THE ROAD TO DURBAN – PERSPECTIVES ON SOUTH AFRICAN CLIMATE POLICY AND UNFCCC COP 17 Date: Tuesday 18 January 2011, Time: 12H30am to 14H00 Venue: ippr,

THE ROAD TO DURBAN – PERSPECTIVES ON SOUTH AFRICAN CLIMATE POLICY AND

UNFCCC COP 17

Date: Tuesday 18 January 2011, Time: 12H30am to 14H00

Venue: ippr, 4th Floor 14 Buckingham Street, London WC2N 6DF

This presentation does not constitute legal advice in respect of the matters dealt with herein.

Outline of presentation

• IMBEWU Sustainability Legal Specialists (Pty) Ltd.

• South African climate change policy development.

• South African National Climate Change Response Green Paper.

• Carbon Tax Discussion Document.

• UNFCCC COP 17.

IMBEWU Sustainability Legal Specialists

• Specialist South African environmental, health & safety climate change (sustainability) legal consultancy.

• Johannesburg-based / Eastern Cape satellite office.

• In conjunction with an Attorneys firm (Warburton Attorneys).

• Wide range of South African environmental, climate change health & safety and sustainability legal advice, electronic legal registers, legal training; issues pertaining to implementation of climate change mitigation projects, e.g., CDM projects; climate change business, strategy and policy advice.

• Policy and Research Unit – collaboration with the Global Climate Network.

Sustainability Law?• “Sustainability law”:

– encompasses a variety of inter-related legal disciplines; – common theme: the constitutional imperative of securing "ecologically

sustainable development and use of natural resources while promoting justifiable economic and social development".

• Taking its direction from the Constitution Act (106 of 1996):– South African law is evolving to meet the country’s contemporary

needs. – Paramount among these:

• provide for legitimate social and economic development, • while considering the sensitivity of the natural environment to the

effects of such development; and,• including the consideration and protection of employee health and

safety.

South African Draft National Climate Change Response Green Paper

• Appeared mid-November 2010, although expected at various times

since September 2009.

• President Jacob Zuma’s statement of the country’s greenhouse emissions mitigation ambition – just prior to COP 15, Copenhagen, Denmark, December 2009 >> strategic.

• SA’s pledge to the UNFCCC (29 January 2010):

– 34% reduction against BAU by 2020 (“business as usual emissions growth trajectory).

– 42% reduction against BAU by 2020 (“business as usual emissions growth trajectory).

• Appearance of draft Green Paper just prior to COP 16 >> strategic.

Pedigree – some milestones

• September 2004 – National Climate Change Response Strategy.

• November 2005 – SA National Climate Change Conference.

• 2006 and beyond - Long Term Mitigation Strategy Scenarios.

• December 2007 - ANC Polokwane Summit

• March 2009 – SA Climate Change Policy Summit.

• May 2010 – Green Economy Summit.

Green Paper and NatCom2

• November 2010:

– Draft Second National Communication to the UNFCCC

– November 2010 – draft Climate Change Response Green Paper:

• Stakeholder comments by February 2011.

• Finalisation of White Paper by mid-2011.

• Legislative, regulatory and fiscal package ready for implementation by (end) 2012).

Climate change policy development

• Statement by South Africa to the COP13 Plenary (121207)

– “Some of our partners say that we will not get a climate deal without developing countries”.

– “Let’s be clear on that…as a developing country we will take ambitions mitigation action”.

– South Africa will contribute its fair share towards our common responsibility for the future”.

– “Our actions will be measurable, reportable and verifiable”.

– “Given the urgency indicated by science, there is no longer a plausible excuse for inaction by any country”.

Long Term Mitigation Scenarios

• Long Term Mitigation Strategy Scenarios (LTMS): key informant of policy evolution.

• Commissioned in 2006 to inform Cabinet on the available options to develop a long-term climate policy.

• Final version approved by Cabinet in July 2008.

• Two fundamental questions:

“Why should SA be concerned with the mitigation of GHG”?

“What options for mitigation are available, how much can each option reduce emissions, and at what cost?

LTMS - Aim and Goal • Aim:

“…to contribute to setting the pathway for long-term climate policy for the country

to inform SA negotiating positions…(and)…deliberations towards a legislative package which will give effect to SA policy at a mandatory level”.

• Goal:

develop a plan of action;

which is economically risk-averse; and,

internationally aligned to the world effort on climate change.

Two broad scenarios

• Scenario period: 2003-2050

• Two scenarios:

“Growth without constraints” (which shows emissions quadrupling), and;

“Required by science” (in which SA takes action to mitigate GHG, target band of -30% to -40% by 2050).

