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GLOBAL CLIMATE CHANGE

Home Climate Change
 

GLOBAL CLIMATE CHANGE AND THE

DEVELOPMENT BANK OF SOUTHERN AFRICA


1 - INTRODUCTION

The Development Bank of Southern Africa (DBSA) aims to maximise its contribution to development by mobilising and providing finance and expertise that focus on infrastructure to improve the quality of life of the people of Southern Africa. The DBSA’s environmental management system encourages borrowers to work actively towards the reduction and/or mitigation of negative impacts of development on air, land, water and people. The DBSA is also committed to assist in the implementation of international agreements ratified by South Africa.

This paper illustrates the extent to which the DBSA investment portfolio contributes to the implementation of the United Nations Framework Convention on Climate Change. The paper starts with a brief introduction to the causes and effects of greenhouse gases (GHGs), which are then applied to identify four basic anti-global warming approaches. This framework is used to identify and categorise projects within the DBSA portfolio with a link to global warming. The paper is concluded with challenges faced by the DBSA to further align its operations with anti-global warming requirements.

2 - GLOBAL CLIMATE CHANGE

The change in the global climatic system is believed to be caused by uncontrolled emissions of GHGs such as carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O) and chlorofluorocarbons (CFCs). These GHGs are emitted primarily through the production and use of fossil fuels, incineration of waste products, in the production and use of refrigerators and aerosols, through wet rice cultivation and the rumination of cattle. In South Africa the energy sector is the largest single source of GHGs accounting for about half the total.

Generally accepted theory indicates that increasing concentrations of GHGs will ultimately raise atmospheric and ocean temperatures. The effects of these changes include a rise in sea level and extreme weather events such as storms and floods with detrimental effects on both social and ecological systems. The anticipated impacts of global climate change on South Africa are numerous, and could be detrimental or beneficial, as illustrated by the examples provided in Annexe 1.

The diagram in Annexe 2 is a simplified GHG model that illustrates the links between the causes and effects of GHG concentrations in the atmosphere.

Following growing political awareness that the climate change problem needs to be addressed, a Framework Convention on Climate Change (UNFCCC) came into effect during 1994, aiming at the ultimate stabilisation of the greenhouse gas concentrations, implying a substantial reduction of emissions. South Africa ratified the convention in 1997, which requires South Africa to adhere to all the obligations imposed on it in terms of being a Party to the Convention. It also means that South Africa can now benefit from provisions in the Convention, including accessing international funds dedicated to mitigate climate change.

3 - ANTI-GLOBAL WARMING APPROACHES

Following the GHG model, four categories of anti-global warming approaches can be identified. These approaches are associated with the causes of GHG emissions, the effects of increased concentrations of GHGs, methods to consume GHGs from the atmosphere and initiatives to increase capacity to understand and deal with the complexity of global climate change. The anti-global warming approaches therefore include:

Category 1: Emission reduction through: (a) abatement measures like implementing technological advances, demand side management and conservation; and

(b) substituting polluters with non-polluters, such as replacing coal-based energy with renewable resources such as wind.

Category 2: Increased consumption of GHGs from the atmosphere through increasing the capacity of environmental sinks (mainly through absorption of CO2 by plants and through the soil).

Category 3: Addressing the impacts of global warming through (a) catalysing potentially positive impacts and (b) mitigating potentially negative impacts.

Category 4: Capacity building initiatives associated with global climate change.

The type of infrastructure services provided in a country does have a substantial impact on the structure of the economy and therefore also on global warming. The above framework provides the basis for identifying and categorising infrastructure projects with a link to global warming. Annexe 2 provides examples of the type of infrastructure projects within each identified anti-global warming approach.

