Transcript The ROAD TO DURban

The Green Economy
Peet du Plooy – TIPS
A driver for innovation, competitiveness and longterm
inflation control
Definition of “Green Economy”


The Green Economy consists of:
1.
Decoupling economic growth from depletion or pollution of natural
resources, including minerals, soils, water
2.
Natural resource management to ensure the integrity of natural capital or
“soft infrastructure”, particularly soils, biodiversity, forests, wetlands and
ecosystems in general
3.
Green Industries – the businesses which supply goods and services in aid
of 1. and 2.
It involves innovation in various areas including particularly:

Energy supply (renewable, nuclear) and use (appliances, smart grids)

Transport (electrification, high-speed rail)

Buildings (energy efficiency, passive design, control systems)

Agriculture (low-input)

Advanced science (biotech, nanotech, satellites)
Innovation in the Green Economy
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For climate change the central technology need is to get away from
reliance on our oldest technology: fire
“Green technology” builds on advances in existing technologies:

Photovoltaics use silicon-based technologies similar to microchips

Wind turbines modify pre-electric technology (windmills)

Electric vehicles have been around since early 1900s
Phases of development
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There is a widely held view that economies progress in their economic
development through phases of industrial growth:

Primary industries (agriculture and mining) develop first

Secondary industries (manufacturing) follow, driving growth the intermediate
stages, until finally

Tertiary industries (services and technology) dominate advanced economies
Others stress as factors the importance of institutions and rules:

competition and property rights,

science and medicine,

consumerism and work ethic
…all related to services sectors or professions.

“Developed” countries have relatively smaller contributions from primary
industries and larger from tertiary - dematerialization is a (necessary?)
characteristic of later-stage development.
Structure of South Africa’s economy
South Africa: signs of stagnation
Economic challenges: production
Limited/declining factors of production
Gold production in South Africa
Oil costs – guessing wrong (a lot)
IEA projections
WEO 2010
Capitals and their connections
Nature:
Ecosystems
Minerals
Water
Nature destabilizes
economy
(e.g. peak oil or climate
change)
Economy:
(Fixed) Capital
Production
Trade
Society:
Welfare & Rights
Intellectual & Social
Capital
Institutions
Governance:
Transparency
Contracts & Accountability
Standards & Laws
Economy destabilizes
nature (e.g. greenhouse
gas or pollution)
Real Wealth
Adjusted Nett Savings
+
+
AUS
Real Wealth Creation: Adjusted Nett Savings
BWA
50
BRA
CHN
40
EGY
DEU
30
%GNI
+
= Gross Savings – Depreciation
+ Education Spend
– (Resource Depletion + Pollution/Carbon Cost)
IND
20
IRN
KOR
10
MIC
NAM
0
RUS
YR2001
-10
YR2002
YR2003
YR2004
YR2005
YR2006
YR2007
ZAF
SWE
Priorities
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Policy identifies jobs and education as critical.
Social grants are a drain (via taxes) on the economy, but essential for
combating extreme poverty.
Poor health and education outcomes affect overall productivity of the
economy (fewer adults able to work for a smaller part of their lives)
Missing links?

Jobs require growth

Growth requires investment

Investment requires competitiveness

Competitiveness requires productivity

Productivity requires skills, work ethic, innovation, technology, infrastructure

Education (and health) are essential for productivity, but long-term

Shorter term: focus on innovation, technology and infrastructure
Priorities

SA growth is compared and tied to Africa and BRICS growth.

Africa challenge: infrastructure ($30bn/yr gap)

BRICS challenge: resources & global equity
Connected-up solutions
Inflation Control
(Cost of doing business, intergenerational and household costs)
Real Wealth
Internalize social cost,
reduce finance costs
(market failure:
commons and time preference)
Resource Rent Tax
Carbon Tax
Clean Investment
Tax Breaks
Sovereign Wealth Fund
Strategic Minerals
Knowledge Industry
Green Industry
Currency Stability
Climate Finance
Green Bonds
Integrated Planning
Universal Access
(basic services, incl. ICT, education)
Green Jobs
Payment for Ecosystem
Services
Green Infrastructure (PPP)
Feed-in Tariff
(+time of use, dispatchable DSM)
Social Wage
Renewable
Energy
Water+land management &
infrastructure
ICT/Smart Grids
Efficient appliances, (electric)
transport, processes, buildings
Regional development fund
World
Resources
Agriculture
(S)WF
Electricity
Services
Regional
Development
Fund
Rest of Africa
Infrastructure
Transfer
South Africa
Revenue-sharing