The Strong Social Case for a Green Economy after COVID-19

An informative GreenCape panel discussion with Reshmi Wolvers (Senior Energy Analyst), Jack Radmore (Energy and Finance Programme Manager), Wilberforce Chege (Senior Energy Analyst) and Cilnette Pienaar (Head of Communications and Publishing), highlighting the social case for including a ‘green economy’ focus in South Africa’s post-Coronavirus recovery efforts.

Cilnette introduced the topic and the team.

The global economy has been heavily impacted by Covid-19, and while immediate health concerns prevail, there’s a multitude of economic recovery packages being rolled out globally, nationally, and regionally. There’s a strong call to #buildbackbetter around the world: to use this pandemic as a generational window of opportunity to collectively pivot towards economic growth paths that are environmentally sustainable, financially profitable, and socially responsible.

GreenCape exists to drive the widespread adoption of economically viable, green economy solutions in Africa. We focus on unlocking the investment and employment potential of green technologies and services, in order to support the transition to a green economy. Jack Radmore heads up our Energy and our Green Finance Programmes, Reshmi Wolfe is a Senior Energy Analyst primarily responsible for the Alternative Service Delivery Unit (ASDU), and Wilberforce Chege is a Senior Energy Analyst and a pioneer in the sustainable mobility space.

Cilnette asked Jack to elaborate on the phrase ‘a just transition to a green economy’.

From an international perspective, the ‘green economy’ basically refers to an economic system that is low carbon and less resource intensive. What makes the South African green economy different, is that we’ve added social inclusivity and financial resilience to that narrative. It is important to recognise the growth potential that the green economy brings to a developing economy. The word ‘just’ comes into play when an economic system transitions from a carbon fuel-based economy to a green economy. We need to have interventions and structures in place that protects workers’ ability to earn an income.

Over the last ten years, GreenCape has facilitated almost R40 billion worth of investments and about 20,000 green economy jobs in South Africa. Yet there is so much more that the water economy, the energy economy and the waste economy has to offer in terms of driving job creation, social investments, and economic growth in the South African context.

Cilnette mentioned that in 2019 South Africa saw a record number of service delivery protests, and that many people are experiencing obstacles to being economically productive. She asked Reshmi to explain ASDU’s approach to service delivery challenges by sharing a practical success story.

The Alternative Service Delivery Unit (ASDU) was established to design, facilitate and manage the provision of energy services to unserviced and unserviceable communities on behalf of the relevant stakeholders. We realised that to successfully achieve modern service delivery in these communities, the projects need three elements: to be socially inclusive, to have customised technical design, and to be financially sustainable. In other words, the communities have to be included in the process of determining the solutions,  the solutions need to be built specifically for the need in that context, and the solutions need to be affordable not just for the service provider or for the funder, but also for the communities.

As an example, we’ve been working in a community called Witsand in the Western Cape since 2017. When we started out, it was a tricky space to navigate: people were violently protesting because of a lack of service delivery in their area. But when the municipality responded by asking, “How many people live in your community? What services do you currently have?” they didn’t have the answers. So with the approval of the leaders in the community GreenCape started to gather information for them. We employed local volunteers to go to their neighbours and collect the data, before verifying the data with the leaders and finding out which issues they saw as a priority. This is an important step, because you can’t rely on data alone to present a true reflection of a community.

In Witsand, it became clear that the lack of lighting was a major problem, so a local service provider called ThinkWiFi responded by installing wi-fi enabled solar-powered street lights. The impact has been incredible: 11,000 people can now use this free wi-fi system to access the Internet, respond to job adverts, or start small businesses. Adequate lighting means that they can trade later into the evening, children can do their schoolwork, and there has been an overall reduction in crime. This one process of addressing lack of service delivery ended up solving many other problems, which is what ASDU is all about.

Cilnette commented that partnerships are fundamentally important to the green economy, and asked Wilberforce to mention some of the emerging opportunities in the sustainable mobility space.

