1. Policies and plans Regarding Green Economy CHIETA Colloquium 13 th February 2014 Zakhele Mdlalose

2. Contents 1. RSA Economic context 2. Green Economy Definition 3. The dti response to economic development 4. Green Economy governance, policies and regulatory landscape 5. Challenges to Green Economy development and Responses thereof 6. The dti approach to Green Economy Development. 2

3. Economic Challenges 3 Consumption-driven growth path SA’s growth path has hitherto been characterised by consumption-driven sectors growing at twice the rate of its productive sectors. Financialisation & import intensity The economy has experienced extensive financialisation, but the financial sector has not supported productive sector investment; growth has been import-intensive rather than based on growth in the domestic manufacturing sector. Structural unemployment High structural unemployment has remained a constant, oscillating between 22,5% and 25% on the narrow definition.

4. Green Economy Definition Green Industry Development: New products, Components, sectors and services. Industry Competitiveness development: New ways of doing business, Innovations to produce more for less. (Sustainability) Pillars Renewable Energy, Energy Efficiency, Waste Management, Nuclear and Water Efficiency. Drivers Energy Costs (RSA) Climate change pressures and the need to respond thereof. 4

5. IPAP Transversal Interventions 5

6. Key Constituencies for Green Economy development Government Development of policies, regulations and market measures Organised labour Create and enabling investor friendly economic environment Business, and To invest in the economy to support green economy Civic organisations. Awareness creation and mobilisation for green goods 6

7. Policy Response to Green Economy development National Development Plan (NDP) Green Economy Accord Strategic Infrastructure Programme (SIP) Designation & Local Production (PPPFA) National Industrial Participation Programme (Direct & Indirect NIPP) (applies where the imported content => US$10 million) Competitive Supplier Development Programme (CSDP) Local Procurement Accord Taxation Act 7

8. RSA: Manufacturing challenges & the need for designation 8 In recent years, South Africa South Africa has been posting trade deficits primarily due to deterioration in commodities exports, high imports of fuel and high value added goods. The trade deficit amounted to R15.02bn in April 2013. Manufacturing contribution to GDP (%) Source: SARS, SARB Databases

9. The importance of local production and content 9 Goods and services bought from abroad – represents an outflow of funds from South Africa (reduces AD & local AS) – import spending is recorded as negative Goods and services sold abroad – represents a flow of funds into the South African economy (raises AD & local AS)

10. Leveraging public expenditure Supporting economic growth and creation of job opportunities in the country Attracting new investments (in particular, foreign direct investments) Reducing South Africa's trade deficit Overall savings due to lower impact of currency fluctuation (owing to high local content) and faster response time to varying demand. Consistency of supply, quality-wise - compliance with SABS - SANS 10 Policy roles in promoting green economy

11. 11 Designated sectors

12. Promote the green industry development. Local manufacturing and procurement Leverage industrial policy action plan as the support mechanism to promote green economy To support climate change responses by providing incentives to climate change mitigation, adaptation, finance and technology into the overall industrial development strategy. Environment requirements to be used as trade and investment support measures. To leverage procurement systems to ensure greening of the supply chain and services thereof. 12 How is the dti promoting green economy

13. The dti focus on green economy Renewable EnergyEnv & Energy EfficiencyNuclear -Solar Energy - Wind Energy -Biomass -Biogass -Landfill Gas -Small Scale Hydro -Small Scale Renewables -Funding of the NCPC -Strategic guidance -Energy Efficiency -Waste Mgt and Recycling -Water Treatment Efficiency -Industrial climate change response Measures -Nuclear components -Nuclear skills -Nuclear Fuels Nuclear Stds conformance Build local industry and local industry capabilities; Provide assistance to industry adaptation for technical and economic threshold; and Working with industry to formulate response to risks like carbon tax and internationally uncompetitive behavior on trade and investment.

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