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THE NATURE OF WORK: Regeneration of our consumption degeneracy THE PARIS EFFECT: Reshaping the global environment THE GLOBAL PANDEMIC: Through a sustainable lens ECONOMIC GROWTH: Investing in infrastructure

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NEWS & SNIPPETS

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SPECIAL REPORT

n overview of The Paris Effect report A that provides insight into how the Paris Agreement (2015) is reshaping the global economy and our zero-carbon trajectory

14 ECONOMY

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Taking financial stock of the Covid-19 pandemic through a sustainable lens

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THOUGHT LEADERSHIP

Urban Analyst, Llewellyn van Wyk, offers perspective on why consumption and production patterns matter

28 INFRASTRUCTURE

Economic recovery in South Africa hinges on urgent action and innovation

32 INFRASTRUCTURE

GBCSA reflects on the drivers behind their new Safe Return to the Workplace guide, published in conjunction with Zutari

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STORAGE

Sodium-Sulphur batteries extend the life of renewable energy projects

38 PROFILE

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Forestry South Africa explains how trees form a major part of South Africa’s green economic response to the pandemic

40 FOOD SECURITY

How modern agriculture grew up to be the unlikely hero, by Wendy Green

44 WATER

The significant work that the Gamtoos Irrigation Board is doing to combat the dire water shortage in the Eastern Cape

46 ENERGY

The symbiotic power of the wind and agricultural sectors

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PUBLISHER’S NOTE 2021 will start with a very loud bang as far as the green economy is concerned in South Africa: the long-awaited round five of REIPPPP is set to be released in January, and the preferred bidders under the REIPPPP will be announced in February.

When reviewing the RMIPPPP RMIPPPP bidders bidders published by the IPP Office, one can see the beginnings of two significant developments within the energy sector in South Africa and regionally: 1. Gas industrialisation; 2. Energy storage/renewable energy hybrid projects.

These developments are potentially foundational when viewed within the context of a vision for the South African grid where baseload power is ultimately delivered by renewables. See statements describing such a vision by Dr Tobias Bischof-Niemz in EngineeringNews News article from 2016. this Engineering Either way, when the preferred bidders are announced, significant investment in the South African energy sector will be triggered, with ramifications for the sector far beyond the mere closing of a 2 000MW dispatchable capacity gap.

On the home front, it gives me great pleasure to announce the appointment of Alexis Knipe as Editor of this Journal. Alexis has been the de facto editor for the past few years and now steps into this role formally. Alexis brings 25 years’ experience in media and the perspective of also being editor of a financial journal and a government service delivery focused journal, and these topics dovetail perfectly with green economy.

Alexis is supported by Songo Didiza, Consulting Editor and by an excellent panel of writers and contributors.

Yours faithfully,

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EDITOR: Alexis Knipe

alexis@greeneconomy.media JOINT PUBLISHER AND PRODUCER: Gordon Brown gordon@greeneconomy.media JOINT PUBLISHER AND PRODUCER: Danielle Solomons danielle@greeneconomy.media

CONSULTING EDITOR: Songo Didiza LAYOUT AND DESIGN: CDC Design OFFICE ADMINISTRATOR:

Melanie Taylor

WEB, DIGITAL AND SOCIAL MEDIA: Steven Mokopane

GEM.TV HEAD OF PRODUCTION: Byron Mac Donald

SALES: Vania Reyneke Gerard Jeffcote

GENERAL ENQUIRIES: info@greeneconomy.media

ADVERTISING ENQUIRIES: danielle@greeneconomy.media

REG NUMBER: 2005/003854/07

VAT NUMBER: 4750243448

PUBLICATION DATE: January 2021

Gordon Brown, Publisher

EDITOR’S NOTE

Alexis Knipe, Editor

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ISSUE 44 | 2021

According to The Paris Effect report (page 8), the world is not yet on track to avoid irreversible climate change. Progress made on lowcarbon solutions is steady and should make headway through the 2020s, as for current economies to continue expanding on their current trajectories creates an unacceptable level of risk.

The pandemic has brought to bear the severity of the risk of unsustainable systems allowing for the introduction of structural shifts towards a more sustainable future (page 14). Regenerative business models point to the emergence of new opportunities – may these sprouts turn into forests.

