Abstract
Many countries, particularly those in the developing world, are under increasing pressure to improve their growth rates in order to tackle pressing economic problems at the domestic level. Increasing export volumes can make a positive contribution to a country’s economic growth rate, but it can also endanger the environment. How to reconcile the often conflicting phenomena of increased export activity, stronger economic growth and a lower carbon footprint is the focus of this study. A core outcome of the study was the creation of a single list using a cross-section of international sources, of low-carbon environmental goods, and their ranking according to their inherent ability to reduce greenhouse gas emissions, South Africa’s capacity to produce them, and their economic benefits, as reflected in the export opportunities they present. These export opportunities were revealed through the application of the Decision Support Model (DSM), an export market selection tool that incorporates a systematic filtering and screening system. The results of the analysis should help guide policymakers in their strategic deliberations on which export sectors to incentivise and support with a view to encouraging more ‘green’ growth in South Africa in the years ahead. diffusion of such goods. If the production and export of environmental goods were to increase, it could have a potentially positive effect on economic and environmental objectives, such as raising economic growth rates and lowering greenhouse gas intensity, respectively. For the purpose of this study, an analysis of four existing lists of environmental goods led to the identification of 39 core environmental goods. These 39 goods were ranked according to three criteria: i) the potential environmental benefits of each environmental good, using consensus among role players as a proxy; ii) South Africa’s capacity to produce each environmental good, using the Revealed Comparative Advantage (RCA) of each good as a proxy; and iii) the potential economic benefits of each environmental good, using the potential export value as calculated by Steenkamp (2011) in the Decision Support Model (DSM) as a proxy. It emerged that the top five low-carbon environmental goods are: photosensitive semiconductors (HS-6: 854140); towers and masts (HS-6: 730820); electrical control and distribution boards (HS-6: 853710); gearing and screws (HS-6: 848340); and static converters (HS-6: 850440). In addition, the intensive and extensive product-country export opportunities for these top five low-carbon environmental goods were identified.
Highlights
Economic and environmental objectives are traditionally seen as contradictory, as continued economic growth puts increasing pressure on certain biophysical limits that produce symptoms like extinction, resource shortages and climate change (Czech, 2000:177)
The goods needed to be further classified according to three criteria: i) the ability to reduce greenhouse gas emissions; ii) South Africa’s capacity to produce the goods; and iii) the potential economic benefits to be derived from exporting the goods
The global economy is rapidly evolving and many countries, including South Africa, are finding themselves under increasing pressure to expand their economies in a responsible manner
Summary
Economic and environmental objectives are traditionally seen as contradictory, as continued economic growth puts increasing pressure on certain biophysical limits that produce symptoms like extinction, resource shortages and climate change (Czech, 2000:177). Greater export volumes often endanger the environment. If a country’s economic wellbeing is enhanced by an increase in exports, a strategy should be formulated that ensures that higher export volumes have, in some way, positive consequences for the environment. An increase in exports has a range of positive consequences. It stimulates the circular income-spending-production flow of an economy (Mohr & Fourie, 2008:51), thereby generating higher levels of foreign exchange for a country. Increased exports promote economic growth when they are accompanied by greater worker productivity (Abor, 2010:9), and can improve a firm’s technological base and competitive advantage (Mmieh et al, 2012)
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