Plan can grow green market, create jobs

Submit your comment Some 114 000 green jobs could be created in two years if the government's intention to incentivise green industries is successful.

With almost 1 million jobs shed across the economy last year, incentives for investment in industries that are designed to mitigate the effects of climate change in order to create a large number of green jobs is one of the government's responses. A focus on green jobs is part of the new industrial policy plan that is due to go to the cabinet lekgotla this month.

Sputnik Ratau, the spokesman for the Minister of Water and Environmental Affairs, said last week that the job potential for such a programme was still being refined and would depend on the economic recovery and other new and existing job creation programmes.

A study of the environmental goods and services industry in South Africa estimated that the potential market size by 2013 was between R55 billion and R69bn and the potential number of jobs was 114 000.

Existing incentives include the renewable energy feed-in tariff, under the National Energy Regulator of SA, that provides price incentives for the development of power projects that use renewable energy. The Department of Environmental Affairs recently announced a $500 million (R3.7bn) allocation from the Clean Technology Fund, for which an implementation plan is being developed.

Ratau said tax incentives for cleaner production technologies were also being considered. "The introduction of environmental fiscal incentives still requires a significant amount of work to determine its feasibility," he said.

Areas of focus that the government is considering include initiatives to encourage green buildings, greener transport options such as electric vehicles and bus rapid transit, and energy supply, including grid-connected solar power.

The green jobs proposal was still subject to internal government discussion, Ratau said, adding: "We are working towards a deadline of April 2010 where a proposal will be released for public engagement."

Sipha Ndawonde, an analyst at Frost & Sullivan, said the number of new jobs would depend on how the available funding was used, either for large-scale projects like the concentrated solar power plant or for smaller projects, such as the installation of solar water heaters by small businesses and the local manufacture of green technology.

Green jobs require specialist skills and therefore a lot of training will be needed. The challenge for the government is that creating green jobs is not just about policy but also about implementation.

The solar industry could be the launchpad for the strategy. Saliem Fakir, an independent analyst, said on Friday there were "fantastic opportunities to make some quick wins".

The biggest opportunity was solar energy, with the planned roll-out of 1 million solar water heaters to households and in the longer term concentrated solar power plants, both of which could create industrial capacity and thousands of jobs, he said.

Fakir said there was a genuine intent from the government, but the problems lay in a lack of co-ordination across different departments and in implementation.

The challenge for solar water heaters was the cost and the scale of manufacturing required. "Government has not thought through the supply side and how to create demand." He said if South Africa wanted to create green industries it had to start with local demand.

Eskom's solar water heater initiative has not yielded spectacular results, with only about 2 360 such geysers installed since the programme was launched two years ago. Existing solar geyser manufacturers do not have the capacity to produce on a large scale, which means until this is addressed, imports have to plug the gap.

Fakir said to ensure sufficient supply government could, through a tender process, subsidise selected companies to set up or expand manufacturing facilities. To generate demand, access to preferential finance - similar to the finance the government made available in the 1970s to spur demand for television sets - could provide households with the means to install such heaters.

But Fakir warned against developing a bureaucracy around solar water heaters. The market for standard electrical geysers, of which 400 000 units or more are installed a year, has no state involvement and functions smoothly.

Fakir said the state would, however, have to be involved in the development of any concentrated solar power plant.