Speech for Mec Nandi Mayathula-Khoza

SPEECH FOR MEC NANDI MAYATHULA-KHOZA

ENVIRONMENTAL IMPACT ASSESSMENT (EIA) OPEN DAY

EMPERORS PALACE

27 SEPTEMBER 2012

Programme Director

MMC’s and Councillors Present

Our valued Stakeholders

HOD Ms Simangele Sekgobela

DDGs and Senior Managers Present

Ladies and Gentlemen,

Members of the Media

Dumelang, Molweni, Sanibonani, Good Morning, Dimatsheroni

I am truly delighted to address you at the third (3) Environmental Impact Assessment (EIA) Open Day. It is gratifying that this initiative which we resumed in 2010, as the Gauteng Department of Agriculture and Rural Development, has reached this milestone. Ladies and Gentlemen, as you would recall the purposes for the EIA Open Day is to afford us collectively, as Government and stakeholders, an opportunity to engage on the environmental impact assessment and to also afford you, our valuable stakeholders, an opportunity to give us feedback on the performance of the Department in the EIA Regulations. Another reason we hold these open days, is to further hear your concerns and valuable input on future EIA processes.

Ladies and Gentlemen, I am further delighted to be here as today also marks the launch of the State of the Environment Report (SoER), which provides an “environmental census” for the environment at a particular time for a specific area. The State of Environment Report (SoER) process will assist the Gauteng Provincial Government (GPG), specifically the Gauteng Department of Agriculture and Rural Development (GDARD), as well as other decision-makers, to make informed decisions about our environment. It is compiled to present information to the public about the condition and quality of the environment that we live in, and to inform them about what is being done to improve the environment.Details of the SOER findings will follow in the presentations to come today.

During the State of the Nation Address earlier this year, President Jacob Zuma stated: “the triple challenge of unemployment, poverty and inequality persists, despite the progress made. Africans, women and the youth continue to suffer most from this challenge.

Honourable Speaker and Honourable Chairperson as a national Cabinet, we have taken the decision that we should do more to grow the country’s economy, in order to get rid of the problems of unemployment, poverty and inequality in the country.

Those are the three things that we will face head on, this year and in the coming years.”

Programme Director, as President Zuma articulated, our country is facing a serious challenge of high levels of unemployment, gross inequality and heart wrenching poverty. These challenges happen at the backdrop of the global recession which has brought new attention to chronic structural flaws in current economic models and assumptions. As economies struggle to recover, many are taking a closer look at the broad concept of a “Green Economy,” an economy that simultaneously promotes sustainability and economic growth.

Ladies and Gentlemen, the theme for the 2012 EIA Open Day is “the Green Economy: Does it include you?”. An apt theme as the Green Economy can be thought of as an alternative vision for growth and development; one that can generate growth and improvements in people’s lives in ways consistent with sustainable development. A Green Economy promotes a triple bottom line namely:

• sustaining and advancing economic,
• promoting environmental protection and
• ensuring social well-being.

Ladies and Gentlemen, the prevailing economic growth model is focused on increasing GDP above all other goals. While this system has improved incomes and reduced poverty for hundreds of millions, it comes with significant and potentially irreversible social, environmental and economic costs.

Programme Director, sadly we realize that poverty persists for as many as two and a half billion people worldwide, while the natural wealth of the planet is rapidly being drawndown.

In a recent global assessment, approximately 60 percent of the world’s ecosystem services were found to be degraded or used unsustainably. And unfortunately worldwide the gap between the rich and poor is also increasing – between 1990 and 2005, income inequality (measured by the gap between the highest and lowest income earners) rose in more than two thirds of countries, the world over, so this is clearly not unique to South Africa and therefore requires a global outlook to tackling the issue.

Programme Director, the persistence of poverty and degradation of the environment can be traced to a series of market and institutional failures that make the prevailing economic model far less effective than it otherwise would be in advancing sustainable development goals. These market and institutional failures are well known to economists, but little progress has been made to address them. For example, there are not sufficient mechanisms to ensure that polluters pay the full cost of their pollution. There are “missing markets” – meaning that markets do not systematically account for the inherent value of services provided by nature, like water filtration or coastal protection. A “market economy” alone cannot provide public goods, like efficient electricity grids, sanitation or public transportation. And economic policy is often shaped by those who wield power, with strong vested interests, and rarely captures the voice and perspectives of those most at risk.

