Green Economy and Climate Mitigation: Topics of Relevance to Africa

Chapter 9 - Towards climate-compliant trade regimes. The case of South Africa

Green Economy and Climate Mitigation 193 9 Introduction In October 2009, news reports in South Africa revealed that China had just overtaken the US as South Africa’s key export destination. Figures used were for the first half of 2009 (H1 2009). This chapter looks closely at the subject of climate-complaint trade regimes, addressing it holistically for South Africa. Its focus is an analysis of exports, imports and net trade, as well as the manner in which global and national climatecompliant trade regimes in South Africa’s export destinations would impact on its trade regime. China and South Africa both emit significant amounts of greenhouse gases (GHGs), and pressure is mounting to have these and other emerging economies with significant GHG emissions, such as Brazil, India and Mexico, sign up to GHG emission targets. China, South Africa and the UK have ratified the Kyoto Protocol, an international climate change regulatory framework under the United Nations Framework Convention on Climate Change (UNFCCC). Readers are referred to the author’s earlier work.1 The US, on the other hand, has been opposed to the Kyoto Protocol, putting across an argument that emerging economies like China and South Africa be given GHG emission-reduction targets. However, it is critical to note that the refusal by the US to ratify the Kyoto Protocol does not imply ignorance on its part. Several initiatives to reduce GHGs at both the federal and state government levels are Towards climate-compliant trade regimes The case of South Africa Godwell Nhamo 194 Green Economy and Climate Mitigation Towards climate-compliant trade regimes already in place.2 A detailed discussion of these and other mechanisms currently in place globally with regard to climate change regulation is outside the scope of this work. Since President Obama came into office in 2008, there has been a significant move towards joining the global fight against climate change on the part of the US administration.3 The UK, on the other hand, has been a torch bearer and champion in the fight against global warming and climate change. In 2008 the UK became the first country in the world to enact a climate change Act.4 Since the world’s eyes are now upon China, not only in terms of the huge volume of GHGs it emits, but also in terms of its growth, there is evidence of a move from hostility to partnerships by the developed north, particularly the UK and the EU. Some kind of stick-and-carrot approach has emerged to bring China into the mainstream regarding a need to reduce its GHG emissions. Technology in the fields of clean energy, clean coal and carbon capture and storage (CCS) is being piloted in China with funding from the UK and the EU. These initiatives will influence China, forcing it to change its developmental path to one that is greener and climate-compliant. This will have both direct and indirect implications in terms of China’s trading partners. China is now South Africa’s largest trading partner in terms of South African exports.5 Further details regarding the climate change regulatory regimes of the UK, US, South Africa and China are provided in Section 9.2. Two research questions are addressed in this chapter. Firstly, what climate change regulatory regimes are in place in China, the UK and the US, and what impact will these have on the future of South Africa’s export sector and business? Secondly, what measures can South Africa put in place so as to move closer to a climate-compliant import regime, particularly in response to the three import markets under review? This chapter uses secondary data, presents a literature review, and draws from an audit of climate change regulatory frameworks, particularly from the highlighted trade partners. Secondary trade data for the period 2005 to H1 2009 were retrieved from South Africa’s National Department of Trade and Industry (DTI) online database.6 Data on carbon emissions were also gathered from the International Energy Agency (IEA) for the periods 1990 and 2005. This paper focuses on South Africa’s three key trade partners. Selection of these trade partners is based on the significant volume of goods and services both exported to and imported from China, the UK and the US by South Africa. In line with the national green economy Green Economy and Climate Mitigation 195 Godwell...