• “The growth without constraints”: assessed as not being a plausible scenario.

• The “Required by Science” scenario: the burden taken up by South Africa is not exact, but is seen rather as a target band of between -30% to -40% from 2003 levels by 2050.

Strategic options (1)

• The strategy sets out four potential strategies / options to achieve the target band, including interventions such as:

– industrial efficiency improvement,

– increased renewable energy,

– increased nuclear power,

– passenger modal shifts,

– Improvements in vehicle efficiency.

Strategic options (2)

• A detailed assessment was conducted, in respect of the first three strategic options, regarding the particular option’s:

– impacts on investment costs,

– efficiency,

– structural shift required,

– effect on GDP,

– implications for employment (job creation) and welfare (poverty alleviation).

Four Strategic Options

• Start now.

• Scale-up.

• Use the market.

• Reaching the goal (of required by science).

Strategic Options 1: “Start Now”

• “Save money while mitigating”

– Short term efficiency – approximately 9000 tCO2e reduction until 2050 (reach 43% of the ultimate goal) with no overall decline of emissions.

– Main types of interventions: policy and governmental department measures – development and implementation of policies and sectoral plans.

– Main sectors affected: industries, transport and electricity/energy related sectors.

– Main measures: improve industrial efficiency, increase renewable energy, increase nuclear, improve passenger modal shift and improve vehicle efficiency.

Strategic Option 2: “Scale up” • “Take the cost of acting into net-positive cost”

– Overall mitigation costs: 0.8% of GDP– Medium term efficiency – approximately 13 800 tCO2e

reduction until 2050 (reach 64% of the ultimate goal) with no overall decline of emissions

– Main types of interventions: regulatory (“towards zero-carbon electricity”)

– Main sectors affected: industry, transport and electricity/energy related sectors

– Main measures: cleaner coal-technology, carbon capture and storage, improve industrial efficiency, biofuels, increase renewable energy (50% by 2050), increase nuclear (50% by 2050), electric vehicles

– Ambitious transitional strategy.

Strategic Options 3: “Use the Market”

• “Get the market to work and promote the uptake of accelerated technologies and social behaviour through incentives and taxes”

– Around 17 500 tCO2e reduction until 2050 (76% of the ultimate goal) with no overall decline of emissions

– Main types of interventions: Market-based instruments – Main sectors affected: Electricity, biofuel, renewable

energy (solar)– Main measures: Carbon tax (estimated between R100 up

to R750 in 2050) and incentives [what about emissions trading?]

– Potential to shift patterns of domestic investments

Strategic Option 4: “Reaching the Goal”• Very ambitious option for which exact costs and economy-wide impacts

cannot be modeled.

• 4 main components:

New technology : investing in technology for the future

Resource identification: searching for lower-carbon resources

People-oriented measures: incentivised behaviour change

Transition to a low-carbon economy: redefining the country’s competitive advantage.

Key findings

• Start now: 43% of the way from Growth Without Constraints to Required by Science.

• Scale-up: 64% of the way from Growth Without Constraints to Required by Science.

• Use the market: 76% of the way from Growth Without Constraints to Required by Science.

• Remaining emissions wedge: Reaching the goal.

Government’s vision and programme for climate

• By July 2008 and as a result of the LTMS.

• 6 broad policy themes for climate change:

- Theme 1: Greenhouse gas emission reductions and limits

- Theme 2: Build on, strengthen and/or scale up current initiatives

- Theme 3: Implementing the “Business Unusual” Call for Action

- Theme 4: Preparing for the future

- Theme 5: Vulnerability and Adaptation

- Theme 6: Alignment, Coordination and Cooperation

Illustration - Theme 1

• Climate change mitigation interventions should be informed by, and monitored and measured against a “peak, plateau and decline” emissions trajectory, as follows:

– Greenhouse gas emissions stop growing (start of plateau) in 2020-25 at 550 MtCO2e, i.e., approximately 100 mtCO2e above current levels.

– Greenhouse gas emissions begin declining in absolute terms (end of plateau) in 2030-35.

– Long-term greenhouse gas emission level reduces to 300 mtCO2e by 2050-60.

Peak

Decline

Plateau

550

Theme 1: Greenhouse gas emissions reductions and limits

ANC 52nd National Congress: Dec07

• Polokwane Resolution on Climate Change - recognises:

– that climate change is a new threat on a global scale and poses an enormous burden upon South Africans;

– that the evidence for climate change is indisputable and that immediate action by all governments and the public as a whole is needed; and,

– the need to set a target for the reduction of greenhouse gas emissions:

• as part of our responsibility to protect the environment and promote sustainable development; and,

• to participate in sharing the burden with the global community under a common framework of action.

