It’s the economy, stupidFraming a conversation on the green economy

NCPC Industrial Efficiency Conference July 2015

Acknowledgements

The prefix we put before the word economy reflects our bias: “It’s the economy, stupid”

We are all in effect trying to communicate the same simple idea – the economy we have is not delivering the outcomes we need.

A major aim of this project is to establish some frameworks that enable us to meaningfully engage in a conversation about economic transition and the impacts on the whole economy.

Does the green economy include jobs or not? The futility of the definition debate.

Source: UNGC, CEO Survey, 2013

An economic principles framework, currently being tested with stakeholders and subject to review, provides a basis for us to structure quantitative discussions about the trade offs of particular interventions

1. Efficiency – minimise the financial and natural resources required in production and consumption

2. Resilience - withstand variability in social, economic and environmental conditions

3. Preservation of natural capital - halt and reverse the decline in natural capital

4. Social equity - minimise barriers to participation in the economy

5. Job creation – maximise the number of people in employment

6. Growth - Create new economic opportunities

7. Governance – Ensuring a transparent and effective system of governance

In order to transform our economies we will need to produce and consume goods and services very differently

Source: LaunchCapital, Megatrends InfoGraphic

The size of the prize is significant, US$350 billion across Africa

To drive progress we need collaboration across business, government, labour and civil society

Business leaders across Africa have told us that this new era of sustainable business will not be ushered in by individual companies operating alone — it will require collaboration amongst industry, governments and NGOs to pool their capabilities to achieve a brighter future for all.Source: Reimagining Africa’s Future, NBI and Accenture, 2015

Source: UNGC, CEO Survey, 2013

A missing party to this conversation is the finance sector

The state of finance in South Africa is complicated by relatively low levels of private equity and venture capital

Sweat Equity

Grants

Venture Capital

Concessional Debt

Private Equity

Cormmercial Debt

Stage of Project Development

Leve

l of A

ctiv

ity/F

undi

ng

The state of finance in South Africa is even more complicated for smaller enterprises

Sweat Equity

Grants

Concessional Debt

Commercial Debt

Stage of Project Development

Leve

l of A

ctiv

ity/F

undi

ng R500 millionIt is particularly challenging for small businesses who are seeking to borrow/invest smaller amounts of money, the threshold for a large investment bank to really engage with a project

The success of REIPPPP is an example of the benefits of getting this correct

R170 billion private sector investment at a March 2015

The NBI aims to drive a multi-stakeholder discussion to identify additional areas of investment and developing collaborative solutions to unlocking investment in these areas

A major output of the literature review phase is a framework of conversation tools that can be used to drive similar conversations in any economy

The conversations we have facilitated so far:

110

122

Workshops held to date

People attended

Durban

Johannesburg

Cape Town

61

Over 60 Different Institutions

2 Pretoria

The emerging priority areas identified requiring innovation and collaborative solution development

• Industrial Symbiosis• Waste to Energy• REIPPPP Expansion• Smart Grids and Meters• Energy Efficiency• Rooftop Solar• Energy Storage (Batteries)• LNG expansion• Protecting South Africa’s

High Altitude High Value Catchments

• Restricting water losses in municipalities

• Acid mine drainage treatment

• Waste water management• Municipal capacity

building• Small scale manufacturing• Road to rail switching• Public transport• Small scale farming and

food systems

What is needed is governments, business, labour and civil society working together to propose solutions

Phase 1: Research Phase

Phase 2: Intervention Discovery

Phase 3: Solution

Development and Barrier

Identification

We are here, join us and share your views

For more details please contact:

Steve Nicholls  Lead: Climate Change, Green Economy and Water  SteveN@nbi.org.za  Tel: +27 11 544 6000 Cell: +27 83 786 5058 Web: www.nbi.org.zaTwitter: @NichollsSteve