Thinking about transport is essential when you think about a sustainable green economy. Transport accounts for 12%–70% of the direct greenhouse gas emissions in South Africa, depending on where you live. One of the effects of lockdown has been a significant decrease in the levels of carbon dioxide, nitrogen oxides and particulate matter in the atmosphere. As we try to #buildbackbetter, we have to start harnessing some of these environmental gains, and so the City of Cape Town has embarked on an ambitious programme to be carbon neutral by 2050. Sustainable transport is a key pillar of this programme, and includes active mobility, walking, cycling, non-motorised transport, electric vehicles, fuel cell hydrogen vehicles, and public transport.

Let’s focus on electric vehicles for a moment. The fact that our public transport accounts for 40% of the energy used in the transport sector means that the electrification of public transport, and the manufacturing of electric vehicles, are two viable opportunities for South Africa. Vehicle manufacturing is a labour-intensive industry that can create thousands of jobs. These vehicles are powered by lithium-ion batteries, which account for almost half the cost of the vehicle, and a key raw material for these batteries is manganese. South Africa has the largest reserves of manganese in the world. For hydrogen vehicles, the key resource for the cathode of the fuel cell is also produced in South Africa. So that’s two more viable opportunities. If we produce the batteries and the vehicles locally, they will become cheaper and more accessible to a wider range of society.

Jack highlighted that Reshmi and Wilberforce had touched upon two important points: that economic development relies on service delivery, and that the green economy is a value chain.

Service delivery is the foundation for economic development. Without effective service delivery within an urban or rural space, there is no opportunity for economic development. So these entry points (whether it’s wi-fi systems, or solar street lights, or one-litre flush toilets, or home solar systems) represent entry points into communities onto which additional interventions can be built. Once a community of 11,000 people has adequate lighting and reliable access to Internet, you can start thinking about things like education. Why are 80% of these kids not in school? How do we run education platforms on this wi-fi access? How do we start local businesses in and around these areas that are now illuminated at night?

Often in the green economy we think about the end states: we think about that i3 BMW or that solar panel on the roof. But the green economy is actually a whole value chain. It’s the thousands of jobs that can be created in the manufacturing and industrialisation of the green economy. I think those are important points to remember when we talk about the green economy.

Cilnette responded by asking Jack if he had R1 million rand (or more), where he would invest his money in the green economy.

If I had to pick three things that every single city in every single country is going to face within the next five or ten years: the first would be a shortage of water, the second a shortage of landfill space for waste, and the third would be the energy crisis. So all three of those markets represent significant opportunities: worldwide, we’re seeing massive investments going into new energy generation, into water reuse structures, and into waste conversion.

But if I had to invest a R1 million, I would invest in local manufacturing for the renewable energy industry. Government is currently putting in place protocols and regulations that are incentivising large renewable energy programmes to buy from local manufacturers. I believe over the next 5 –15 years as that programme grows, it will prove to be a highly profitable opportunity that will also have a positive impact on the South African economy.

In closing, Cilnette asked Reshmi to why companies should include green metrics in their Corporate Social Investment (CSI) portfolio.

Green metrics respond to a company’s environmental impact, their social impact, and their financial business case. It speaks to what impact they want to achieve and the short, medium and long term, and it speaks to the nature of that impact.

For example, Company A spends R600 a month (R7,200 a year) to feed a family of four for that period. This family still doesn’t have access to electricity, they still can’t use lights to study at night, they still can’t keep their phone on long enough to respond to calls for jobs. Company B spends R5,000 once-off for a single solar home system. This family now has access to lighting so their children can study and they can work at night, they have better security, they can charge their phones, and they can divert what they were paying for candles and paraffin to other channels. Funding the solar home system supports other small businesses too: creating jobs for the people manufacturing it, installing it, maintaining it. That means money is circulating, which creates more opportunities. Is Company A or Company B having the most impact?

Cilnette thanked the team for their contributions, and thanked Nation Builder for the opportunity.

This panel discussion took place at Nation Builder’s 6th annual In Good Company conference in September 2020, looking at how we can all ‘Be the ReGeneration’ after the global COVID-19 crisis.

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