Schneider Electric executives collaborate with other sustainability leaders on how to deliver tangible actions on the most pressing global sustainability challenges
Schneider Electric, the leader in digital transformation of energy management and automation, will join other sustainability leaders to support and accelerate the common fight against climate change at the One Planet Summit. Two years to the day after the adoption of the Paris Agreement, and following COP23, President of France Emmanuel Macron is organizing the milestone summit to convene those involved in public and private finance to deliver ambitious and achievable actions that will contribute to limiting global warming and its impact.
Jean-Pascal Tricoire, Chairman & Chief Executive Officer, Schneider Electric said: “Prosperity and energy are intertwined. For Schneider Electric, contributing to the process of achieving carbon neutrality is an ambitious and productive challenge that deserves the joint commitment of the public and private sectors. Schneider Electric is aligning its strategy and its activity with this essential outlook of the 21st century.”
To mark the occasion of the One Planet Summit, Schneider Electric is accelerating its ambition and commitments for climate that supports the company’s objectives to reduce its plants and sites carbon emission and to become carbon neutral by 2030 in a coherent industry ecosystem encompassing both suppliers and clients. The pledge is based around three complementary initiatives:
- Before 2020, outline a specific trajectory based on the assumption that Earth will breach the 2°C warming limit by 2050 and validate it through the Science-Based Targets initiative, in which Schneider Electric has been involved for one year, and increase the impact of Schneider Electric’s internal carbon price. Schneider Electric has already set a goal of cutting CO2 emissions by more than 50% in absolute value by 2050 compared to 2015.
- Achieve for 2030, and add to, the 10 commitments presented at COP21 in 2015 in order to build carbon neutrality within Schneider Electric’s ecosystem and specifically quantify the carbon impact of 100% of its major customer projects (see above).
- Starting today take action and, to ensure full transparency, monitor whether Schneider Electric has achieved its targets through the quarterly publication of its Planet & Society barometer and in connection with major open coalitions. These commitments are accelerating the results already obtained and disseminated through Schneider Electric’s four barometers since 2008; for example, its energy intensity was cut by 42% between 2005 and 2017, and the carbon intensity of its logistics was reduced by 35% between 2012 and 2017.
The One Planet Summit will also see Tricoire and other Schneider Electric executives collaborate with other sustainability leaders on how to deliver tangible actions on the most pressing global sustainability challenges across a series of events and roundtables (see above). Schneider Electric will also announce several new commitments that will maintain the company’s leading position at the forefront of sustainability efforts including:
- RE100: Schneider Electric has joined RE100, the global collaborative initiative, led by The Climate Group, announcing its commitment to 100% renewable electricity use by 2030;
- EP100: By joining the EP100 initiative, also led by The Climate Group, Schneider Electric has committed to double its energy productivity against a 2005 baseline, setting an ambitious target to doubling the economic output from every unit of energy consumed;
- Livelihoods Carbon Fund: Together with Crédit Agricole, Danone, Firmenich, Hermès, Michelin, SAP, and Voyageurs du Monde, Schneider Electric has launched a new impact investment fund, with a target of 100 million euros. The fund aims to improve the lives of 2 million people and avoid the emission of up to 25 million tons of CO2 over a 20-year span.
As a global leader at the crossroads of the energy transition and the digital transition, Schneider Electric is focusing on intelligent control, active distribution management and energy consumption. Schneider Electric is committed to bringing solutions to market that will increase the flexibility of both industrial production and all energy fields and applications.
Schneider Electric’s aim is to improve usage comfort and safety while sharply cutting – at the lowest cost – energy consumption and carbon emissions in keeping with the new landscape of decentralized, carbon-free and digitalized energy production. Because access to energy is a fundamental human right, Schneider Electric also intends to innovate to help the one billion people on the planet who do not have access to energy and the 10% of inhabitants facing energy insecurity, by developing affordable and reliable low-carbon solutions.
