Download Innovation, Technology and the Green Economy

Green Economy Summit
18-20 May 2010
Innovation, Technology and the Green Economy
INNOVATION, TECHNOLOGY AND THE GREEN ECONOMY
PRESENTATION STRUCTURE
 IntroductionDefining the sector: Low Carbon & Environmental
Goods and Services;
South African profile.
 Sector dynamics and priorities.
 Development support and incentives instruments.
THE ENVIRONMENTAL GOODS AND SERVICES SECTOR (EGS)
OECD definition for this sector is that,
…the environment industry “includes all companies involved in whole, or in part,
in the production of environmental goods, the provision of environmental services
and the undertaking of environment-related construction activities”.
Environmental goods and services are those “that are used, or can potentially be
used to, measure, prevent, limit or correct environmental damage (both natural or
by human activity) to water, air, soil as well as problems related to waste, noise
and ecosystems.
Some developed country economies, e.g. Canada, have established satellite
accounts for the environment within the national public accounts system.
Expanded definition:
THE LOW-CARBON AND ENVIRONMENTAL GOODS AND SERVICES SECTOR
(LCEGS)
Low carbon goods & services
Renewable energy facilities;
Energy saving devices;
Alternative fuels;
Alternative materials.
Traditional EGS
Waste collection, recycling and conversion
Waste
Management
Greenhouse
Gas reduction
Water supply
and treatment
Cleaner
production
Biodiversity
conservation
Air quality
services
Analytical
devices
Air and road
traffic noise
Water
treatment,
testing,
recycling.
Noise
pollution
LCEGS
Sustainable
resource use
and
management
Conservation
services and
products
Remediation
products
Soil
rehabilitation;
Eco-system
rehabilitation;
rehabilitation of
mines
Cultivation and processing methods in
agriculture, forestry and fisheries
South African profile

Highly industrialised country;

Fossil-fuel based, energy intensive economy;

Industry and household energy and resource use
not efficient;

High level of land degradation;

Weak track-record on waste management (land-fill
pressures whereas more recycling needed);

Fisheries under pressure (abalone threatened);

Low value-add, particularly in agro-processing.
DYNAMICS OF THE SECTOR
 CSIR and DTI 2000 study and later 2005 FRIDGE study concluded
that Environmental Goods and Services industry could generate
between one hundred to five hundred thousand jobs. No hard
evidence and possibly an over-statement of the opportunities.
 Initial background research by the HSRC in 2007 on the EGS sector
showed the sector to be characterised by two main themes.
The first theme was the universal agreement amongst
environmentalists, economists, industrialists, academics and
politicians that the sector was a strong future growth sector. [OECD
reports that global imperatives for resource efficiencies likely to
create as many new professions, companies and industries].
Note that the second theme running through all the EGS literature
was that this was a sector which was incredibly hard to map, collect
data and analyse it. This is critical aspect in terms of target setting.
SECTOR DYNAMICS AND THE ECONOMY
This sector is often described as highly complex, but it can also be seen as an
‘integrative’ sector that generates deep levels of expertise across almost all sectors
of the economy. For example, scientists, engineers, laboratory technicians, data
capturers, software developers, chemicals processing companies, power producers,
farmers and conservation biologists, investment financing companies and insurers,
are all being drawn into professions, businesses and jobs related to the EGS sector.
This is a global phenomenon and South Africa has not positioned itself to take
advantage of it. National, provincial and local government can and should structure
environmental targets and then mobilise business, job creation and skills
development opportunities around these targets. The starting point could be the
traditional waste management sector and then actions to move to a low-carbon
economic transformation. It is about economic transformation, about production and
consumption.
If government just focused aggressively, at all three tiers, on meeting environmental
targets, the base of skilled workers, engineers and new industrial growth would
surge way beyond the growth trajectories of pre-recession levels.
Government could also use this platform to ensure sustainable access to eco-system
services (e.g. water and food).
Growing the Economy and the Low Carbon and Environmental
Goods and Services (LCEGS) Sector
Accounting for the impact of economic activity on the environment and the
depletion of natural resources;
As early as 1992, the US Bureau for Economic Affairs’ produced a
paper arguing for environmental satellite accounts:‘The economy disposes of wastes into the air and water, and the
resulting degradation of the environment imposes costs, such as
lower timber yields and fish harvests and higher cleaning costs.
What are these costs? Which sectors bear them’?
Now there is a global shift towards ‘defensive expenditures’ to
offset resource degradation and depletion
Kyoto Protocol 2005:- monetising the environmental benefits of
reducing greenhouse gas emissions. This requires extensive
emissions measurement.
DEFENSIVE EXPENDITURES AND INCENTIVES
•
Scientists and economists are needed to establish baseline datasets on
natural resource stocks, to monitor changes over time in Environmental
Satellite Accounts. Many of the developed countries are transforming
their economies to perform against ‘net domestic product’ profiles. In
simple terms, this involves setting off resource depletion against GDP.
•
This facilitates measures to impose penalties against bad production or
consumption practices and to offer incentives for resource efficiencies
or resource gains from technological innovation or changes in
consumptive behaviour.
•
An economic argument can be mounted for ‘future economic benefits’
associated with land use for conservation purposes rather than for
agricultural or manufacturing purposes. This is a defensive cost to the
public purse. But it serves as a trade-off against resource losses to the
economy or ‘cleaning costs’.
•
Investments in R&D, technology development (e.g. fuel cell technology,
solar photovoltaics), and human capital development are key defensive
expenditures.
DEFENSIVE EXPENDITURES AND INCENTIVES
•
Some waste management (recycling) and energy efficiency spending
by government (e.g. provision of subsidies for solar water geysers) can
also be described as defensive expenditure by government. In many
cases the cost is shifted to the consumer (levies on water, tyres,
electricity).
•
Government spending on job creation around land and soil
rehabilitation is another example.
•
The experience in South Africa has been limited to clearing of alien
vegetation. This could be further extended to ‘re-vegetation’ job creation
activities on severely degraded land (returning the land to productive
use).
•
Incentives to industry to encourage shifts to cleaner production
methods supports efforts to meet the targets and to meet stringent
global technical requirements on environmental, health and safety
practices.
•
A mix of rewards and penalties has been favoured for shifting energy
and fuel options to lower carbon emissions.
Direction setting – conditioning economic behaviour
We need science-based information on baselines, targets and the likelihood
of impacts on development objectives (MTSF and new growth path).
Environmental targets for the
economy
Industrial
growth
Job creation
Environmental
benefits
Emissions reduction targeting

 Renewable 
energy; biofuels.
Energy Efficiency targets

limited

Resource-use efficiency targets

limited

Land rehabilitation targets
limited
 EPWP

Conservation targets
limited
 EPWP

Waste management targets



Direction setting – conditioning economic behaviour
We need science-based information on baselines, targets and the likelihood
of impacts on development objectives (MTSF and new growth path).
Environmental targets for the economy
Industrial
growth
Job creation
Environmental
benefits
Natural resource stock level targets (e.g.
fisheries)



Value-add targets



Noise abatement targets
limited
limited

Air quality targets
limited
limited

Cleaner production targets

limited

Not all EGS economic activities offer high jobcreation opportunities
Technology intensity
Disposal of hazardous waste
Waste conversion
Waste sorting and recycling
Waste collection
Labour intensity
THANK YOU