1. International commitment on climate change Submission to Parliamentary Portfolio Committee on Environment 23 September 2015

2. Outline Who is BUSAWho is BUSA Who is the ITTCCWho is the ITTCC Overall business view on climate changeOverall business view on climate change National emissions profileNational emissions profile Overall mitigation policyOverall mitigation policy Intended Nationally Determined ContributionIntended Nationally Determined Contribution 2

3. Who is BUSA BUSA is a confederation of companies and business organisations, membership of which contribute over 75% to GDPBUSA is a confederation of companies and business organisations, membership of which contribute over 75% to GDP Membership includes mining, manufacturing, agriculture and servicesMembership includes mining, manufacturing, agriculture and services Function is to ensure that business plays a constructive role in the country’s economic growth, development and transformation and to create an environment in which businesses of all sizes and in all sectors can thrive, expand and be competitiveFunction is to ensure that business plays a constructive role in the country’s economic growth, development and transformation and to create an environment in which businesses of all sizes and in all sectors can thrive, expand and be competitive 3

4. Who is the ITTCC (Industry Task Team on Climate Change) 4

5. BUSA’ s views on climate change Recognises the need for South Africa to transition to a lower carbon economyRecognises the need for South Africa to transition to a lower carbon economy Supports a holistic climate change policy to achieve this goalSupports a holistic climate change policy to achieve this goal Supports a multi-pronged approach to mitigation policy as contemplated in the National Climate Change Response White PaperSupports a multi-pronged approach to mitigation policy as contemplated in the National Climate Change Response White Paper Is committed to playing its part in reducing emissions, taking into account current dependence of the economy on fossil fuels, lack of alternatives and national circumstances of the countryIs committed to playing its part in reducing emissions, taking into account current dependence of the economy on fossil fuels, lack of alternatives and national circumstances of the country 5

6. National emissions profile National Greenhouse Gas Inventory 2000-2010 (2014) shows national emissions 518 Mt for 2010; lower than the projected 563 Mt for 2010.National Greenhouse Gas Inventory 2000-2010 (2014) shows national emissions 518 Mt for 2010; lower than the projected 563 Mt for 2010. Emissions reduction partially due to lower than projected economic growthEmissions reduction partially due to lower than projected economic growth Decline in carbon intensity of GDP due to sharp electricity price increases; increase in low carbon intensity electricity and improved energy efficiency by industryDecline in carbon intensity of GDP due to sharp electricity price increases; increase in low carbon intensity electricity and improved energy efficiency by industry Lower emission trend likely to continue to 2021Lower emission trend likely to continue to 2021 6

7. 7 National emissions profile GHG inventory updated to 518Mt in 2010 Growth in emissions remains flat until 2021 (Medupi & Kusile) Carbon budget/allocation accommodates economic growth post 2025

8. CO 2 e emissions per capita vs. GDP per capita 8 IPCC 5 th assessment report Working Group 3 analysis  Population  Energy intensity of production  Carbon intensity of energy  Fossil fuel endowment/availability  Structural & technological changes Significant parallel gains is yet to be demonstrated

9. Overall mitigation policy Need to balance national contribution to global effort to reduce emissions and national imperatives of increasing economic growth and employmentNeed to balance national contribution to global effort to reduce emissions and national imperatives of increasing economic growth and employment Key elements:Key elements: ›Mitigation strategy addresses energy security of supplyenergy security of supply socio-economic developmentsocio-economic development transition to lower carbontransition to lower carbon ›National GHG emissions trajectory range Carbon budgets (learn as you go)Carbon budgets (learn as you go) National system of GHG and energy data and economic analysisNational system of GHG and energy data and economic analysis 9

10. Overall mitigation policy (2) White Paper contemplates an overall mitigation systemWhite Paper contemplates an overall mitigation system Although individual elements are being developed, a holistic approach remains elusiveAlthough individual elements are being developed, a holistic approach remains elusive A holistic approach is an essential element of the national climate change system which should provide the departure point for the national commitment to the international effortA holistic approach is an essential element of the national climate change system which should provide the departure point for the national commitment to the international effort Imperative that national policy and international commitment are aligned and retains/enhances industry competitivenessImperative that national policy and international commitment are aligned and retains/enhances industry competitiveness 10

11. Intended National Determined Contribution (INDC) The peak, plateau and decline trajectory has not been updated since 2007 and that a number of projections have not materialisedThe peak, plateau and decline trajectory has not been updated since 2007 and that a number of projections have not materialised Maximum flexibility needs to be built into the contribution, particularly given that the nature of the legally binding instrument is not yet knownMaximum flexibility needs to be built into the contribution, particularly given that the nature of the legally binding instrument is not yet known BUSA believes that it is essential to keep the national benchmark trajectory up to date at all times and that the updating process which should have commenced by now be urgently implementedBUSA believes that it is essential to keep the national benchmark trajectory up to date at all times and that the updating process which should have commenced by now be urgently implemented 11

12. Conclusions Projected weak economic growth and constrained electricity supply is resulting in a lower than anticipated emissions trajectory at least until 2021. The date for emissions to peak therefore needs to be extended to take into account expected the factors that have led to South Africa not achieving the projected levels of economic and thus emissions growthProjected weak economic growth and constrained electricity supply is resulting in a lower than anticipated emissions trajectory at least until 2021. The date for emissions to peak therefore needs to be extended to take into account expected the factors that have led to South Africa not achieving the projected levels of economic and thus emissions growth The introduction of mandatory reporting of greenhouse gas emissions is welcomed by BUSA and implementation needs to be expeditedThe introduction of mandatory reporting of greenhouse gas emissions is welcomed by BUSA and implementation needs to be expedited Detailed feedback from the negotiations in Paris should be providedDetailed feedback from the negotiations in Paris should be provided BUSA wishes the negotiating team well in their participation in the negotiations, particularly given their challenging role as Chair of G77 and ChinaBUSA wishes the negotiating team well in their participation in the negotiations, particularly given their challenging role as Chair of G77 and China 12

13. Thank you