The Effect of Response Measures to Climate Change on South Africa’s Economy and Trade
"The South African economy derives much of its growth from production related to the energy intensive sectors of its economy. As a non-Annex-I country, South Africa has no binding commitment to reduce its greenhouse gas(GHG)emissions by a quantifiable amount, but this may change in the future. The country’s dependence on coal-intensive energy generation does make it a comparatively large producer of GHG emissions globally. In this report the scenarios to be examined are broader than those examined under the FRIDGE study as it will highlight the impacts which response measures have on sectors other than the manufacturing sector, including mining, agriculture and tourism. At the outset an overview of the current energy-intensive and trade-exposed sectors of the economy are identified in Section 2. This identification is then used to establish the impact of implementing response measures to climate change on South African trade. This is done through an economic simulation analysis in Section 3. Ultimately, the purpose of this analysis is to examine the impacts of climate change response measures on trade-offs that also involve South Africa’s trade relations. In Section 5 this report provides recommendations that would offer information on response measures in the lead-up to the UNFCCC negotiations in Copenhagen, Denmark in December 2009. In the longer-term, the connections with trade and industrial policy need to be taken into account in developing national climate policy, as South Africa proceeds to define a sustainable development path that would make a transition to a low carbon economy and society."