In Why consumption and production patterns matter (page 18), Llewellyn van Wyk postulates that a core problem is the lack of local production in many counties. He proposes that vulnerable international food chains should be replaced by regenerative local systems. On page 40, Wendy Green concurs, that responsible food production through localised systems is critical for food security climate resilience and environmental protection (read as sustainable crop yields).

A fundamental shift in the current discourse on economic structures is about how we can transition onto a far more robust and well-defined path towards a sustainable future. Tracking and helping to define this discourse is a key part of what the Green Economy Journal is all about. Enjoy the read.

We wish all our readers a green 2021!

www.greeneconomy.media

THE NATURE OF WORK: Regeneration of our consumption degeneracy THE PARIS EFFECT: Reshaping the global environment THE GLOBAL PANDEMIC: Through a sustainable lens ECONOMIC GROWTH: Investing in infrastructure

All Rights Reserved. No part of this publication may be reproduced or transmitted in any way or in any form without the prior written permission of the Publisher. The opinions expressed herein are not necessarily those of the Publisher or the Editor. All editorial and advertising contributions are accepted on the understanding that the contributor either owns or has obtained all necessary copyrights and permissions. The Publisher does not endorse any claims made in the publication by or on behalf of any organisations or products. Please address any concerns in this regard to the Publisher.

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NEWS & SNIPPETS

WATERLOO SOLAR BOOSTS GREEN ENERGY Waterloo Solar, located 10kms outside of Vryburg in the North West, has commenced its commercial operations, becoming the latest utility-scale solar PV project in South Africa.

This 100% South African-owned solar project, brings the total number of large-scale projects constructed in this Province to three, in just one year. Boasting 261 360 solar modules, harnessing the intense North West sun, this 75MW project is set to generate enough electricity to power 84 000 homes, via the national grid, each year.

Situated on a 171-hectare site, the project was constructed in under two years, having commenced mid-February 2019. It is connected to Eskom’s Mookodi switching station, which feeds the generated power into the country’s national grid.

Waterloo Solar is owned by (AIIM) African Infrastructure Investment Managers through its IDEAS Fund, Reatile Solar Power, Phakwe Solar, AREP (African Rainbow Energy and Power) and Cicada Community Trust. The project

achieved full quality and grid-code compliance by local EPC contractor juwi Renewable Energies in November 2020 and is part of the government’s Renewable Energy Independent Power Producer Procurement Programme.

SOUTH AFRICA’S SUSTAINABILITY A-LISTERS This year sees several South African companies making it onto the CDP A-list 2020. CDP is a not-for-profit charity that runs the global disclosure system for investors, companies, cities, states, and regions to manage their environmental impacts. The world’s economy looks to CDP as the gold standard of corporate environmental transparency reporting with the richest and most comprehensive dataset on corporate and city action.

South African companies taking the lead are demonstrating not only good governance but are taking transparent action to mitigate these risks, realise the opportunities, and building climate-resilient and sustainable companies going forward.

SOUTH AFRICA’S A-LIST COMPANIES 1. Anglo American Platinum (Double A-lister: CDP Climate and CDP Water Security) 2. Clicks Group Ltd. (A-list for CDP Climate) 3. Gold Fields Limited (A-list for CDP Water Security) 4. Impala Platinum Holdings (A-list for CDP Water Security) 5. Mondi PLC (Triple A-lister for CDP Climate, CDP Water Security and CDP Forests) 6. Nedbank (A-list for CDP Climate) The full list of companies that made 2020’s CDP A-List is available here https://www.cdp.net/en/companies/companies-scores

IFC GRANTS US$200M FOR GREEN FINANCING IN SA The International Finance Corporation (IFC) announces that it has signed a partnership with Nedbank to increase financing for renewable energy in South Africa. The agreement provides for the financing of 200-million dollars for renewable energy projects.

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AFRICA POWER

GAS-TO-POWER NOT JUST HOT AIR Government’s RMIPPPP has stirred the interest of several private players in the gas-to-power sector, according to Nicola Rump, principal environmental scientist at SRK Consulting. The Department of Mineral Resources and Energy started evaluating RMIPPPP project bids at the end of 2020. With South Africa’s power system being so constrained, government is wanting these projects to start feeding the national grid by mid-2022. SRK is currently conducting several environmental impact assessments (EIAs) for gas-to-power projects in the Eastern Cape and KwaZulu-Natal.