Schneider Electric agenda at the One Planet Summit and its side-events
|Dec. 10||01:00pm – 05:00pm||Conference – Access to climate finance: the priority proposals of non-state actors
w/ Gilles Vermot-Desroches, SVP Sustainability
10 rue des Prairies 75020 Paris
|Dec. 11||08:00am – 09:00am||Media Conference – French Business Climate Pledge
w/ Jean Pascal Tricoire, Chairman & CEO
55 avenue Bosquet
|09:30am – 10:45am||Roundtable – Solving the Urban Equation
w/ Jean Pascal Tricoire, Chairman & CEO
55 avenue Bosquet
|10.45am – 12:00pm||Roundtable – Create a dynamic solutions
w/ Gilles Vermot-Desroches, SVP Sustainability
55 avenue Bosquet
|02.30pm – 07.00pm||Conference –#TechForPlanet (by NUMA) – Scale Solutions for Climate
w/ Emmanuel Lagarrigue, Chief Strategy Officer
5 parvis Alan Turing 75013 Paris
|04.50pm – 05.30pm||Roundtable – Renewable solutions connected to the electricity grid: what evolutions, what financing, what obstacles, how to change scale to stay below the 2 ° C threshold?
w/ Gilles Vermot-Desroches, SVP Sustainability
|Maison de l’UNESCO
125 Avenue de Suffren
|07.00pm – 08.30pm||Launch Party – Launch of a new Livelihoods Carbon Investment Fund
w/ Gilles Vermot-Desroches, SVP Sustainability
11 Rue Montgolfier, 93500 Pantin
Updates announced to 2015 commitments and progress achieved to date
|2015 – 2030 commitments||Completion 2015–2017 (expected projection)|
|1||Quantify the carbon impact of 100% of its major customer projects (2015–2017)||100%|
|2||Design 100% of new products and services in line with Schneider Electric ecoDesign Way™ and generate 75% of product revenue with Green Premium™ (2015–2017)||ecoDesign Way: 100%
Green Premium: 75%
|3||Avoid 120,000 tones of CO2 emissions by implementing “end-of-life” product services in compliance with the principles of the circular economy (2015–2017)||+ 150,000t of CO2|
|4||Facilitate access to lighting and communications for 50 million people at the bottom of the pyramid within 10 years through low-carbon solutions (2015–2025)||5 million households|
|5||Build micro-grids to improve flexible usage and reduce impacts||In progress|
|6||Offer SF6 gas alternatives within 5 years (2015–2020) and no longer use SF6 gas in Schneider Electric products within 10 years (2015–2025)||In progress and ahead of schedule|
|7||Reduce Schneider Electric’s energy intensity by 3.5% annually (2015 and beyond)||10%|
|8||Cut CO2 emissions from transportation by 3.5% annually (2015 and beyond)||12%|
|9||Invest €10 billion in innovation and R&D for sustainable development over the next 10 years (2015–2025)||+ €3.5 billion|
|10||Issue a “climate” obligation to finance low-carbon R&D||Issued in October 2015|
About Schneider Electric
Schneider Electric is leading the Digital Transformation of Energy Management and Automation in Homes, Buildings, Data Centers, Infrastructure and Industries.
With global presence in over 100 countries, Schneider is the undisputable leader in Power Management – Medium Voltage, Low Voltage and Secure Power, and in Automation Systems. We provide integrated efficiency solutions, combining energy, automation and software.
In our global Ecosystem, we collaborate with the largest Partner, Integrator and Developer Community on our Open Platform to deliver real-time control and operational efficiency.
We believe that great people and partners make Schneider a great company and that our commitment to Innovation, Diversity and Sustainability ensures that Life Is On everywhere, for everyone and at every moment.
Natural solutions such as tree planting, protecting peatlands and better land management could account for 37% of all cuts needed by 2030, says study
Planting forests and other activities that harness the power of nature could play a major role in limiting global warming under the 2015 Paris agreement, an international study showed on Monday.
Natural climate solutions, also including protection of carbon-storing peatlands and better management of soils and grasslands, could account for 37% of all actions needed by 2030 under the 195-nation Paris plan, it said.