4 - THE DBSA ANTI-GLOBAL WARMING PORTFOLIO

The current DBSA portfolio includes several projects with anti-global warming impacts, as illustrated by the following examples:

Category 1(a):

  • A large proportion of the R3,4 billion cumulative loan book on roads contributes to a more efficient transportation system thereby reducing or limiting growth in CO2 emissions through the use of liquid fuels and CH4 emissions through vehicle exhausts.
  • Electrification of underdeveloped residential areas which is the main focus of the R3,2 billion cumulative loan book on energy. Such projects often result in the abatement of emissions through replacing the use of raw coal and other high polluting domestic fuels with electricity. Energy conservation measures are generally incorporated into these projects.
  • Anti-air pollution facilities such as the Pechiney technology incorporated into the Mozal Aluminium Smelter Project in Maputo currently under negotiation with a total DBSA contribution of U$70 million.

Category 1(b):

  • Renewable energy projects include the Zambia Electrification and Rehabilitation Programme entailing, amongst others, the upgrading of the Kariba Hydroelectric Power Station with a total DBSA contribution of R210 million, and the Muela Hydropower Project in Lesotho with a DBSA contribution of R45 million. A further example is the establishment of two ‘wind farms’ in the Western Cape Province at a total cost of approximately R28 million each. Issues such as the negotiation of adequate power purchase agreements and capitalisation arrangements are currently been investigated.

Category 3:

  • Infrastructure in support of the efficient use and conservation of water amounts to a total cumulative loan book of R5,2 billion and includes projects mitigating against the negative impacts of global climate change, such as reservoirs, storage dams, the re-use of purified effluent through reclamation, water efficient equipment, the recharge of underground aquifers and other methods of rainwater harvesting.

Category 4:

  • Technical assistance and assignments related to the environment, such as the R17 million Maguga environmental study which consists of several environmental impact assessments, a comprehensive environmental management plan, as well as cumulative environmental impact and monitoring reports.

5 - FURTHER CHALLENGES

Despite the substantial anti-global warming portfolio and standard environmental management procedures followed, the DBSA recognises that further challenges exist to align its operations with anti-global warming requirements.

The first challenge is to further expand and balance the anti-global warming portfolio. Besides funding more of the same type of projects, the portfolio should also be broadened to include additional types of anti-global warming projects, especially those reducing emissions through substituting polluters with non-polluters. An expanded portfolio could focus on the following types of projects:

  • The substitution of electricity based on coal burning with other renewable sources based on for example natural gas, biomass and solar thermal power generation.
  • Public transport systems, increased use of rail rather than road or air for inter-city cargo transport and urban mass transit systems like monorail.
  • Infrastructure in support of forest conservation and afforestation.
  • Electrification for industrial purposes linked with energy conservation measures such as demand management.
  • Infrastructure in support of the protection and maintenance of unique ecosystems and biodiversity under threat of climate change. The winter rainfall area of the Western Cape, for example, may completely disappear thereby threatening the survival of a great number of species, including Cape Fynbos.
  • Infrastructure mitigating against the impact on the physical environment of the coast due to global climate change, such as shore embankment and mitigation measures associated with harbour development.

The second challenge is to align infrastructure funding with demands to restructure high polluting industries. The provision of infrastructure which would entrench unsustainable production and consumption patterns, or which would inhibit transformation towards more sustainable and competitive industries, should be avoided. In the energy sector, for example, at least three strategic initiatives are required:

  • The expansion of energy efficiency and demand-side management interventions during the provision of further electrification projects.
  • The expansion of the sustainable utilisation of renewable energy sources.
  • The introduction of more sustainable bulk energy generation option(s) over the longer term, given that further capacity may be required early in the next century.

The third challenge relates to the need for changes to the built environment like roads, dams, bridges, harbours and other low-lying developments due to increased climate variability and sea-level rise. The long lifetime and lead-in time of infrastructure extend well into the era of full potential impact of climate change. The effects of climate change will therefore have to be considered as early as the conception stages of infrastructure planning.

The fourth challenge is to develop improved understanding and to test assumptions on the interrelationship between infrastructure and global climate change. Examples include:

  • The extent to which the provision of electricity to households limits coal burning and the use of other domestic fuels.
  • The appropriate strategy for increasing carbon storage by planting more trees relative to the fact that they would probably use more of our scarce water resources.
  • The interrelationship between the transport sector and global climate change.