Among the advantages of developing a fledgeling gas-to-power sector through the RMIPPPP is that this would contribute to the growth of local gas markets – helping pave the way for the installation of costly gas infrastructure. This is turn would hopefully reduce the cost of gas as a fuel and spur the uptake of this cleaner fuel in South Africa’s energy landscape.

Sustainable Energy for All (SE4All) estimates the southern African regional energy access gap will require scaling up annual global energy investment from about $400 billion at present to $1.25 trillion. Joshua Low, Managing Director at Messe Frankfurt South Africa, says that central to this is the support and policy development that will help to unlock new avenues for renewable energy penetration.

He explains that currently only 5% of all electricity is sourced from renewable energy projects. “We are seeing a commitment for governments to change this. The South African government has shown this by ensuring that its Integrated Resource Plan – set out in 2010 – mirrors that of the International Renewable Energy Agency’s (IRENA) Global Renewable Energy Roadmap of achieving 30% of global energy from renewable sources by 2030.”

NERSA APPROVES FLAGSHIP PROJECT FOR AMAZON A renewable energy project, commissioned by Amazon, is set to demonstrate the flexibility and convenience of procuring independent power through the electricity grid. The project will see 28GWh of solar energy wheeled via Eskom’s utility grid from a solar farm in the Northern Cape to Amazon’s facilities each year.

Energy wheeling holds tremendous value in that it enables the supply of energy to urban areas, which has been generated from energy projects in outlying areas, such as a solar farm located in an area where the sun is most powerful and consistent. This is done through the transfer of electrical power via a utility’s transmission or distribution system between different grid or network service areas.

The SOLA Chris Haw, executive director at The SOLAGroup Group, explains that although the concept of wheeling energy using Eskom’s existing infrastructure has been in place since 2008, certain administrative

barriers have hindered the uptake of such services.“ This project, which comprises a 10MW solar PV farm, has also received a sought-after generation license from NERSA, a milestone that other similar projects have struggled to achieve.”

The SOLA Group will develop the project and will build, own and operate the solar facility.

Haw explains that the NERSA process requires a signed Power Purchase Agreement and fullydeveloped project to obtain approval.“ This creates contractual challenges because many inputs, such as the foreign exchange rate, are still fluctuating whilst the application process is underway. The high standard of development required for submission means that NERSA is not handing out licenses to projects that won’t proceed, which is a very good thing.”

The generation license received from NERSA is one of the first granted as part of the recent allocation made for distributed electricity

generation to plug the short-term capacity gap.

Haw says that SOLA will deliver the energy via the Transmission Network though a Wheeling Use-of-System agreement.

Other investors into the project include African Infrastructure Investment Managers (AIIM), through the IDEAS Fund, one of South Africa’s largest domestic infrastructure equity funds and one of the largest investors in the country’s renewable energy landscape, with a total of ZAR10bn invested into projects producing 2.5GW of power.

“Our pipeline of 650MW of developed projects is attracting interested energy consumers daily and projects like this demonstrate the potential of a truly modernised electricity market where consumers can procure cleaner energy through state-owned grid lines whilst paying for their upkeep in the process,” Haw says.

The project will begin construction in early 2021.

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SPECIAL REPORT

WINNING

slowly is the same as

LOSING

The Paris Effect draws on research from hundreds of sources to highlight economic, social, and political trends over the past five years and examines how progress towards a zero-carbon economy has accelerated since the Paris Agreement (2015).

Abridged report: The Paris Effect how the climate agreement is REshaping the global economy

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he progress made on low-carbon solutions has been faster than many realise: in 2015, zero-carbon technologies and business models could rarely compete with legacy high-carbon businesses. Today, zero-carbon solutions are competitive in markets representing around 25% of emissions. By 2030, these solutions could be competitive in sectors that represent 70% of emissions.

Global emissions rose from 53-billion tons CO2e in 2015 to 55-billion tons in 2020. The world is not on track to avoid dangerous, irreversible climate change. That is a key reality on which we need to act urgently and collectively.

In the present circumstances, companies and investors have a once-in-a-generation opportunity to scale zero-carbon industries in the 2020s, creating prosperous growth and more resilient economies. The dynamics set in train since the Paris Agreement have created the conditions for dramatic progress in low-carbon solutions. The agreement – with its in-built ‘ratchet’ mechanism – laid out a clear pathway for 195 countries to steadily cut their reliance on fossil fuels.