Combined, the suggested “regreening of the planet” would be equivalent to halting all burning of oil worldwide, it said.
“Better stewardship of the land could have a bigger role in fighting climate change than previously thought,” the international team of scientists said of findings published in the US journal Proceedings of the National Academy of Sciences.
The estimates for nature’s potential, led by planting forests, were up to 30% higher than those envisaged by a UN panel of climate scientists in a 2014 report, it said.
Trees soak up heat-trapping carbon dioxide as they grow and release it when they burn or rot. That makes forests, from the Amazon to Siberia, vast natural stores of greenhouse gases.
Overall, better management of nature could avert 11.3bn tonnes of carbon dioxide emissions a year by 2030, the study said, equivalent to China’s current carbon dioxide emissions from fossil fuel use.
The Paris climate agreement, weakened by US president Donald Trump’s decision in June to pull out, seeks to limit a rise in global temperature to “well below” 2C above pre-industrial times.
Current government pledges to cut emissions are too weak to achieve the 2C goal, meant to avert more droughts, more powerful storms, downpours and heat waves.
“Fortunately, this research shows we have a huge opportunity to reshape our food and land use systems,” Paul Polman, CEO of Unilever, said in a statement of Monday’s findings.
Climate change could jeopardise production of crops such as corn, wheat, rice and soy even as a rising global population will raise demand, he said.
The study said that some of the measures would cost $10 a tonne or less to avert a tonne of carbon dioxide, with others up to $100 a tonne to qualify as “cost-effective” by 2030.
“If we are serious about climate change, then we are going to have to get serious about investing in nature,” said Mark Tercek, chief executive officer of The Nature Conservancy, which led the study.
Image: “Planting trees is one of the best ways to harness the power of nature to cut carbon emissions, says study”. Photograph: Ben Curtis/AP
The so-called Enki stove was made by the Italian firm of the same name. It’s a biomass stove, which can cook anything under the sun while converting the fuel materials into biochar. It was created for camping adventures, but it would do equally well for picnics and backyard cooking.
The biomass stove comes in two versions, namely Enki Wild and Wild+. It is a so-called pyrolytic stove, since the fuel materials aren’t burned directly, but rather first converted into gas that is then burned. For this reason, it can also be called a gasifier stove, and it creates a smoke-free flame. It’s also designed to be fed small biomass scraps such as twigs and bark. Furthermore, the waste material it produces can also be successfully used for carbon sequestration and building healthy soil. It is not, however, meant to be an indoor, daily-use stove alternative. However, for barbecues, camping trips and picnics, it’s an excellent choice, and much better than charcoal or gas fed cookers.
These stoves aren’t solely biomass-fueled though, since they require a small fan, which regulates the airflow into the combustion chamber. This fan is powered by a battery, which can be charged using a solar charger. The fan is intended to draw the gas created by the biomass, and move it to the top of the stove where it is burned. The fan is also used to regulate the size of the flame, and can be controlled through a USB cable. The battery for the basic, Wild model (10,000 mAh) yields 50 hours of cooking time on a single charge.
The Wild model is 8.46″ high and 5.9″ in diameter (21.5 cm high and 15 cm in diameter) and weighs 2.86 lb (1.3 kg). The fuel chamber has a capacity of about half a pound (200 grams) as measured in wood pellets. According to the company it can be used to cook for up to four people. The Wild+ model, on the other hand, can be used to cook for larger groups. It measures 13.97″ by 9″ in diameter (35.5 cm by 23 cm), and weighs 5.95 lb (2.7 kg). It can hold a maximum of 1.5 lb (900 grams) of fuel.
The Wild model costs about $238, while the larger, Wild+ model will set you back $362.
The Global Wind Energy Council published its Global Wind Energy Outlook report this week, outlining scenarios which show how wind energy could supply 20% of global electricity by 2030.
