Transcript issues of concern

NATIONAL POLICY ON CLIMATE CHANGE
Mining Industry Response
Background
• The Chamber recognises that anthropogenic factors
contribute to climate change
• At a global and local level there is recognition that
meaningful action is required
• At a global level:
 The challenge is the absence of a global agreement – any “first
mover” country runs the risk of significantly undermining the
competitiveness of its carbon intensive trade exposed industries;
 In RSA’s case, the Pareto Principle applies: a small emitter like
RSA, can make large domestic progress and decimate its industry,
but its action can be dwarfed by the inaction of large emitters, eg
USA/China/India
Background cont….
• Advanced nations, whose economies are now mostly
service based have already industrialised and have the
most scope to reduce emissions
• Locally, RSA to address poverty and joblessness, still
have:
– Significant industrialisation and urbanisation processes ahead,
which requires significant energy and a larger CO2 emissions
– Access to modern and reliable energy services, like electricity, has
a profound impact on human capital development and economic
growth
– Therefore any climate change policy development must be
sensitive to RSA’s developmental needs.
Mining and Minerals Complex – Essential Core of Economy
• Backbone of RSA’s economy;
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Creates 500 000 direct jobs (+ 500 000 indirect)
Accounts for about 8% of GDP (18% with multiplier effect)
Critical earner of foreign exchange> 50%
Accounts for 18% of investment (9% direct)
50% of volume of Transnet rail and ports
• Government recognize mining, (+ manufacturing and
agriculture) as the sectors with the potential to create
employment for semi-skilled workforce
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New Growth Plan
Industrial policy Action Plan
Mining Growth Strategy
Beneficiation
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The Chamber of Mines has overtime being directly involved in both the
international & local climate change discussions.
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This involvement has been through quite a number of vehicles i.e as
part of a business collective participating in the national initiatives such
as the NCCC through BUSA.
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Ministerial round-table on the 17 May 2010 which the Chamber also
attended, set a clear signal to all South Africans about government’s
intentions to develop policy to address climate change.
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The Chamber of Mines, as part of industry, therefore welcomes the
opportunity to comment on the White Paper on climate change.
Climate Change Policy, broad issues
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The White Paper has appreciably improved from the green paper in
that it has toned down on being prescriptive and has provided for a
collective approach e.g the development of a National Carbon Budget
(NCB).
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The policy appreciates inter alia the transformational requirement of the
economy to a low carbon economy especially on industries such as
mining that are heavily reliant on coal-based energy.
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Whilst this strategic objective of the policy is appreciated, it is critical
that this transition is managed with the utmost caution.
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A shortage or quick switch to other forms of energy sources might
result in un-intended consequence on the economy e.g. job losses,
business closing down , etc as evidence from the recent shortage in
electricity
Climate Change Policy, issues of concern
•
The FRIDGE study “To Provide An Overview Of The Use Of Economic
Instruments And Develop Sectoral Plans To Mitigate The Effects Of
Climate Change” has identified the mining industry as one of the most
Trade Exposed sectors due to our energy intensive goods and a
potential climate ‘unfriendly’ foreign policy
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The policy also highlights “risk reduction and management” as one of
the key priorities. In the FRIDGE study the mining industry was
identified as high-risk (i.e. very limited options) in terms of
implementing mitigations measures
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Therefore, it is imperative that sector driven/based customised
mechanisms are developed to mitigate sector emissions and also to
‘cushion’ the possible economic impacts on vulnerable industries.
Climate Change Policy, issues of concern
•
‘Un-clear’/agreed national emissions baseline
• National GHG inventory recently updated, begun to address some of
the industry concerns on the 34%/2020 and 42%/2025 emissions
reductions baseline. This recent inventory has been ‘fully’ consultative
and has a broad support from industry
• The published discussion document on the “Peak, Plateau, and
Decline” concept as a ‘back-bone’ of a national reduction profile has to
be concluded so that there is a national consensus on a baseline and
the various emissions reduction phases.
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Subsequent to the DEA consultation with business, after the conclusion of
inputs on green paper, it was understood that the White Paper will not
include numbers, however, this is included in section 6.4 of the policy.
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The conclusion on the Peak, Plateau, and Decline discussions would have
provided a much better consulted and appreciation of the mitigation efforts
(per sector) and a smooth development of the NCB
Climate Change Policy, issues of concern
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The Chamber of Mines is still unclear and concerned around the
synergy and hence the implementation of CC policy with other related
policies
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It is not clear how the tax base, threshold or even the rate will be
developed and how this will relate to the NCB - Carbon Tax
Beneficiation Strategy
New Growth Path
IRP2
Conclusions
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The White Paper should be based on a consensus on Peak, Plateua,
and Decline
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Recently updated National GHG inventory should form the baseline of
SA’s reduction targets
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CC policy to be aligned with other government policy imperatives
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Job Creation
Beneficiation strategy
Development of the sectoral emission reductions plans, taking into
cognisance the economic implications
THANK YOU
QUESTIONS
CHAMBER OF MINES
5 HOLLARD STREET
JOHANNESBURG
TEL: 011 4987660
FAX: 011 498 7429
EMAIL: [email protected]