Solar and wind are the cheapest forms of new generation in countries covering over 70% of global GDP. These sources of power generation confined two-thirds of new power capacity added in 2019; including hydropower, renewables captured a full 75% of new capacity.

Solar/wind + batteries are more competitive as dispatchable power benefiting from battery price declines propelled by the electric vehicles (EV) market. As solar, wind and battery costs continue to fall precipitously, this is creating an economic pull for solar/wind + batteries to serve up to 75-90% of power systems.

In 2016, industry analysts forecast that internal combustion cars would still account for 60% of cars sold in the 2050s. Before 2024, EVs

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SPECIAL REPORT

If effectively managed with high standards of governance and environmental integrity, terrestrial carbon could grow to become a $50-billion market by 2030.

will beat internal combustion on cost and short-haul flights could be costcompetitive with jet-fuelled planes, as well as better engine efficiency and lower maintenance.

Increased recycling rates could mean that virgin plastic demand growth will fall sharply from 4% a year before 2020 to below 1% a year between 2020 and 2027. Rising consumer consciousness of environmental issues has the potential to further reinforce the shift towards nature-positive value chains.

From 2017 to 2019, the market for forestry and land-use credits more than doubled in value to $160 million. If effectively managed with high standards of governance and environmental integrity, terrestrial carbon investments could grow to become a $50-billion market by 2030. This would bring us closer to the point where thriving forests are worth more alive than dead, generating resources for tropical forest nations to invest in their natural capital, build forest positive value chains and improve livelihoods for their rural and indigenous communities.

INDUSTRIAL REVOLUTION The digitisation of the macro-economy enables business models that increase resource efficiency. A more connected world generates multiple sources of innovation worldwide, with emerging economies not only acting as early adopters of new, clean technologies but also driving their development and rapid diffusion. This has the potential to permanently re-shape transport, commercial real estate and consumer spending habits.

The smart money is already moving into clean technologies and solutions. And it is getting out of old economy assets. As these industries decline, they lose economies of scale, cost of capital increases and it becomes harder to attract talent. Coal has been hit first: US coal stocks lost over half their value in 2019. Coal capacity under development is down 62% globally since 2015.

Reflecting their assessment of shortening industry life, oil and gas players are pulling back on long-life projects: since 2014, the average lifetime of major industry projects has declined from 50 to 30 years and the trend is accelerating. Since 2015, when the first few fully EV models were available, numbers have grown to 230 in 2019 and we are set to see over 500 models on the market by 2022.

In 2015, it was broadly assumed that heavy industry (steel, cement, plastics) and heavy transport (shipping, aviation, trucking) would only partly decarbonise, even by 2050, and might never reach zero carbon within their operations.

DECISION DISRUPTION On climate, in the words of Bill McKibben, winning slowly is the same as losing. Many countries are beginning to move, bolstered by an electorate that is prioritising climate and the emergence of industry players lobbying for regulations to support zero-carbon solutions.

By failing to predict the pace of change, countries are making poor policy and investment decisions and wasting taxpayers’ money. To capture this opportunity, countries need to deliver decisive action over the coming year, leading up to COP26 in Glasgow.

Countries that have recognised the opportunity are taking steps to harness the power of investment cycles to establish globally competitive players in new industries. Determination has stepped up across key performers: - Countries, cities and regions accounting for over 50% of GDP now have net-zero targets in place.

- 20 countries and the EU have a net-zero commitment and more than 100 others are considering adopting one.

- China has committed to carbon neutrality by 2060 and US Presidentelect Joe Biden has committed to re-engaging on climate. The two global superpowers account for around 40% of global emissions.

- Over 1 500 companies with combined revenues of $12.5 trillion have set net-zero targets.

- 460 companies have approved science-based targets.

- 1 500 organisations (with a market capitalisation of over $12.6 trillion) and financial institutions with $150 trillion AUM have made clear their support for implementing the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD).

- Institutional investors serving $5-trillion assets under management have committed to align portfolios with a 1.5ËšC scenario by 2050.

- 34 central banks have joined the Network for Greening the Financial System, through which they are working to ensure a smooth transition to a low-carbon economy.

- Over ten carmakers (including Volvo, Renault and Fiat) have committed to EV sales targets for the period between 2020 and 2025. VW Group plans to invest $66 billion by 2024.

- Shipping giants Maersk and CMA CGM committed to net-zero by 2050.

