AfriBusiness today raised concern that climate change interventions in the form of the new Climate Change Bill of 2018 run the risk of further weakening South Africa’s already weak GDP growth trajectory. The business interest organisation is further concerned that the bill’s potential cost on the economy had not been properly accounted for in an accompanying Socio-economic Impact Assessment (SEIA) report published by the Department of Environmental Affairs.
According to Piet le Roux, Chief Executive Officer of AfriBusiness, it is clear that the SEIA report did not take many relevant economic considerations into account. “The SEIA is rife with assertations, which jointly appear to suggest that the South African economy can easily absorb the proposed interventions with little additional cost. This certainly is not the case. The supposed benefits of the bill will likely come at high opportunity cost and losses of economic efficiency.”
“If the mitigation technologies, coercively necessitated by measures in the bill, were indeed cost-effective and efficient compared to existing alternatives, businesses would switch to these options through their own volition with proper consideration of real costs and benefits. By coercively imposing such mandates even at the threat of prison-time, one inadvertently directs money, capital and labour away from the control of entrepreneurial discretion and towards centrally-planned government dictate, which is often found to be costly and highly inefficient,” adds Le Roux.
“Interventions like these are very likely to raise the cost of commerce for many enterprises. Higher cost means losses of marginally competitive enterprises along with jobs and economic output – something South Africa with its weak GDP growth rate and high unemployment can ill afford,” says Le Roux.
Quite apart from the wide-ranging claims on climate change and its causes, AfriBusiness remains highly sceptical of the cost-benefit analysis conducted in the bill’s SEIA report. The organisation’s contention is that the cost of such wide-ranging interventions and its inadvertent increases in the cost of government bureaucracy with a further drain on the taxpayer, will be greater than is presently being put forth in the SEIA report.
“We also believe that wealthier societies are automatically more resilient and adaptive to climate change. Interventions that undermine growth and efficient functioning of the economy and especially a developing one as in South Africa’s case, certainly are not helpful in that sense,” Le Roux concludes.
AfriBusiness urged its members to evaluate the likely additional costs the bill poses on their own operations and to respond appropriately to the minister’s call for comment which closes on 8 August 2018.