Specifically, the report outlined ways in which wind power could reach 2,110 GW by 2030, supplying up to 20% of global electricity while simultaneously creating 2.4 million new jobs, reducing carbon emissions by more than 3.3 billion tonnes per year, and attracting annual investments of €200 billion.
“Now that the Paris Agreement is coming into force, countries need to get serious about what they committed to last December,” said Steve Sawyer, GWEC Secretary General. “Meeting the Paris targets means a completely decarbonised electricity supply well before 2050, and wind power will play the major role in getting us there.
“Wind power is the most competitive option for adding new capacity to the grid in a growing number of markets,” Sawyer continued, “but if the Paris agreement targets are to be reached, that means closing fossil fuel fired power plants and replacing them with wind, solar, hydro, geothermal and biomass. That will be the hard part, and governments will have to get serious about it if they are to live up to the commitments to which they have now bound themselves.”
Looking back, the GWEC report concluded that the annual installation of wind energy in 2015 reached 63 GW, bringing the cumulative total up to around 433 GW. China was unsurprisingly the leading market for wind again, and has been since 2009. The global wind industry is currently set out across more than 80 countries, of which 28 have more than 1 GW installed.
The report presents outlook scenarios through to 2020, 2030, and 2050, based on the International Energy Agency’s New Policies Scenario from the World Energy Outlook as its baseline. The Outlook also provides two other scenarios, with the GWEC’s Advanced Scenario being the “most ambitious” and outlining the “best case” scenario for wind.
“Decarbonising the global energy system includes the transport sector as a major emitter of carbon,” added the report’s lead analyst Dr. Sven Teske, Research Principal for the Institute for Sustainable Futures at the University of Technology Sydney.
“The market for electric mobility, both in regard to electric vehicles as well as public transport, will continue to grow significantly and with this electricity demand for the transport sector. Wind power is in a pole position to supply this future power demand making the wind industry one of the key industries of the energy sector.”
As climate change brings unpredictable weather, droughts, floods, heat waves, cold spurts, and a general sense of chaos to the world of agriculture (and, well, the world, in general), one element is a little more mysterious.
Researchers from around the globe, led by Delphine Deryng, an environmental scientist at Columbia University, took a look at one curious element amongst all the disaster. Increased carbon dioxide levels are heavily associated with climate change, and it’s certainly no shocker that carbon dioxide levels are rising due to all kinds of human activities. But plants, we all learned in elementary school, actually love carbon dioxide: They take it in and expel oxygen, right? So does that mean, even if plants can’t save us, that at least they’ll be happy?
It turns out: sort of! An explanation of how this works, from the study’s release:
The concept is relatively simple; plants take in carbon to build their tissues, and if there is more carbon around, they have an easier time. Leaves take in air through tiny openings called stomata, but in the process the stomata lose water; with more carbon available, they don’t have to open up as much, and conserve moisture.
The study takes into consideration an excess of carbon dioxide in the air and tries to figure out how that would affect the planet’s four main crops: maize, wheat, soy, and rice. This turns out to be more about water than a simple more-carbon-dioxide-means-more-yields connection; the study finds that all four crops will take in more carbon dioxide and use water more efficiently by 2080, but not that we will necessarily see higher yields.
According to these calculations, the study predicts that wheat fields fed by rain, including those in North America, could defeat increased heat and water scarcity stress and actually produce more yields. Irrigation-fed wheat, as in China and India? Nope—still screwed. Corn yields will decrease everywhere, and the jury’s still out on rice and soybeans (the study found that some projections show an increase and some show a decrease).
This study is not, of course, saying that climate change will be good for crops. The inherent unpredictability of the change makes it exceedingly difficult to expect much of anything to go right, let alone to predict it. But it is demanding that we look at all possible effects of climate change, and take note that this is all much more complex than “the planet is heating up.”
Progress in reducing carbon intensity in the travel and tourism industry can be attributed to several actions, according to a new report by the World Travel and Tourism Council (WTTC).
“Our report notes that the impacts of climate change are already beginning to be experienced with lower crop yields and more intense storms and heat waves.