- Since 2018, IAG, One World Alliance and others representing >15% global air passengers have issued net-zero commitments.

- European steelmakers representing 13% of global production have set 2030-50 net-zero targets.

- 40 companies representing one-third of global cement production capacity have committed to being carbon neutral by 2050.

- General Mills, Cargill and Walmart have each committed to regenerative agriculture. Walmart has pledged to protect, manage or restore 50-million acres by 2030.

- 200 companies, covering 20% of the global plastics packaging market, have transformative circularity commitments, up from just one in 2015.

THE SPEED OF LIGHT As solar has declined in cost, deployment targets have increased, bringing more investment in scale manufacturing and innovation. As a result, deployment of solar energy has grown exponentially – faster than ever predicted. In 2014, the IEA forecasted that average solar prices would reach $0.05/kWh by 2050, 36 years later. It took only six years.

Already, and increasingly, before 2030, economic incentives are being created for solar and wind to serve up to 75-90% of power systems (leveraging batteries and other flexibility levers). In 2015, solar and wind were expensive forms of generation. By 2025, an estimated 73% of coal plants globally will have higher operating costs compared to the cost of building new solar/wind, thus forsaking coal. Since 2015, prices have fallen 50-65% for each of solar, wind and batteries. These declines will only continue with projected falls of 30-60% in the next ten years.

For solar, innovation efforts now are focused on improving the efficiency of mass market. Offshore wind costs will receive another immense market boost precipitating further cost declines, as the EU is considering a plan to

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SPECIAL REPORT increase offshore wind energy capacity five-fold by 2030, and twenty-fivefold by 2050 to deliver climate neutrality by mid-century. Solar and wind provide variable output, meaning the power system needs the flexibility to integrate them.

As much as 75-90% of all power use in a system can be met with the right mix of solar and wind, combined with a moderate amount of battery or other short-term storage. Solar/wind + storage solutions are also already beating out fossil generation. Today declines continue, new solar/wind + storage will even begin to beat out the operating cost of existing coal/ gas plants; solar/wind revolution is well progressed and only accelerating.

Solar and wind power captured two-thirds of new power capacity added in 2019; including hydropower, renewables captured a full three-quarters of new capacity. As countries scale renewables rapidly to capture the opportunity, coal plants can ramp down equally as fast.

In 2015, the battery accounted for 60% of the cost of an EV. The cost of batteries has now fallen 60% (from ~$370/kWh in 2015 to ~$150/kWh in 2019). Costs are set to fall a further 40% by 2024, at which point EVs will reach upfront cost parity with internal combustion vehicles. Since 2015, 17 countries have set targets to phase out petrol and diesel cars by 202540, creating the incentive for disruptors to scale and for incumbents to transition. The EV share of car sales has grown five-fold since 2015 and is growing exponentially.

NATURE’S GOLD Since 2015, efforts to halt and reverse deforestation and biodiversity loss have been insufficient. Annual tree cover loss rose from 2018 to 2019, reaching the third-highest levels since record-keeping began in 2001.

Between 2019 and 2020, deforestation rates in the Brazilian Amazon were at their highest since 2008. A growing appreciation of the value of nature is giving rise to disruptive ways of growing food and managing land that could fundamentally shift incentives in nature’s favour. General understanding of the value of nature has increased in recent years.

In 2020, over 600 companies with a combined revenue of $4.1 trillion

Trade policies play a critical role in creating market standards that incentivise the production of nature-positive products.

Global ESG assets (broadly defined) are now worth around $40.5 trillion, having almost tripled in value in less than a decade.

emerged and scaled in recent years. Around a third of food is wasted across the value-chain globally. Trade policies play a critical role in creating market standards that incentivise the production of nature-positive products.

Importing countries can implement trade policies that treat sustainable land management practices as standard market access requirements and actively support tropical countries to adjust to this standard.

These regenerative business models point to the potential emergence of a new economic sector – and a new asset class of investment opportunities – that complements public interventions to protect tropical forests. A growing number of commitments to carbon neutrality are creating demand for voluntary carbon offsets. Technological advances could accelerate and scale many of these solutions.

THE WHEELS OF INDUSTRY In 2015, heavy transport (trucking, aviation, shipping) and heavy industry (e.g., steel and cement) assumed they would not play a significant role in the energy transition. There is increasing confidence that hydrogen will be central to low-carbon solutions in shipping, aviation and steel, and can potentially provide high-temperature industrial heat and reliable/seasonal power balances in the longer term.