Polokwane Resolution on Climate Change (2)

• Support the meeting of targets through:– Energy efficiency improvements – Diversifying energy sources– Putting a price on the emission of carbon dioxide and other greenhouse gases– Further exploration and development of carbon capture and storage methods– The introduction of a tariff system that promotes the efficient use of electricity– Promotion of affordable public transport

• Mobilise the public, business and other players:– to act responsibly and save energy both as collectives and in their individual

capacity, – including through a mandatory national energy efficiency programme.

• The government, as a huge consumer of electricity, has a special responsibility in this regard.

Climate Change Policy Summit (Mar09)

• DEAT Minister’s Keynote Address

– Business is a key partner to DEAT in approaching the issue of climate change.

– For the most part, business is engaging proactively and “repositioning itself to face the changing economic landscape in a carbon-constrained world”.

– Some quarters of business “(do)…not yet fully appreciate the implications of the developing world’s commitment to a substantial deviation below baseline emission trajectories in a measurable, reportable and verifiable way”.

– Not only do proper tracking, reporting and managing of South African business emissions make business sense, but such actions will also be taken by government as “…an indicator of good corporate governance and of taking co-ownership for the future”.

– The message to business was, therefore, that “…industry must prepare itself for a new era in which mandatory reporting of greenhouse gas emissions will become part of the regulatory landscape”.

Summit (Mar09) - Main outcomes

• National climate change response policy: Discussion Document addressing:

– Analysis: SA Climate vulnerabilities, impacts and adaptation– Analysis: SA greenhouse gas emissions and mitigation potential– Analysis: SA GHG emission reductions and limits– Strategy: SA implementing “business unusual”– Strategy: “Preparing for the future”– Instrument: New technology– Instrument: Resource identification– Instrument: People-oriented measures– Instrument: Transition to a low-carbon economy– Instrument: Vulnerability and adaptation– Instrument: Alignment, coordination and cooperation

www.ccsummit2009.co.za

Summit (Mar09) – Consensus Points (1)

• Pursue “Required by Science” - <2oC.

• Transition to a low carbon economy in the context of equity, sustainable development, and poverty eradication.

• Maintain and strengthen the Science-Policy interface.

• Balance adaptation and mitigation – integrate adaptation into development planning.

• Local level climate resilience and access to energy for the poor.

• Scale up renewables and energy efficiency.

Summit (Mar09) – Consensus Points (2)

• Energy efficiency standards.

• Government coordination and policy alignment.

• Price on carbon – optimum mix of instruments requires further work.

• Fast track CDM tax incentives – done.

• Massively upscale public awareness.

• Gender mainstreaming.

• Mobilise resources including for research and development.

Final elements

• Final elements of policy evolution prior to the release of the Green Paper.

– Green Economy Summit - May 2010:

• Draft Statement of Conclusion, dated 20 May 2010, entitled Towards a resource-efficient, low carbon and pro-employment growth path which deals with a number of climate change policy considerations.

– Department of Environment Affairs, Background Information and Document to Facilitate the Climate Change Policy Engagement, 2010.

Draft Climate Change Response Green Paper

• Outline structure:

– Objective.

– Principles.

– Strategies.

– Key Sectors.

Objective (1)

• The draft Green Paper’s objective references:

– the overarching environmental objective of the Framework Convention on Climate Change,

– the Convention’s principle of common but differentiated responsibility for dealing with the consequences of climate change; and,

– the environmental right in South Africa’s constitution, as follows:

Objective (2)

• South Africa, taking into account equity and the common but differentiated responsibilities and respective capabilities of all nations, as well as the inter-generational commitment of the Environmental Right contained in Section 24 the country’s Constitution, has the climate change response objective of –

– making a fair contribution to the global effort to achieve the stabilisation of greenhouse gas concentrations in the atmosphere at a level that prevents dangerous anthropogenic interference with the climate system; and,

– effectively adapting to and managing unavoidable and potential damaging climate change impacts through interventions that build and sustain South Africa’s social, economic and environmental resilience and emergency response capacity.

Environmental Right

• Section 24 of the South African Constitution Act (No 106 of 1996):

– ‘Everyone has the right-

– (a) to an environment that is not harmful to their health or well-being; and

– (b) to have the environment protected, for the benefit of present and future generations, through reasonable legislative and other measures that-

(i) prevent pollution and ecological degradation;

(ii) promote conservation; and

(iii) secure ecologically sustainable development and use of natural resources while promoting justifiable economic and social

development.’

Principles

• The principles of Common but Differentiated Responsibility (CbDR) and Respective Capabilities.

