The identification and export promotion of low–carbon environmental goods in South Africa

Abstract

Economic and environmental objectives are traditionally seen as mutually exclusive, especially in terms of higher economic growth rates that are coupled with higher greenhouse gas emissions. The first aim of this study is to find a possible creative solution, in which higher economic growth can be coupled with lower greenhouse gas emissions, also known as low-carbon growth. The literature review shows that the economic growth aspect of low-carbon growth can be achieved by increasing exports. The other part of low-carbon growth, namely lower greenhouse gas intensity, can be achieved by diffusing low-carbon technologies (or environmental goods). The World Trade Organisation also encouraged the liberalisation of environmental goods. Therefore, low-carbon growth could be achieved by promoting the production and exports of low-carbon environmental goods. Although the World Trade Organisations has encouraged the liberation of environmental goods, there is no official list of environmental goods. Therefore, the second aim of this study is to derive a list of low-carbon environmental goods from existing lists of environmental goods. Thirty-nine low-carbon environmental goods are identified for the purpose of this study. The Decision Support Model (DSM) is used to identify realistic export opportunities for these environmental goods. These low-carbon environmental goods were ranked based on three criteria: i) their potential environmental benefits, ii) South Africa’s capacity to produce these goods, and iii) their potential economic benefits. The five low-carbon environmental goods that ranked the highest are photosensitive semiconductors (HS-6: 854140), towers and lattice masts (HS-6: 730820), electrical control and distribution boards smaller than 1kV (HS-6: 853710), gearing, ball screws, speed changers, torque converter (HS-6: 848340), and static converters (HS-6: 850440). The exact environmental uses, producers, intensive and extensive export opportunities of the top five goods were discussed. The best overall intensive export opportunities according to potential iv export value are HS-6: 854140; photosensitive semiconductors (USD 922,362,000) to Germany and HS-6: 853710; electrical control and distribution boards smaller than 1kV, to the United States (USD 838,671,000). The best overall extensive export opportunities according to their potential export value are HS-6: 854140; photosensitive semiconductors to China (USD 953,255,000) and HS-6: 854140; photosensitive semiconductors to Hong Kong (USD 363,505,000). The results of this study will enable policy-makers to make optimal decisions regarding which environmental goods to produce and export.