Thu, 03 Dec 2020

It is not enough to look to a set of products or services that have some connection to "nature", involve recycling, or produce goods for eco-conscious consumers to satisfy the question of a green economy.

We might be able to persuade ourselves that we are rescuing our economy with our right hand, while, with our left hand, we are destroying it through social and environmental degradation. This penny has yet to drop.

Albeit scant, the government's Economic Reconstruction and Recovery Plan has some features that show that social partners are beginning to see the potential in environmentally sustainable activities, and one would hope that this signals a shift towards 'greening' rather than simply 'green'.

One key area in the plan is the intention to promote industrialisation through deeper levels of localisation and exports. Perhaps this challenge is best illustrated by our auto industry.

Motor industry

Locally assembled internal combustion engine vehicles consistently rank among South Africa's top five exports, earning R142 billion in 2018, and make up over 10% of all our exports. According to the recovery plan, last year South Africa produced and exported more motor vehicles than in any previous year.

Our biggest export markets are the US and Europe. These markets are shifting towards zero emission vehicles and are making plans for the phasing out of internal combustion engine vehicles - not only at country level but also at city level, examples being New York, Amsterdam, London and Stockholm.

As demand shifts to electric vehicles, producers in South Africa will have to make the transition or face losing markets, with potential impacts on all stages of the value chain. Most vulnerable in this value chain are repair and maintenance employees and small businesses, taxi drivers, and auto workers. A shrinking of the auto industry would have a devastating effect on the under-developed Eastern Cape economy, for example.

READ | How we can make electric vehicles work in South Africa despite carbon emissions and loadshedding

Last year, electric cars made up 2.6% of global car sales, with over 2.1 million sold globally, a 40% year-on-year increase. Call it green, but it is also where exponential growth lies. While South Africa trails when it comes to full electric vehicle production, we are pleased to have Mercedes-Benz manufacturing hybrid vehicles in East London, and Toyota has announced it will invest R2.5 billion in a hybrid plant in Durban.

Electric two- or three-wheelers form the greatest share of the electric vehicle fleet globally and exploding home deliveries in a Covid-19 world create an expanding market. A South African good news story is MellowVans, the very kind of SMME which the recovery plan seeks to foster. It started as a MellowCabs prototype in 2015 and has grown to employ about 30 people and counting to keep up with demand from Africa and Europe. Battery and electric powertrain manufacturing are opportunities if we would get ahead of the low-carbon curve.

To talk of energy security, vehicle-to-grid solutions could be implemented. Hybrid and electric vehicles and their batteries present an opportunity for mining of metals and minerals found in South Africa such as gold and platinum for wiring and circuitry, and for batteries manganese and deposits of rare earth oxides in the Northern Cape Zandkopsdrift area.

Green shoots

While the Department of Trade, Industry and Competition is alive to some of this, none of this gets an explicit look-in in the government's recovery plan, but the potential is there.

When it comes to addressing the priorities in the plan, we would hope that the ambition to build a new economy, based on "fairness, justice and equality" will also encompass the need to put a low-carbon future at its centre. Without this we will be destroying any developmental gains made and to be had.

In the closing words of his speech on 15 October 2020, President Cyril Ramaphosa spoke of the "green shoots" beginning to emerge in the aftermath of the economic firestorm we have experienced in this country, saying "the ashes enrich the soil, and new life takes root to replace what was lost".

One would hope that in this context, the green shoots were more than just a figure of speech.

Source: News24

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