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The Green Economy Peet du Plooy – TIPS

The Green Economy Peet du Plooy – TIPS. A driver for innovation, competitiveness and longterm inflation control. Definition of “Green Economy”. The Green Economy consists of: Decoupling economic growth from depletion or pollution of natural resources, including minerals, soils, water

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The Green Economy Peet du Plooy – TIPS

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  1. The Green Economy Peet du Plooy – TIPS A driver for innovation, competitiveness and longterminflation control

  2. Definition of “Green Economy” • The Green Economy consists of: • Decoupling economic growth from depletion or pollution of natural resources, including minerals, soils, water • Natural resource management to ensure the integrity of natural capital or “soft infrastructure”, particularly soils, biodiversity, forests, wetlands and ecosystems in general • Green Industries – the businesses which supply goods and services in aid of 1. and 2. • It involves innovation in various areas including particularly: • Energy supply (renewable, nuclear) and use (appliances, smart grids) • Transport (electrification, high-speed rail) • Buildings (energy efficiency, passive design, control systems) • Agriculture (low-input) • Advanced science (biotech, nanotech, satellites)

  3. Innovation in the Green Economy • For climate change the central technology need is to get away from reliance on our oldest technology: fire • “Green technology” builds on advances in existing technologies: • Photovoltaics use silicon-based technologies similar to microchips • Wind turbines modify pre-electric technology (windmills) • Electric vehicles have been around since early 1900s

  4. Phases of development • There is a widely held view that economies progress in their economic development through phases of industrial growth: • Primary industries (agriculture and mining) develop first • Secondary industries (manufacturing) follow, driving growth the intermediate stages, until finally • Tertiary industries (services and technology) dominate advanced economies • Others stress as factors the importance of institutions and rules: • competition and property rights, • science and medicine, • consumerism and work ethic …all related to services sectors or professions. • “Developed” countries have relatively smaller contributions from primary industries and larger from tertiary - dematerialization is a (necessary?) characteristic of later-stage development.

  5. Structure of South Africa’s economy

  6. South Africa: signs of stagnation

  7. Economic challenges: production

  8. Gold production in South Africa Limited/declining factors of production

  9. Oil costs – guessing wrong (a lot) IEA projections WEO 2010

  10. Nature: Ecosystems Minerals Water Economy: (Fixed) Capital Production Trade Nature destabilizes economy (e.g. peak oil or climate change) Society: Welfare & Rights Intellectual & Social Capital Institutions Economy destabilizes nature (e.g. greenhouse gas or pollution) Governance: Transparency Contracts & Accountability Standards & Laws Capitals and their connections

  11. Real Wealth + Adjusted Nett Savings = Gross Savings – Depreciation + Education Spend – (Resource Depletion + Pollution/Carbon Cost) + +

  12. Priorities • Policy identifies jobs and education as critical. • Social grants are a drain (via taxes) on the economy, but essential for combating extreme poverty. • Poor health and education outcomes affect overall productivity of the economy (fewer adults able to work for a smaller part of their lives) • Missing links? • Jobs require growth • Growth requires investment • Investment requires competitiveness • Competitiveness requires productivity • Productivity requires skills, work ethic, innovation, technology, infrastructure • Education (and health) are essential for productivity, but long-term • Shorter term: focus on innovation, technology and infrastructure

  13. Priorities SA growth is compared and tied to Africa and BRICS growth. Africa challenge: infrastructure ($30bn/yr gap) BRICS challenge: resources & global equity

  14. StrategicMinerals Universal Access(basic services, incl. ICT, education) KnowledgeIndustry GreenJobs Resource Rent Tax GreenIndustry Paymentfor EcosystemServices CarbonTax Currency Stability CleanInvestment Tax Breaks Feed-inTariff(+time of use, dispatchable DSM) RenewableEnergy Water+land management & infrastructure Climate Finance Green Bonds ICT/SmartGrids Efficient appliances, (electric)transport, processes, buildings IntegratedPlanning Connected-up solutions Inflation Control (Cost of doing business, intergenerational and household costs) RealWealth Sovereign Wealth Fund Internalize social cost, reducefinancecosts (market failure: commons and time preference) Social Wage GreenInfrastructure (PPP)

  15. Regional development fund World Resources Agriculture Electricity (S)WF Services Regional Development Fund Infrastructure Transfer Rest of Africa South Africa Revenue-sharing

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