The overall warming across the past three decades has been concentrated in oceans, leading to expansion that is eroding coastlines and increasing sea levels. It is also leading to acidification, which threatens marine life,” David Scowsill, president and CEO of the WTTC, told Fin24.
“The confluence of these factors may result in serious socio-economic ripple effects, which will bring challenges to food supply, health problems, displacement of people, increased poverty and geopolitical conflicts related to energy and natural resources.”
The latest report shows that many large role players in the industry have already improved their carbon efficiency by 20% in the last ten years and are on course to reach the target of a 25% reduction by 2020.
According to the report the global travel and tourism industry has made strong progress with accountability and responsibility, for instance, particularly in admitting to the challenge of tackling climate change and setting out plans to address and measure it.
WTTC members also demonstrated community engagement, charitable contributions, disaster relief or conservation efforts – deforestation in particular – while others focus on preserving coral reefs, hosting bee colonies on rooftops, managing waste, or ensuring sustainable sourcing.
The report, which comes in the run up to the COP21 climate change talks in Paris at the end of this year, also found that most travel and tourism companies now have branded sustainability programmes, often including customer engagement programmes. Most WTTC member companies have achieved green certification of some type.
Greening supply chains is another aspect WTTC members focus on, developing practical tools to help procurement from local small and medium-sized enterprises (SMEs) as part of this.
“While the sector has grown, added more jobs and contributed billions of dollars to economies all over the world, we have seen real commitment to sustainability from business as companies innovate and collaborate with others to reduce their overall impacts.”
In his view the next 20 years will be characterised by the industry fully integrating climate change and related issues into its business strategy, supporting the global transition to a low carbon economy, strengthening resilience at a local level against climate risks, promoting the value of responsible travel, and greening entire supply chains.
“To reach these long term goals, much still needs to be done across travel and tourism and other sectors, but we now have a common understanding and are ever-closer to agreement on the global actions necessary,” said Scowsill.
The WTTC report outlines five priority areas for the travel and tourism industry to support the overall target of halving emissions by 2035.
The first is to integrate climate change and related issues into business strategy. This can be done by disclosing climate change issues in mainstream financial reporting, utilising recognised frameworks and collaborating to harmonise the approach for disclosure within the industry.
Secondly, the leading practice of establishing an internal price of carbon, focusing on renewables for new investments, seeking low carbon financing mechanisms, contributing to local economies with carbon mitigation and catalysing the economies of scale to create a virtuous circle, must be followed.
The value that local natural and cultural heritage has for travel and tourism and forging partnerships to build resilience against climate risks, is the fourth priority area stipulated in the report.
Fourthly, travellers must be provided with the tools to be responsible travellers and be offered new experiences tied directly to low carbon solutions.
Last, there must be engagement across the value chain by focussing efforts on the biggest opportunities to reduce carbon emissions through mechanisms such as supplier screening and local procurement.
“Travel and tourism is in a unique position to build consumer awareness of the world’s key supply chain threats by engaging travellers to link the destinations they visit with the issues back home in their own purchasing decisions as consumers and professionals,” the report states.
Carbon markets around the world are continuing to expand and gather momentum, according to a series of case studies released by IETA, Environmental Defense Fund (EDF) and CDC Climate Research today, despite diverse challenges.
The case studies – released at Carbon Expo in Barcelona – find that while countries such asKazakhstan, Norway and New Zealand are opting for market-based carbon pricing systems, each system is tailored to suit the national circumstances.
Case studies on carbon markets and pricing in Australia, Brazil, the EU, Japan, India, Tokyo,South Africa, the UK and Switzerland have also all been updated, to reflect the latest in policy developments in these regions. Each case study identifies unique challenges and lessons learned for each market, such as how forestry could be handled in an ETS, addressing competition concerns and moving away from free allocations.
