

Role of the Environment Directorate
The promotion of ‘Green Jobs’ has been given priority in the ‘Framework for South Africa’s Response to the International Economic Crisis’. This Framework, and the Programme of Action (POA) emerging from it, flag opportunities opening up in industries that seek to combat the negative effects of climate change and emphasises the need for incentives to encourage the creation of green jobs. The IPAP through its Environment Directorate is ideally positioned to respond to the Green Jobs POA. 

Accordingly, the dti will encourage industry to pro-actively respond to environmental pressures through greener business plans based on expert cleaner production advocacy, and to action emerging opportunities in the field of environmentally preferred technologies and business practice. There is no limit to the need for new and innovative business opportunities, ranging from energy efficient lighting systems, solar powered technologies and the growing range of environmentally preferred consumer goods.

The role of the Environment Directorate in the Industrial Development Division (IDD) is to continuously network and grow their understanding of growth opportunities posed by the convergence of industrial and environmental policies.  In addition to policy analysis the Directorate provides decision makers with policy advocacy and project and programme proposals. Whilst overseeing the National Cleaner Production Centre (NCPC) as the dti’s long term environmental implementation programme, the Environmental Directorate interacts with manufacturing sectors and Advanced Manufacturing in particular, to encourage energy and resource efficiency solutions, and facilitates focused capacity development in green technologies. The Environment Directorate furthermore promotes green jobs through interaction with entities responsible for skills development, expert services, technical infrastructure and financial incentives, all of which play a role in promoting green jobs. An important role of the Environment Directorate will be to participate in a suitable programme for monitoring, recording and reporting on green jobs.

Growing the number of Green Jobs
No formalised statistical baseline exists in South Africa on the number of green jobs. The current number of green jobs in SA, as recorded by a 2009 Environmental Goods and Services (EGS) Forum survey, is 229811, of which 20% or 45962 may be in manufacturing sectors. In accordance with international benchmarks the number of green jobs has the potential to grow at 10%-12% p.a. and eventually contribute 1% to GDP, provided appropriate incentives are in place.  In 2007/2008, the global market value of the ‘Low Carbon Green Sector’ was £3046 billion (or $5 trillion) and made up between 7 and 8% of global GDP.

African Caribbean and Pacific Group of States Science and Technology Programme 
Grant Contract: FED/2009/217066