International commitment on climate changeSubmission to Parliamentary Portfolio Committee on Environment23 September 2015

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Outline

• Who is BUSA• Who is the ITTCC• Overall business view on climate change• National emissions profile• Overall mitigation policy• Intended Nationally Determined

Contribution

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Who is BUSA

• BUSA is a confederation of companies and business organisations, membership of which contribute over 75% to GDP

• Membership includes mining, manufacturing, agriculture and services

• Function is to ensure that business plays a constructive role in the country’s economic growth, development and transformation and to create an environment in which businesses of all sizes and in all sectors can thrive, expand and be competitive

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Who is the ITTCC (Industry Task Team on Climate Change)

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BUSA’ s views on climate change

• Recognises the need for South Africa to transition to a lower carbon economy

• Supports a holistic climate change policy to achieve this goal

• Supports a multi-pronged approach to mitigation policy as contemplated in the National Climate Change Response White Paper

• Is committed to playing its part in reducing emissions, taking into account current dependence of the economy on fossil fuels, lack of alternatives and national circumstances of the country

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National emissions profile

• National Greenhouse Gas Inventory 2000-2010 (2014) shows national emissions 518 Mt for 2010; lower than the projected 563 Mt for 2010.

• Emissions reduction partially due to lower than projected economic growth

• Decline in carbon intensity of GDP due to sharp electricity price increases; increase in low carbon intensity electricity and improved energy efficiency by industry

• Lower emission trend likely to continue to 2021

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National emissions profile

GHG inventory updated to 518Mt in 2010

Growth in emissions remains flat until 2021 (Medupi & Kusile)

Carbon budget/allocation accommodates economic growth post 2025

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CO2e emissions per capita vs. GDP per capita

IPCC 5th assessment report Working Group 3 analysis

Population

Energy intensity of production

Carbon intensity of energy

Fossil fuel endowment/availability

Structural & technological changes

Significant parallel gains is yet to be demonstrated

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Overall mitigation policy

• Need to balance national contribution to global effort to reduce emissions and national imperatives of increasing economic growth and employment

• Key elements:› Mitigation strategy addresses

• energy security of supply

• socio-economic development

• transition to lower carbon

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› National GHG emissions trajectory range• Carbon budgets (learn as you go)

• National system of GHG and energy data and economic analysis

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Overall mitigation policy (2)

• White Paper contemplates an overall mitigation system

• Although individual elements are being developed, a holistic approach remains elusive

• A holistic approach is an essential element of the national climate change system which should provide the departure point for the national commitment to the international effort

• Imperative that national policy and international commitment are aligned and retains/enhances industry competitiveness

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Intended National Determined Contribution (INDC)

• The peak, plateau and decline trajectory has not been updated since 2007 and that a number of projections have not materialised

• Maximum flexibility needs to be built into the contribution, particularly given that the nature of the legally binding instrument is not yet known

• BUSA believes that it is essential to keep the national benchmark trajectory up to date at all times and that the updating process which should have commenced by now be urgently implemented

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Conclusions

• Projected weak economic growth and constrained electricity supply is resulting in a lower than anticipated emissions trajectory at least until 2021. The date for emissions to peak therefore needs to be extended to take into account expected the factors that have led to South Africa not achieving the projected levels of economic and thus emissions growth

• The introduction of mandatory reporting of greenhouse gas emissions is welcomed by BUSA and implementation needs to be expedited

• Detailed feedback from the negotiations in Paris should be provided

• BUSA wishes the negotiating team well in their participation in the negotiations, particularly given their challenging role as Chair of G77 and China

Thank you