• The Precautionary Principle.

• The Polluter Pays Principle.

• A people-centred approach.

• Informed participation.

• Inter-generational rights.

Strategies (1)

• Taking a balanced approach to both climate change mitigation and adaptation responses.

– Prioritising the development and maintenance of the science-policy interface and knowledge management and dissemination systems.

– The short-term prioritisation of adaptation interventions.

Strategies (2)

– The prioritisation of mitigation interventions that:

» significantly contribute to a peak, plateau and decline emission trajectory where greenhouse gas emissions peak in 2020 to 2025 at 34% and 42% respectively below a business as usual baseline, plateau to 2035 and begin declining in absolute terms from 2036 onwards, in particular, interventions within the energy, transport and industrial sectors; and,

» have potential positive job creation, poverty alleviation and/or general economic impacts.

Strategies (3)

– Prioritising the development of knowledge generation and information management systems that increase our ability to measure and predict climate change and, especially extreme weather events, floods, droughts and forest and veld fires, and their impacts on people and the environment.

– The mainstreaming of climate change response into all national, provincial and local planning regimes.

Strategies (4)

– The use of incentives and disincentives, including through regulation and the use of economic and fiscal measures to promote behaviour change that would support the transition to a low carbon society and economy.

– Recognise that measures taken by developed countries in their efforts to respond to climate change, including trade measures such as border tax adjustments, may have detrimental effects on high carbon and energy intensive economies such as South Africa.

– Recognise that South Africa’s response to climate change will have major implications for, both, the Southern African region and for Africa as a whole and ensure that national responses are aligned to, support and operate as part of a broader regional response.

• Primary:– Water – considered to be the medium through which climate change

impacts will be felt by most people, ecosystems and economies.– Agriculture– Human Health

• Secondary:– Energy.– Industry.– Transport.

• Other:– Disaster Risk Management.– Natural resources sectors.– Human society, livelihoods and services

Sectors

• Government as central roleplayer.

• Institutional Issues.

• Carbon Market.

• Climate Change Finance.

• Use of existing legislation, suitably amended, as a tool.

• Actual obligations on emitting industries?

Issues

• Released in mid-December 2010 by National Treasury.

• Within the context of South Africa’s country pledge under the Copenhagen Accord.

• The LTMS and the Draft Climate Change Response Green Paper recognise the need for the use of market mechanisms to price carbon so that greenhouse gas emissions can be reflected in the price of goods and services.

• Carbon tax seen as a contributor to the achievement of a low carbon growth path and is anticipated to:

– result in competitive advantages in low carbon technologies; and,

– create incentives for research, development and increased levels of innovation.

Carbon Tax Discussion Document

Carbon Tax (2)

• Three options for imposing a carbon tax are explored:

– 1. An emissions tax applied directly on measured carbon dioxide emissions;

– 2. An upstream tax on fossil fuel inputs based on the carbon content of the fuel (for example , coal); or

– 3. A downstream tax imposed on the outputs or products generated from fossil fuels (for example, electricity or liquid fuels).

Carbon Tax (2)

• A carbon tax imposed directly on all measured emissions of carbon dioxide appears to be the most appropriate.

• The second best option is to tax fossil fuel inputs such as coal, crude oil and natural gas, based on the carbon content of these fuels.

• Both options create adequate incentives to encourage behavioural changes. A tax on actual measured emissions would require appropriate institutional capacity to measure, monitor and verify actual emissions.

• Durban, South Africa, from 28 November to 9 December 2011:

• Seventeenth Session of the Conference of the Parties to the UNFCCC; and Seventh Session of the Conference of the Parties Serving as the Meeting of the Parties to the Kyoto Protocol (COP17/MOP 7):

• In the context of the international climate change negotiations South Africa is part of:

– the G 77 and China;– the African Group;– the BASIC bloc– the Major economies Meeting;– the G8 +5,– (recently invited to become a member of the BRIC group).

Towards COP 17

Beyond COP 17

• One year until the end of the First Kyoto Commitment Period.

– What of a notional second commitment period?

• On the cusp of Rio + 20.

• A year prior to the last COP of the first commitment period (Qatar)

• ??...

Contact Details

Thank You

Andrew Gilder BA LLB LLM (Marine and Environmental Law)

Director: IMBEWU Sustainability Legal Specialists (Pty) Ltd.

53 Dudley Road, Corner Bolton Avenue, Parkwood, Johannesburg, 2193

Tel: +27 (0)11 214 0660, Fax: +27 (0)11 880 6577,

Mobile: +27 (0)82 962 2520

http://www.imbewu.co.za & www.imbewuregisters.co.za