Green hydrogen can be produced with zero-carbon electricity and water. Clean hydrogen may also play a role in high-temperature industrial heat, fertiliser and for reliable power supply (via gas plant or fuel-cell) in 100% clean power systems. As renewables becomes cheaper, it enables ever-cheaper green hydrogen. Countries with very good solar and wind resources are well-positioned for cheap green hydrogen. Some estimates point to the green hydrogen export market scaling to $300 billion yearly by 2050. Globally, $40-60 billion of public funding is being made available to support hydrogen.

Sustainable Aviation Fuels (SAFs) are on the verge of a major ramp-up in Europe and North America in the 2020s. Advances are driving growth in three categories of SAF (HEFAs, advanced biofuels and synfuels), which have the potential to reduce fuel emissions by 70%

SET IN STONE (including Walmart, Citigroup, Google, Microsoft and Unilever) have urged governments to adopt policies to reverse nature loss this decade.

Seventeen multinational consumer goods firms with a collective market value of $1.8 trillion (including Nestle, Mars and Unilever) have committed to tackling deforestation, forest degradation and land conversion in supply chains through the Forest Positive Coalition of Action.

Rising consumer consciousness of environmental issues has the potential to further reinforce the shift towards nature-positive value chains by applying pressure on corporates to act. Advances in farming, food production and waste reduction have the potential to ease pressure on resources and free up land for restoration and afforestation projects.

Improved farming practices and reduced food loss and waste enable producers to grow sufficient food without encroaching on nature.

More productive, regenerative and efficient ways of growing food have

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2020 is a watershed moment for the cement sector. Strong industry-wide commitments to decarbonise have reinforced initiatives to deliver on these targets. Although early-stage, a range of solutions are emerging. The sector is deepening R&D and testing the feasibility of a range of potentially transformative solutions that reduce emissions. Carbon Capture, Use and Storage (CCUS) could reduce emissions from cement production processes by a full 90%.

MAKE THE CIRCLE BIGGER Circular economy solutions can reduce carbon emissions and other environmental impacts substantially by reducing total demand for new products and materials. Policy action is critical for the promotion of this shift, given linear models are baked into current economic systems. The implementation of smart policy and the development of solutions by

SPECIAL REPORT

pioneering corporates will ensure improved full life-cycle management of products and materials.

Public concern has risen, notably triggered by the 2017 Blue Planet documentary series and civil society action in the case of single-use plastic.

Government and businesses have begun to respond with increasingly ambitious plans and targets. Public support is creating political space for action. Today, 200 companies covering 20% of the global plastics packaging market have committed to 100% recyclable, compostable or reusable packaging by 2025 through the Ellen MacArthur Foundation’s Global Commitment circularity commitments, up from just one in 2015.

The number of private market funds with a circular economy focus has grown tenfold since 2016.

As these trends take hold, we will see the rise of new industry giants and old industries in decline. A loss of coal is the first to be hit: Coal capacity under development is down 62% globally since 2015. Oil and gas can see the decline coming too: In 2012, three of the top five most valuable public firms were oil companies. By mid-2019, none were.

While some industries will rise and fall, there are other industries which will transition from polluting ways of doing business, to clean solutions.

This is the case in many of the heavy industry and heavy transport sectors.

Though there is set to be increased substitution (e.g., timber instead of steel), there will remain a substantial steel industry.

THE GREEN ECONOMY Long-term corporate debt, and equity, will become increasingly risky with highly questionable terminal values. Research confirms that ESG funds have outperformed the wider market over ten years: once seen as a constraint on portfolio performance, ESG has become a quality assurance signal. This has been reflected in rapid market growth – global ESG assets (broadly defined) are now worth around $40.5 trillion, having almost

tripled in value in less than a decade. This will only get bigger as access to finance improves and the cost of low-carbon, regenerative solutions all over the world continues to plummet. But the financial system is slowmoving and still needs to overcome significant barriers before long-term portfolios are truly “Paris-aligned”.

Better data, new climate modelling tools and high integrity impact measurement are accelerating change. Forward-looking analytics are transforming the investment universe when it comes to assessing physical climate risk. Better reporting and metrics are also critical to improve transparency and measure the impact of investor commitments. A growing number of investors are actively transitioning their portfolios out of fossil fuels as they realise the inherent risks in environmentally unsound investments. In the last three years, the number of financial institutions committing to phase out coal has grown significantly.

