Business

Paris climate deal: Good for the environment, bad for jobs

2016-05-16 07:00

South Africa’s signing of the landmark Paris agreement on climate change is good news for the environment, but bad news for the labour market and
the economy.

Job losses are apparently inevitable, and long-standing talks about carbon tax are again at the forefront.

According to the Paris agreement, South Africa has committed itself to begin reducing its greenhouse gas emissions in 2021. Altogether, 177 countries have signed the agreement.

However, mines and industries in South Africa rely heavily on energy sources that are not regarded as “clean” – such as coal – and now have five years to adapt so that they can meet the new requirements.

Alan Mukoki, CEO of the SA Chamber of Commerce and Industry, said: “The impact will be significant. There will certainly be job losses.

“In addition, developing countries have a handicap because we do not have all the technology that is needed to reduce greenhouse gas emissions.”

Environmental Affairs Minister Edna Molewa signed the agreement in New York on April 22. Countries have until April 21 next year to sign
the pact.

The agreement will come into force in 2020.

The main purpose of the agreement is to prevent global temperatures from rising by more than 2°C and preferably by only 1.5°C.

Every country that signs the agreement also commits itself to a proposed Intended Nationally Determined Contribution, a term used under the UN Framework Convention on Climate Change, which differs from country to country.

In terms of this, South Africa undertakes that its release of gases:

. Will slow down from 2021 to 2025;

. Will reach a plateau by 2025 that will be maintained for more or less a decade; and

. Will then begin to reduce further.

Countries that sign the agreement have until 2020 to put legislation and systems in place that will enable them to achieve their targets under the Intended Nationally Determined Contribution.

Molewa said in her budget speech in March that South Africa would follow three steps to ensure the targets were met:

. A greenhouse gas budget: All companies will receive a “quota” of how much gas they may release in that year.

. Pollution plan: Companies must submit plans on how pollution can be prevented and how the budget can be adhered to.

. Accountability: A system will be put in place so that information can be gathered on how companies are faring in terms of greenhouse gas emissions and whether they are remaining within their budgets.

Judy Beaumont, deputy director-general of the department of environmental affairs, admitted that the South African economy was already facing
many challenges.

“We cannot just add another challenge. But at the same time, we must realise that we have entered into an agreement and we must honour it. It’s about balancing development and the environment.”

According to Beaumont, it was important for South Africa to sign the agreement for the sake of the country’s international image.

If South Africa had not signed it, we would have been subject to penalties.

“However, we are not entering this without it being investigated properly,” she said.

Various talks are now taking place:

. The department of environmental affairs is engaging in discussions with industries, mines and all businesses that may be affected;

. A socioeconomic impact study is being done that will give an indication of where the government will have to help to mitigate the effect of the agreement;

. In cooperation with the department of economic development, an investigation is being done to find out which industries will be hit with job losses; and

. The department of science and technology is investigating which technologies are needed in South Africa to make the transition easier.

“The question is: if we do ever-less energy-intensive activities, what will it mean for job losses? We are trying to plan for this,” Beaumont said.

“Even though our economy is in trouble and the threat of job losses is serious, we need to start working on this.”

Meanwhile, South African companies can submit voluntary greenhouse gas budgets until 2020.

Molewa announced that such companies would be eligible for a tax deduction of 5% when the new greenhouse gas emission legislation takes effect.

According to Mukoki, we must look at how the agreement can be met without “killing industries” and causing job losses.

He agreed that South Africa should participate in the agreement. “We cannot be seen as a traitor state. We need access to the international markets. But we cannot let a problem get the better of us. If you have a flat wheel, you get a jack and you jack your car up, and if your jacket gets dirty in the process, you send it to the dry cleaners afterwards.

September 23 2018