The fifth challenge is to ensure that the DBSA client base benefits from provisions in the Framework Convention on Climate Change, including access to international funds dedicated to mitigate climate change. This would include the design and implementation of innovative funding mechanisms.

7 - CONCLUSION

This paper illustrates that awareness and deliberate action on environmental issues such as global climate change contribute not only to sustainable development, but could also offer further market opportunities to organisations such as the DBSA.


ANNEXE 1

ANTICIPATED IMPACT OF GLOBAL CLIMATE CHANGE IN SOUTH AFRICA

(Based on LY Shackleton, SJ Lennon and GR Tosen (eds), Global Climate Change and South Africa. Scientific Association, Cleveland.)

The anticipated impact of global climate change in South Africa is illustrated by the following examples:

  • Negative implications on water resources and catchments include a reduction in the availability and quality of water and increased occurrence of floods and droughts due to changes like run-off magnitude and seasonal magnitude, increases in evaporative loss as well as changes to rates and quantities of groundwater recharge. Consideration will need to be given to aspects such as water quality management and the implementation of integrated catchment management and general water use planning. Of particular importance will be changing yields from reservoirs, changes in required size and positioning of dams, changes in evaporative loss from water surfaces and soils, and changes to ground water systems.
  • Against the background of South Africa's limited natural resource base, global climate change is likely to have a profound effect on terrestrial ecosystems, land use practise and the rate of resource degradation thereby impacting on sectors such as agriculture, forestry and nature-based tourism. Some of the envisaged alterations include distribution of species and crops, the incidence of animal diseases and pests, and an increase in the rate of species extinction. Consideration will need to be given to aspects such as the protection of unique ecosystems and the maintenance of biodiversity.
  • Global climate change could influence the marine and coastal environment by impacting on the physical environment of the coast, coastal biota, shelf and ocean systems, renewable marine resources, and especially on the built environment. Coastal infrastructure will be at risk to increased coastal erosion, flooding, saltwater intrusion and exposure to extreme storms. Coastal and marine planning exercises will have to incorporate the possible effects of global climate change. For example, deliberate infrastructure investments may be required to limit negative physical effects, including shore embankment and mitigation measures associated with harbour development.
  • The health implications include the southward spread of tropical diseases like malaria, an increase of water-borne diseases, and increased incidence of non-melanoma skin cancers.

 

ANNEXE 2

THE GHG MODEL ILLUSTRATING THE FOUR BASIC ANTI-GLOBAL WARMING APPROACHES

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ANNEXE 3

TYPE OF INFRASTRUCTURE PROJECTS WITHIN THE DIFFERENT ANTI-GLOBAL WARMING APPROACHES

Anti-global warming approach

Type of infrastructure

   
  1. (a) Emission reduction through abatement
  • Energy saving facilities and equipment
  • Upgrading and rehabilitation of power plants, transmission lines, railroads and factories for energy and resource conservation
  • Reduction of emissions from liquid fuels through more efficient road networks
  • Centralised city heating systems
  • Transportation like urban mass transit systems (e.g. subway and monorail)
  • Anti-air pollution facilities
  • Electrification of underdeveloped residential areas
  1. (b) Emission reduction through substitution
  • Conversion to natural gas
  • Natural gas power
  • Hydroelectric power
  • Biomass energy
  • Geothermal power
  • Photovoltaic power
  • Wind electric power
  • Heat generated in waste treatment
  • Solar thermal energy
  1. Increased sinks
  • Forest conservation and afforestation
  1. (a) Catalyse positive impact

(b) Mitigate negative impact

  • The protection and maintenance of unique ecosystems and biodivesity
  • Water conservation
  • Mitigation against the impact on the physical environment of the coast
  • Infrastructure in support of energy efficient sectors

4. Capacity building and knowledge creation

  • Environmental studies in support of infrastructure projects