New indices, ETFs and debt instruments that facilitate sustainable passive trading are emerging, including a new index for ESG credit default swaps that started trading in 2020 with a tighter spread than the benchmark. Green bonds issuance surpassed the $1-trillion landmark earlier this year, with more than $200 billion issued in 2020 alone (as of November 2020). These bonds support a range of projects from clean energy to sustainable agriculture, waste and water.

The broader sustainable debt market (which includes social and sustainability bonds, sustainability-linked loans and green loans) has generated an estimated additional $1 trillion worth of transactions over the past few years. Policies which require long-term pools of capital – like pension funds – to consider climate risk in investment decisions are critical to future-proofing portfolios. Mandatory disclosure of climaterelated financial risks, better and more transparent data, high-integrity impact measurement, standardised green investment products and accountability in climate commitments will all be key to Paris-aligning the

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SPECIAL REPORT financial system.

Price remains a key purchase criterion for most consumers and polluting products often outperform low-carbon options (certainly initially) on price. The dominant position of incumbent companies – even if short-lived – grants them significant political leverage.

Governments in leading countries are beginning to establish the enabling environment for new systems to emerge. Before 2015, few countries had emissions reduction targets and those that did largely targeted 80% reductions rather than 100%. Five years on, over 120 countries and the EU have adopted or are considering a net-zero commitment.

Some countries have begun to provide direct support to those developing new solutions and creating incentives for the private sector to invest. Across both, greening Covid-19 recovery plans and attaching proper strings to any industry support represents a huge opportunity to build back better, reshaping national economies and setting them on a new path. Countries that implement carbon prices and taxes can use these revenues to fund investments in R&D, technology scaling and clean infrastructure that underpin low-carbon solutions.

GREENING THE RECOVERY Governments are finding new ways to incentivise private sector investment in low-carbon solutions. Over 40 countries have adopted a carbon price.

Since 2015, countries have begun to put in place incentives for low-carbon solutions to scale and new markets to emerge. Key interventions include: Regulations and standards create incentives for incumbents to improve

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performance and protect consumers from unsustainable products.

Feed-in tariffs (FIT) provide support for early-stage solutions to scale from niche markets to larger, mass markets.

Reforming fiscal incentives help to avoid perverse incentives that reward polluting practices. $400 billion of public subsidies continue to pour into fossil fuel and other polluting industries rather than into low-carbon solutions. Of the $700 billion spent on public support for agriculture and fisheries, only 15% is targeted at public goods.

Public procurement: almost all OECD countries have developed green public procurement strategies. In many countries, the public sector represents a significant proportion of demand for construction materials and could be a major driver of low-carbon heavy industry products.

Phase-out dates for sunset industries can accelerate the scale-up of new mass-markets by reducing the power of incumbents to hold back change.

17 countries worldwide have set phase-out dates for petrol and diesel cars.

Eight EU countries plan to phase out coal by 2030.

Built-in ratcheting mechanisms provide companies with clear policy signals and reset expectations for investors.

Financial regulations and policies: financial authorities and governing bodies are beginning to integrate climate risk and realign incentives in the finance system for a more rapid reallocation of capital away from fossil fuel and polluting investments towards more stable low-carbon solutions.

Support a just transition: the new jobs generated by the transition to a zero-carbon economy considerably outnumber those that will be displaced as old industries decline. Yet there are workers in declining

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industries, and they deserve support in the transition. Governments are beginning to demonstrate how a just transition can be assured.

These climate policy signals are increasing and becoming more reliable, making it harder for companies and investors to discount today’s policies.

They should be keenly aware that more policies to enable thriving lowcarbon industries and to penalise pollution are on their way. The NDCs set since Paris play a critical role in this, with the number of countries committed to ramping up ambition at critical mass. It is becoming politically and financially riskier for policymakers to delay action than to act.

Green bonds issuance surpassed the $1-trillion landmark earlier this year, with more than $200 billion issued in 2020 alone.

SYSTEMIQ Delivering the Paris Agreement and the SDGs requires deep innovation across policy, business models, value chains, capital flows and technology. SYSTEMIQ believe the best strategy is to lead positive change in its materials, energy, and ocean and land use systems. While the barriers to transformation may seem high, we have never had more capability to apply the power of good ideas, technology and global citizenship.