A Green Economy,therefore, attempts to remedy these problems through a variety of institutional reforms and regulatory, tax, and expenditure-based economic policies and tools.

Ladies and Gentlemen, the green economy is one that results in improved human well-being and social equity, while significantly reducing environmental risks and ecological scarcities. Green economy is an economy or economic development model based on sustainable development and knowledge of ecological economics.

Programme Director, the transition to a Green Economy has a long way to go, but several countries are demonstrating leadership by adopting national “green growth” or “low carbon” economic strategies. And there are many examples of successful, large-scale programs that increase growth or productivity and do so in a sustainable manner. For example:

1. The Republic of Korea has adopted a national strategy and a five-year plan for green growth for the period 2009–2013, allocating 2 per cent of its gross domestic product to investment in several green sectors such as renewable energy, energy efficiency, clean technology and water.
2. The government has also launched the Global Green Growth Institute which aims to help countries (especially developing countries) develop green growth strategies.
3. In Mexico City, crippling congestion led to a major effort to promote Bus Rapid Transit (BRT), a sophisticated bus system that uses dedicated lanes on city streets. Significant public investment in the BRT has reduced commuting times and air pollution and improved access to public transit for those less able to afford private cars. This remarkable success is now being replicated in cities across Mexico and has led to investment from the federal government in urban public transit for the first time.
4. China now invests more than any other country in renewable energy. Its total installed wind capacity grew 64 percent in 2010. This growth is driven by a national policy that sees clean energy as a major market in the near future, and one in which China wants to gain a competitive edge.
5. Namibia is managing its natural resources to generate economic, social, and environmental benefits. Local communities across the country are granted the right to use and capitalize on the benefits of using wildlife and other natural resources within the boundaries of “communal conservancies.” With an economic incentive to sustainably manage these areas, food and employment is being provided for hundreds of thousands of Namibians in rural areas. More than half of the jobs are filled by women, and wildlife populations have increased.
6. South Africa - IDC:The green economy has been identified as one of six

drivers to create five million jobs by 2020 and help drive down unemployment which is currently running at 24 percent.

In presenting his 2011 budget speech, Minister Ebrahim Patel, the Minister for Economic Development indicated that South Africa will invest 25 billion rand to support a plan to ramp up renewable energy and the green economy. The Minister indicated that this investment will create a market for significant private investment."We believe 300,000 new jobs are possible in the green economy by 2020 if we move with speed to provide the right regulatory and investment environment," Minister Ebrahim Patel told parliament.

Programme Director, as we know our country has been long criticized for its coal-reliance, and we recently unveiled plans to double energy generation over 20 years, with 42 percent of the new power supply coming from renewables.

The Industrial Development Corporation (IDC) and the German Development Bank (KfW) have partnered to make a R500-million facility available for energy efficiency and self-use renewable energy projects called the Green Energy Efficiency Fund. The Green Energy Efficiency Fund supports the IDC’s alignment to the Industrial Policy Action Plan (IPAP2) and the New Growth Path with specific focus on growing the Green Economy.

The Green Energy Efficiency Fund provides an option for bridging finance to address the funding gap between the actual investment and the process required to obtain Eskom incentives/rebates. Energy Efficiency (EE) and Renewable Energy (RE) initiatives are vital to maintain the energy supply and demand balance and to ensure energy security within South Africa. Energy efficiency must be a strategic priority for companies as South Africa moves to higher, cost-reflective electricity pricing. Mr. Mr Nico Kelder, a Senior Economist in the Department of Research and Information at IDC will expatiate on IDC initiates on this area later during the day.

Water and Environmental Affairs Minister Edna Molewa made the announcement ahead of her department's budget vote in Parliament, that the National Treasury has allocated R800-million over the next two years for South Africa's Green Fund, which aims to provide finance for high-quality, high-impact, job-creating green economy projects around the country.

Minister Molewa said the money represented a critical mechanism for achieving a just transition to a low-carbon, resource-efficient and job-creating green economy growth path in South Africa. She further elaborated that "the primary objective of the Green Fund is to provide catalytic finance for high-quality, high-impact green economy projects and mainstreaming activities which would not have been implemented without fiscal support," The Minister said it was up to South Africans to debunk the myth that environmental management hindered development, by positioning the sector as a major contributor to job creation and the fight against poverty. "The transformation of our industries towards the building of a green economy has many facets; [it is mainly] about creating new labour-absorbing industries that also mitigate impacts on the environment.

