National Assembly, Parliament, Cape Town, 17 February 2021
I would like at the outset to acknowledge and applaud the role our President has played in these extremely challenging times and compliment him on the SONA address, which highlights the urgent need to defeat this coronavirus pandemic and build an economy for all sixty million South Africans.
Our Economic Reconstruction and Recovery Plan prioritises the need to overcome abiding constraints and provide sustainable solutions to intractable problems of poverty, inequality and unemployment! Central to the plan’s objectives, in the words of our President: “to forge a new economy in a new global reality.”
Climate change is one of those new global realities. The 2021 Global Risks Report published in January this year under the auspices of the World Economic Forum, identified infectious diseases, livelihood crises and extreme weather events as the risks most likely to become critical threats to the world in the coming two years.
Zurich Insurance Group chief risk officer, Peter Giger quipped “there is no vaccine against climate risks, so post-pandemic recovery plans must focus on growth aligned with sustainable agendas”.
Climate change poses both risks and opportunities to our society and economy. On the risk side extreme weather events including storms, droughts, and rising sea levels, are already part of our lived reality.
In the last week of January, more than 20 people died in Mozambique, Zimbabwe, Eswatini and South Africa, as a result of the destruction caused by tropical cyclone Eloise. We were reminded once again how vulnerable the developing world is to extreme weather events.
Nevertheless, due to the advanced early warning systems of our SA Weather Service, and the impressive coordinated response of our Disaster Management capability, at national, provincial and local government level, we were able to take advance measures to manage some of the worst impacts of the storm on both people and infrastructure.
This process was assisted by the implementation by all levels of government of adaptation strategies arising from the National Climate Change Adaptation Strategy that was approved by Cabinet last year.
What we now need is a better and more mainstream understanding of the climate transition risk our historical growth trajectory poses to the long-term sustainability of our economy and society.
Over the last year, in response to investor and societal pressure, nine of the world’s twelve largest economies, and many of our major trading partners, have already made net-zero carbon commitments.
These countries include China, the EU bloc, Japan, and Korea. Similar pronouncements are expected from the Biden Administration now that it has announced it will re-join the Paris Agreement.
Because our energy and production processes are highly carbon-intensive, our major trading partners, who have made net zero commitments, are likely to prioritise trade with other low carbon economies. This poses a risk of non -tariff trade barriers going forward.
Already there is increasing pressure from financial institutions who refuse to fund the development of new carbon-intensive assets.
In his address last week President Ramaphosa did not shy away from these challenges nor did he fail to indicate how we must address them.
In noting that Eskom, our largest greenhouse gas emitter has committed in principle to net-zero carbon emission by 2050, the President stressed the importance of the work of the Presidential Climate Change Commission that will meet for the first time this month.
This Commission must develop a clear plan to take us from an aspirational commitment to a low carbon, climate-resilient economy and society to the reality of new technology, new investment and above all new jobs.
The Commission will provide the much-needed institutional mechanism to bring together government, civil society, business and labour to advise government on the just transition.
It will further leverage partnerships and collaboration across all relevant sectors to implement programmes that encapsulate the just transition in a coherent and coordinated manner.
In this regard, it is important to note, Honourable members, that yesterday Eskom announced it will shortly release a call for proposals to repower and repurpose Komati power station in Mpumalanga. Studies to facilitate similar initiatives are underway for Hendrina, Grootvlei and Camden.
Investment in the green economy and green technologies provides strategic advantages for our country: it opens access to new green financing opportunities; it offers the possibility of significant proven job creation; it has potential to localise production and services which will build small and medium enterprises and of course it enhances our long-term competitiveness while mitigating our transition risks.
The green industries component included in our own Reconstruction and Recovery Plan highlights the diversification of South Africa’s energy sources; retrofitting public and private buildings to improve energy and water efficiency; revitalisation of eco-tourism, hard hit by travel bans; research and development in the agricultural space of drought-resistant crops and cultivation methods; support for small farmers in the forestry space; and building the circular economy in the waste management space.
Honourable members allow me to report to this house some of the significant achievements in the green economy space to date:
2018 research, conducted by the SA Biodiversity Institute, indicated that the biodiversity economy currently creates over 418 thousand jobs across the tourism, wildlife, biotrade, bioprospecting, and the fisheries and forestry sectors.
To support rural communities adversely affected by the decline of tourism we have through the support of the Presidential Employment Stimulus created 50 000 work opportunities, almost ten thousand of which are in our national parks and involve infrastructure repairs and upgrades so that our facilities are in good shape when international tourism returns.
This year we will, through the Forestry Master Plan begin the re-capitalisation of our somewhat neglected state-owned forests. Our Department will partner with the private sector and communities in KZN, Eastern Cape, Limpopo and Mpumalanga. This initiative will result in the development of Owner Growers and co-operatives, a major transformation initiative in the forestry sector.
We are currently finalising consultation around our Section 18 Extended Producer Responsibility Schemes for the packaging, electronics and lighting sectors.
We estimate that once fully implemented these schemes will assist us to divert a hundred thousand tons of waste a year from landfills; provide secure employment to more than twenty thousand people and ensure more than seven billion rand in new investment.
Change too is coming in the manufacturing space, in July last year, Toyota announced it will start production on Africa’s first hybrid petrol-electric car at its prospection plant in Durban, as part of an R2.5-billion investment in a new production line.
This programme has created 52 600 jobs, attracted R 210 billion in investment, pumped R1.2 billion in socio-economic development initiatives in local communities and promoted 33% ownership by historically disadvantaged South Africans.
Electricity prices have dropped significantly over the four bid windows and are now below one rand per kilowatt hour. Allow me to take this opportunity to welcome the President’s announcement of two further Bid windows later this year.
To this end, we will be undertaking a series of public consultations on revising our Nationally Determined Contribution to reducing greenhouse gas emissions before submitting the final document to the UNFCCC ahead of the 26th Conference of Parties scheduled to take place in Glasgow in November this year.
South Africa will continue to work with African countries, and other partners under the UNFCCC to ensure COP26 focuses on enhancing ambition on the three goals of the Paris Agreement, namely, mitigation, adaptation and finance.
I thank you