The World Bank estimates that the world’s emissions trading systems are now valued at $34 billion.1 A report by the International Carbon Action Partnership earlier this year found that jurisdictions with an ETS now represent 40% of global GDP.2
“This collection of work showcases how different governments have used market forces to curb emissions, tailored to their unique circumstances,” says IETA President and CEO Dirk Forrister. “As we increasingly move towards a bottom-up world of climate policy, these case studies offer an array of models that others can borrow from. They show that carbon markets can work for all regions, all circumstances and all economic structures.”
“It is highly encouraging to see the growth and development of carbon markets around the world,” said Gernot Wagner, Lead Senior Economist at EDF. “As more governments implement innovative and effective market systems, we are beginning to see the needle shift on global climate policy.”
“There is a growing consensus on the fact that carbon pricing is becoming a priority among economic decision makers around the world – the big question is how to put a price on carbon,” says Benoît Leguet, Director of CDC Climat Research. “These case studies provide a fantastic collection of experiences that can be extremely useful to share government experience and inform the implementation of these innovative climate policies.”
He adds: “Whatever their stage of maturation, each system has to overcome important challenges to ensure the credibility and the stability of the system and the emergence of a robust and predictable carbon price signal.”
1 The World Bank’s valuation is based on the price of allowances in all ETSs on 1 April 2015 multiplied by the allowance volume for 2015. See Carbon Pricing Watch 2015, released by the Bank on 26 May for more information.
2 See the ICAP Status Report 2015 for more information.
Source: Press Release
Turn off at the switch. Your laptop doesn’t need to be plugged in 24/7, and leaving the charger in the wall with the power on will increase your electricity usage. Turn off chargers, appliances such as kettles, and other equipment like printers. Make sure all computers are turned off at home time. Check the plugs before you leave to make sure things aren’t plugged in overnight using unnecessary electricity and costing you extra money.
Go paperless. We have a whole article dedicated to this, which you can read here,but in summary: encourage emailing, use scrap paper for writing things down, store invoices and accounts online, try to avoid printing, and if you must print – do it double sided.
Use recycled materials for your packaging. If you pack products then use recycled and recyclable materials for your boxes, wrapping and so on. For printers, use remanufactured cartridges instead of originals. They are much cheaper and better for the environment too.
Consider your lighting. Switch to energy efficient bulbs, keep blinds and curtains open instead of turning on the lights, or just use a desk lamp in the evenings.
Water can also be very expensive, and water scarcity is becoming a major problem. Don’t waste this precious resource. Make sure to fix any leaky taps, and don’t allow taps to be left running. Consider installing motion sensors for your taps to reduce water consumption. Turn down the temperature of your water heater – keep it as low as you can in order to meet the needs of your business.
Climate control can be expensive. Africa can get very hot, so we see the appeal in air conditioning, but first try opening windows or using a fan. In the winter wear extra layers and keep doors and windows closed to retain the heat. Also keep the curtains or blinds open during daylight hours to let the sun warm the room. If you really need to use air-con or heating, do it sparingly. Set the thermometer to room temperature (around 24 degrees or so) rather than very hot or very cold, and don’t use the air-con overnight when nobody is there. Either turn it off manually or set it to turn on and off at pre-selected times (and temperatures!).
Tell any suppliers that you are interested in buying “green” products and reducing your carbon footprint. Buy products that have been recycled or refurbished. You can stretch this as far as your office furniture as well – buy secondhand, or furniture made from biodegradable or recycled materials.?
Book your seat here for the Green Business Seminar taking place at Sustainability Week on 25 June 2015
Follow Alive2Green on Social Media
The carbon tax will have a serious negative impact on the goods-producing sectors of the economy, particularly mining, manufacturing and agri-processing by making the country less competitive in the global economy.
Econometrix submitted a report on the 2013 update to the Integrated Resource Plan (IRP) for Electricity, IRP 2010 to 2030.
We have updated the report and it spells out the damage the carbon tax would do to the local economy. Included in the report is comment on the futility of introducing a carbon tax or any other envisioned carbon tax-trading scheme.
The exception to this has been the US, where greater use of gas has led to a slowdown in their growth in carbon emissions.
