GLOBAL CLIMATE CHANGE
GLOBAL CLIMATE CHANGE AND THEDEVELOPMENT 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 DBSAs 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:
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 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 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 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.
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:
THE GHG MODEL ILLUSTRATING THE FOUR BASIC ANTI-GLOBAL WARMING APPROACHES