By Saliem Fakir · 9 Dec 2009
The mention of green jobs salivates the eager tongues of politicians seeking quick answers for dismal economic prospects. Green jobs have become the new panacea for joblessness and a ‘pathway out of poverty’.
Statistics dazzle and sometimes flail the timid heart. Countries that have used the recession to kick-start a new industrial opportunity have seized on the idea of the green sector as a strategic choice. It has also helped them save jobs given the rapidity with which other sectors have been shedding jobs. In South Africa, we lost one million jobs this year as the recession made its way through our economy, but we haven’t been able to substitute these job losses with anything meaningful as some countries have done.
The green economy offers some quick answers and there are others, which will take time, as they will need some forward planning and strategic choices.
The strategic choice to be made is to use a green recovery programme as a ladder into a new energy economy -- one based on lesser and lesser reliance on fossil-based fuels. This should be the core reason for arranging a stimulus package for green programmes, especially in the energy sector.
The latter part of a green recovery will take us a generation or so to achieve. Much of this green recovery will involve shifting the energy intensity of the economy, diversifying the energy mix towards low carbon solutions, planning for better buildings and cities, shifting the nature of mobility, changing industrial processes and ultimately producing green products and services.
These initiatives lend themselves to mobilizing low-skill jobs as well as redirecting high-skilled jobs into new areas of enterprise and innovation. They will require investments in new skills.
The world over, every country that has had the means, including the United States (US), which lives beyond its means, has used the green sector to stimulate growth.
There are two ways of seeing the green recovery. Firstly, to expand and enhance existing initiatives to a scale that allows jobs to be preserved where other sectors are busy shedding jobs by taking advantage of programmes that are job intensive.
And secondly, to open new vistas of opportunity within the economy by directing spending in areas that have been neglected as a result of the crowding out of investment in these areas.
There are short-term things that need to be done as well as deeper development of the sectors that will require a long period of gestation before industrialisation takes off. There has been constant talk of South Africa de-industrialising as a result of the global meltdown. A green recovery can support reindustrialisation.
Many countries realise that if they don’t go the green recovery route now they will never be ahead of the curve or be able to catch up with other leaders in the field. There is no better time than a crisis to make hay while some slumber or respond to the financial crisis with a certain bewilderment and procrastination.
What is most interesting about these countries’ responses is how fast they have moved. It’s taken a matter of months for some to gear up action in the direction of a recovery programme. It is to be granted that many of these countries had the resources to do so.
However, what is important is how they see the future and how they use the current crisis to beginning building a new foundation for the future.
Both China and the US have used the green sector to drive their recovery programmes. Of the $700 billion or so the US allocated to the fiscal stimulus, just over $100 billion will be used to drive green sector growth. The US based Political Economy Research Institute estimates that 1% per year of US GDP in clean-energy investments and other parts of the green economy can lead to 1.7 million net jobs.
Most of this will be used to undertake weather-proofing, energy efficiency programmes, building new high speed rail systems, as well as improving the uptake of renewables like wind energy and smart-grid development.
China has seen the light. It has grand ambitions to be the leading manufacturer of renewable technologies. It is also leap-frogging automobile technologies. In ten years, China hopes to be the leading manufacturer of electric cars. It is already the largest producer of solar water heating systems. It has used both the drive to reduce electric energy consumption and its mass consumer base to create economies of scale.
China plans to have a huge share of the clean-technology market and even control of some green technologies by controlling key resource inputs, being the manufacturing hub of the world. It also wants to begin to acquire keystone intellectual property through greater involvement of its state enterprises in the development of these technologies.
The Chinese strategy to grow green or clean technologies is being backed by strategic mineral acquisitions. China already controls the world’s supply of rare earth metals, which are strategic elements that are key to the development of new green technologies. The control of rare earth metals can give them certain market advantage and even dominance.
The Chinese model is based on two reinforcing strategies: shift the national economy to a low carbon footing and use this shift to become a world player in low carbon technologies and goods.
South Africa published its national “Response to the International Economic Crisis” framework document early in the year under then caretaker President Kgalema Montlanthe.
Within the response strategy were a few meagre lines mentioning the need for a green recovery programme -- a paragraph to be exact (paragraph 3.6). The wording was vague and had seized on the right platitudes doing the rounds.
Nonetheless, those who have been campaigning for years for green sector growth and job creation meet every bit of policy signage with some delight.
But we are recurrent witnesses to bold policy statements and excitement, which is usually followed by a gaping hole between ideal and implementation.
Part of the problem is that South Africa’s response to the crisis came just before the 2009 elections. In the transition to a new government, no transitional presidency was willing to make policy commitments until the post-election cabinet and presidency settled into the business of governance.
Then of course we discovered that our economy was not in such good shape anymore. There was destruction of growth and a ballooning budget deficit that made the financing of any recovery programme subject to the government increasing its public debt burden.
Elements of the public investment programme of R787 billion will require deficit spending and in the case of Eskom’s New Build programme, require the utility to borrow money to cover the shortfall.
We don’t need to mimic China or any other country. We can do small things but do them well. We can do a few things rather than many to get started.
What is critical is the idea of singularity of mission – single-mindedness for the idea, effective co-ordination and using the public sector to bring about levels of scale that then stirs the citizenry into action.
One of the reasons we don’t have a clear green recovery programme has a lot to do with poor planning and policy co-ordination. The second is capacity to implement. Not all the public sector institutions perform to the levels of competence that we would like them to.
Since the drafting of the response to the economic crisis, a clear green recovery and investment programme is yet to be developed. Elements of a green recovery initiative are being shaped, but exist in parts and in different departments and government agencies.
But they all need to be brought within one ambit so that early winners are picked and strategic choices made such that state resources are not wasted.
Recently, the Minister of Energy, Dipuo Peters, announced that the government has developed a framework for the rollout of one million solar water heaters (SWHs) by 2014. This is not a new plan but a repackaging of a previous target, which Eskom is currently implementing.
The programme, so far, has been quite dismal. About 1,000 SWHs have been delivered in 18 months.
Eskom had set itself the target of rolling out one million SWHs in three years. Some sceptics piped that there were not sufficient installers of SWHs in the country. With current capacity it would take 15 years for the one million SWHs to be installed.
So there is no guarantee that the repackaged plan will lead to any improvement in Eskom’s record. Perhaps the problem here is that on small-scale energy technologies like SWHs, the state should avoid creating a bureaucracy to administer the rollout and empower citizens to gain access to preferential finance so they can do the job themselves.
We are too state-centric when it comes to elementary issues like this. Normal geysers, of which 400,000 units or more a year are installed in residences and business, have no state involvement in their rollout. Seemingly, this is happily going on and a system is already in place.
Why not use the existing system rather than invent a new state agency, as planned by the current SWH Framework?
There is no need for a state army to be reviewing applications, instructing contractors and administering red tape. This would be the death of the SWH industry.
There are elements of the green recovery that require state-centric approaches, like large infrastructure or the use of procurement policy to drive economies of scale.
But there are elements of green recovery like recycling, weatherproofing of homes or the installation of SWH systems that is best done with the mobilisation of the citizenry.
There is a danger and it is already evident that the conception of the green recovery programme or fractured elements of it are seen as stopgap measures rather than a new beginning for South Africa’s economy, laying the pathway not only out of poverty, but also to a low carbon economy.
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Empowering the People
I think that our problem is a government mindset problem. That is why there is no out of the box thinking by government when it comes to matters green.
As I see it people in government are still locked into the ANC anti-apartheid mind set which saw South Africa