The annual growth increase of China’s carbon emissions has been 520 million tons a year over a ten-year period compared to South Africa’s total annual carbon emissions of 440 million tons in 2013.
A saving of 20 percent in South Africa would amount to 88 million tons but India’s annual growth in carbon emissions over ten years exceeds 90 million tons a year.
Any decline in the growth of carbon emissions in China and India is unlikely in the period up to 2030 as they continue to pursue economic growth.
Furthermore, the argument regarding global warming has changed considerably over the pastfew years. The global temperature has not increased materially for more than 18 years.
Econometrix is not an expert in this field but it would appear that there are extremely strong arguments and indications that the impact of man-made global warming has been vastly exaggerated. Certainly, South Africa should not be leading the pack in curbing its own carbon emissions at substantial economic and personal cost when the rest of the world is flagrantly disregarding the same set of rules. This is particularly true when South Africa’s likely contribution to any reduction in carbon emissions will be less than measurable.
Passing on costs
A carbon tax will increase the costs of electricity and the products of many important industries. These costs will be passed on through price increases to business and consumers. Downstream business and industry will be faced with these increased costs and will in turn pass these costs on to its consumers.
Certain industries will be faced with a carbon tax of their own and in turn their increased electricity costs and carbon tax costs will also be passed on to their consumers and users of their product.
Ultimately, demand will decline as the price increases faced by consumers will reduce their disposable income. In the case of export industries trading in the global competitive market they will either face a decline in demand and/or reduced prices with resulting lower returns. In turn, imports would become more competitive and import sensitive industries would suffer.
The complex impacts of unnecessary real price increases would result in a further deterioration in the current account of the balance of payments, already at an excessively high level.
Furthermore, there would be a decline in the return on investment of the affected business and real investment would decline. At present, it is already running at below required levels capable of sustaining an acceptable economic growth rate.
Each industry would need to be examined on its merits. An example of the damage it could cause would be the motor vehicle industry. Current exports total more than R100 billion an annum and total employment exceeds 100 000. The competitive damage to this industry alone could be significant.
Econometrix has calculated the economic impacts of these effects. The carbon tax would slow gross domestic product (GDP) growth by 0.4 percent a year, resulting in a 6.5 percent reduction in the size of GDP by 2030, or R350bn, and a reduction of almost 1.4 million in the number of jobs available.
The number of dependents affected is therefore estimated at almost 5 million. This is a sizeable effect on an economy with a population estimated to be approaching 70 million by 2030.
Significantly, it will reduce the cumulative taxes collected by 2030 by R750bn due to the slower growth. It will require a large and costly bureaucracy to run this complex, cumbersome and highly inefficient tax. The reduction in taxes is likely to be greater than the net taxes that will be collected.
The argument that the tax will be neutral because this money will be funnelled back to develop the green economy must be treated with great suspicion.
There are a number of economic arguments that strongly suggest that this will not be the case.
It amounts to a tax on existing industries and effectively a subsidy for new ventures many of which are less efficient with higher cost structures.
It consequently will foster higher costs and inflation. Bureaucracy is not the best means of fostering economic efficiency.
This is the task of market forces in order to develop a more efficient and effective economy. The experience overseas supports this argument. For example, there are substantial question marks regarding the policy and Germany’s “Energiewende” is a well-documented case in point.
Electricity prices there are the highest in Europe because of the move to renewables and that the development of the new transmission grid has fallen well behind schedule resulting in localised rolling power cuts and has required substantial unforeseen investment.
As a result, certain key electricity-intensive industries are considering moving to the US.
It is worth noting that Germany is in the process of building a number of coal-fired power stations to correct the imbalance that renewables have caused for electricity supply.
Finally, carbon tax and higher prices of the large input cost increases from electricity price increases runs contrary to the country’s own beneficiation policies, where some companies are now expanding elsewhere because of the non-competitive electricity costs in this country. It is noteworthy that one of South Africa’s key global competitors, Australia, has scrapped plans to introduce such a scheme.