"This green economy offers substantial opportunities for job creation and development in the environmental goods and services sector, particularly in biodiversity, waste and natural resource management services."

Ladies and Gentlemen, we are further encouraged by recent developments as reported in the Business Report on 16 November 2011 that Anglo American has launched a R100 million investment fund aimed at empowering and encouraging entrepreneurs to operate in South Africa’s green economy. According to Anglo American, the Green Fund, which is Zimele’s fourth Fund, aims to make a real difference to South Africa’s environmental sustainability and economic growth, by empowering and encouraging entrepreneurs to operate in the green economy.

The Fund targets investment opportunities that specifically play a role in mitigating environmental risks and improving the long term environmental welfare of communities. Initiatives that receive funding from the Green Fund could contribute to sustainable development by many means such as reducing carbon emissions, energy and water consumption, or improving waste and emissions management.

The Fund’s main priorities are to create jobs, promote sustainable development within the communities surrounding Anglo American’s operations, manage the green agenda, and ensure the transference of green skills.

A maximum of R10 million may be allocated to each investment either in the form of a loan (repayable at the current prime interest rate) or a blend of debt and equity. Loan funds are used for working capital and capital expenditure, and must be repaid, and on time. The loan is accompanied by consistent and meaningful support, and Zimele aims to ensure that the funded businesses ultimately achieve sustainable success.

If required, Zimele will take up a minority equity position in the investee company. It may acquire equity stakes in selected businesses ranging between 10% and 49%, with commercial grounds for both entry and exit.

As with all the Zimele funds, the acceleration of black economic empowerment (BEE) opportunities is a priority for the Green Fund, and thus, it is fully committed to the development of black empowerment partners as entrepreneurs and full-time value-adding managers or operators.

In many ways, Green Economy objectives simply support those already articulated for the broader goal of sustainable development. But this new framing responds to two recent developments.First, there is a deeper appreciation today by many governments, companies, civil society and the public that we are reaching planetary limits, not just in terms of greenhouse gas emissions but also in our use of water, land, forests and other natural resources. The environmental and social costs of our current economic model are becoming more and more apparent.

Past sustainability efforts have not focused sufficiently on fixing the failures of economic policies. But we now have a chance to tackle these challenging problems given the policy openings created by the response to the financial crisis. Second, and perhaps even more important, the global recession has led to a reconsideration of key tenets of the current economic model – such as the primacy of growth and the belief in light-touch regulation. In openly questioning the strength of the status quo, many public- and private-sector leaders are seeking:

• Policies and regulations that can identify and manage financial and other risks more effectively
• New markets and industries that can create good, long-term jobs
• Public support for innovation to position a country to compete in tomorrow’s markets

Ladies and Gentlemen, one question people sometime ask is “can we afford this?” We’re still in the wake of the global financial crisis and many people perceive Green Economy solutions as expensive. The United States is asking itself whether it can afford to put a price on carbon today. Developing countries are concerned that transitioning to a Green Economy will hinder economic growth and the ability to reduce poverty.

Moreover, there will be short-term, nontrivial losses associated with changes in industry and market structure (e.g., a decline of the coal industry and related job losses.) Supporting those actors who will bear the brunt of the transition will be critical to building broad ownership for a Green Economy.

Some countries feel that they are lagging in green technology know-how and therefore will be at a competitive disadvantage in the race for future markets. Others feel that the Green Economy is a pretense for rich countries to erect “green” trade barriers on developing country exports. These are all legitimate concerns that deserve attention.

Ultimately, a hard-nosed economic analysis should inform decisions on what policies and investments to promote today. When the full costs and benefits over time are taken into account however, many Green Economy solutions will be seen as more attractive. Nevertheless, there will still be difficult choices and tradeoffs. For example, should India aggressively promote grid-connected, relatively expensive solar power when hundreds of millions in the country still have no access to electricity? And even where Green Economy solutions make economic sense, they may be politically challenging. The transition to a Green Economy will not be easy.

The principal challenge is how we move towards an economic system that will benefit more people over the long run. Transitioning to a Green Economy will require a fundamental shift in thinking about growth and development, production of goods and services, and consumer habits. This transition will not happen solely because of better information on impacts, risks or good economic analysis; ultimately, it is about politics and changing the political economy of how big decisions are made.

The problem is vested interests. Those who benefit from the status quo are either overrepresented in or have greater access to institutions that manage natural resources and protect the environment. U.S. climate legislation, for example, was defeated in no small part by resistance from fossil-fuel based energy advocates.