Economics of Climate Change in South Africa
South Africa has made a conscious effort to move towards a green economy as part of the country’s long term plan to grow the economy while mitigating the effects of climate change. South Africa is committed to a low carbon growth path over the long-term which is part of the nation’s action to contribute to the global effort to reduce greenhouse gas emissions.
The country’s green economy growth path addresses economic growth without exposing future generations to environmental risks. Under its robust Long-Term Mitigation Scenarios (LTMS), it is agreed that emissions would peak around 2020 to 2025, plateau for a decade and then decline in absolute terms from around 2035. South Africa is taking concrete actions that will see its carbon emissions 34 per cent lower in 2020 than they would have otherwise been and 43% lower in 2025.
South Africa aim’s to structurally transform its economy from an energy-intensive to a climate-friendly path as part of a pro-growth, pro-development and pro-jobs strategy. The Medium-Term Strategic Framework, guiding government's programme from 2009 to 2014, aims to further explore the concept of “green jobs”.
Increasing capacity in green technologies and industries that combat the negative effects of climate change will create new employment opportunities.Hi-tech innovations required for green industries will help employment grow over the long-term, as new technology spreads throughout the economy and transforms other, larger sectors.
The renewable energy industry is expected to create about 300 000 jobs over ten years, with 20000 jobs in the next two years. These figures include jobs in the construction, manufacturing, and operation and management of power plants covering solar, bio fuels, small hydro, and pyrolysis technologies.
Should South Africa be able to capture 2% of the estimated global green economy in the next five years, we can expect to create up to 400000 jobs in energy, manufacturing, agriculture, mining and services. The global move into a low carbon, resource efficient and sustainable economy has a potential to create a large number of jobs across the economy.
Recently the South African Treasury introduced an ad valorem carbon tax on new passenger cars which was the start of South Africa’s environmental fiscal reform. The carbon tax on vehicles was payable from September 2010 and ranges from 0,6% to 4,1%, depending on how much the cars emit. The tax is part of the country’s initiative is to influence the composition of South Africa’s vehicle fleet to become more energy efficient and environmentally friendly.