Damage to potential
Econometrix has recently estimated that South Africa should, with the correct policies and adequate and secure electricity growth, have a potential sustainable growth rate of GDP of 4.1 percent a year.
As a result of a number of policy issues, insufficient security of supply and non-competitive prices of electricity, the carbon tax and the switch to more costly renewables and other investment adverse policies, the sustainable GDP growth of South Africa is unlikely to exceed 2.5 percent a year .
This will have a detrimental impact on the country’s goods producing industries, particularly mining, mining beneficiation, manufacturing and its agri-processing sectors.
By 2030, this would result in GDP being R1.4 trillion less than what should be achieved, while employment levels could be roughly 5 million lower than the levels actually possible and required.
Carbon tax will play a substantial role in this poor economic performance, which will have a detrimental effect on the standard of living, unemployment and the social and political structure of South Africa.
More particularly it would make the country’s important goods-producing sector less competitive.
This will cause further structural problems for the current account of the balance of payment, which already has a substantial deficit.
In the latest global competitiveness report, out of 144 countries, South Africa has fallen to 113th in terms of its labour market efficiency, 89th on its macroeconomic environment and has fallen 11 places to 56th in the overall competitiveness index.
The carbon tax will only exacerbate these trends. Most importantly it will more than likely result in a further deterioration in South Africa’s sovereign rating with serious consequences to South Africa’s cost of capital, ability to raise capital and its ability to attract foreign investment.
Rob Jeffrey, is the managing director and senior economist of Econometrix
Follow Alive2Green on Social Media
In addition to registering significant growth in the number of wine cellars calculating their carbon emissions, the South African Fruit and Wine Industry Confronting Climate Change (CCC) initiative has, over the past year, noted increased interest from other commodity groupings, such as grains and vegetables, in the initiative’s carbon emissions calculator.
“The CCC has also registered overall growth in the number of carbon emissions datasets received for its benchmarking process, as well as increased interest in the high-quality data that has been collected and reflected in the CCC benchmark reports,” says CCC project manager Anél Blignaut.
The CCC initiative, launched in 2008, focuses on agriculture, including citrus growers, wine growers and wine cellars, and aims to encourage information sharing and to ensure the availability of an on line carbon emissions calculator that growers use to accurately calculate their carbon footprint.
In calculating the agriculture sector’s carbon footprint, the user assesses several factors, including but not limited to yearly electricity consumption figures, the litres of diesel used by vehicles and equipment and the amount of fertiliser and plant protection products used. It consists of three phases in which the initiative encourages participants to calculate their carbon footprint. Phase I and II have been completed.
Phase III of the initiative, which builds on Phase II, will run until January 2017, with the CCCcontinuing to strengthen its mandate and its endeavour to promote the continued uptake of the emissions calculator, says Blignaut.
Key focus areas of Phase III include strengthening the capacity and skills across the fruit and wine industries through both technical and train-the-trainer workshops to support users in the calculation of their carbon emissions. Further support outside the workshops is also provided. Phase III also aims to strengthen the industry benchmark database across all commodities through focused regional technical workshops.
Blignaut adds that this phase also places greater emphasis on underrepresented regions to ensure that more growers participate and to support emerging farmers in being able to calculate their carbon footprint.
The CCC is also investigating the addition of a carbon sequestration calculator.
“We are working with the Department of Agriculture to adapt the existing carbon emissions calculator for mixed small-scale farmers to ensure that their needs are addressed and that they can also calculate a quality carbon footprint,” says Blignaut.
The carbon sequestration calculator will also assess several factors, such as land rehabilitation, clean technologies and soil carbon. The tool is expected to be made available by midyear.
“This will enable producers to calculate their above- and below-ground carbon stocks. As many workshop attendees are requesting whether their carbon footprint can be offset by certain activities on their farms or along their supply chains, the carbon sequestration tool will be used in conjunction with the carbon calculator to determine the net carbon emissions,” explains Blignaut.
Source: Engineering News
Book your seat here.
Follow Alive2Green on Social Media