SYSTEMIQ was launched in 2016 to accelerate this change.

Driving urgent change takes an inclusive vision. SYSTEMIQ contributes its insight alongside governments, NGOs and foundations. Together we can move to a low-carbon, regenerative and socially just economy.

DOWNLOAD FULL REPORT HERE: THE PARIS EFFECT – how the climate agreement is REshaping the global economy. Report compiled and published by SYSTEMIQ [December 2020].

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ECONOMY

Taking stock of the

COVID-19 pandemic through a sustainability lens

If you are reading this, you are well on your way to surviving one of the most cataclysmic events of our lifetime; one that is forever going to reshape the way we view the world and drive home the importance of prioritising sustainability and all it entails during the years ahead.

BY JESSICA PHALAFALA*

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ECONOMY

T

he coronavirus, which originated in a wet market in Wuhan, China, in December 2019, has since been declared a global pandemic that has spread across the planet through international travel and global supply chains. At the time of writing, the number of cases worldwide was inching towards the 54-million mark. Additionally, the effects of the virus have reverberated through global financial markets and economies, resulting in the greatest recession since World War II. The pandemic has also brought to bear the severity of socio-economic inequalities, risks introduced by our unsustainable systems as well as the materiality of fat-tail events. In so doing, it has provided us with an opportunity to redefine “a new normal� and introduce structural shifts that will help us work towards a sustainable future for all.

Governments brought to action Many countries instituted national lockdowns at an early stage in the pandemic, which is a classic example of a suppression approach to pandemic management. The logic underpinning this methodology is to introduce social distancing to entire populations and minimise the number of additional infections reproduced by each confirmed case, thereby slowing the spread. This, ceteris paribus, is a highly effective public health risk management plan.

In reality, all other things are not, in fact, equal. Thus, the coronavirus has brought crucial attention to the social element of environmental, social and governance (ESG) issues. National lockdowns entail the suspension of economic activity, which results in loss of income and employment, pushing the vulnerable segments of society, already on the precipice of

poverty, into a state of destitution. Also, countries encumbered by acute socio-economic inequalities, like South Africa, have had to face the reality that large segments of their populations living in high population density areas and with inadequate access to clean water and sanitation would face a higher risk of exposure to Covid-19.

The reality of the plethora of social risks has since powered the rollout of unprecedented global fiscal stimulus packages to soften the adverse economic effects of the pandemic. Although these packages have provided the buoyancy required to see us through the immediate challenges, a fundamental shift in the discourse surrounding the risks fragile economic structures pose is translating into the development of a far more robust and well-defined path towards a sustainable future.

Consequently, sustainable investing will be a vital component of a post-pandemic recovery. For instance, there has been an increase in the global issuance of social and sustainability bonds over the past five years, as illustrated in the figure below. New issuances in response to Covid-19 are also coming to market. A guidance note has been published by the International Capital Markets Association (ICMA) to provide a benchmark for the structuring and reporting standards associated with the new Covid-19 social bonds.

Domestically, the South African Minister of Finance announced plans to amend Regulation 28 of the Pension Funds Act to improve the ease with which retirement funds can finance infrastructure projects to help kickstart economic development. The establishment of a robust regulatory framework and the dramatic increase in the need for social intervention worldwide will dramatically improve the level of interest in sustainability bonds and help reshape the economy of the future.

Companies adapting to change

A fundamental shift in the discourse surrounding the risks fragile economic structures pose is translating into the development of a far more robust and well-defined path towards a sustainable future.

Specific sectors and individual firms have been impacted in varying ways by the pandemic. When governments instituted lockdown laws, the spotlight turned to company governance practices and how executives would navigate the crisis. Corporate boards faced scrutiny from various stakeholder groups that challenged the shareholder-centric model of governance, thereby making the board decision-making process much more multi-faceted. Companies became more cognisant of the central role they play in maintaining the socio-economic well-being of society through sustained value-creation. They also recognised how a well-functioning society puts them in a better position to meet their key performance indicator targets. As a result, many boards decided to suspend or reduce their dividends and bonuses due to uncertainty regarding the scope and duration of the crisis.

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ECONOMY

From an environmental perspective, working from home policies shed light on the environmental impact of commuting workforces. According to the International Energy Agency, a record drop in emissions is expected for 2020, with a projected 7% decline in energy-related CO2 emissions relative to 2019, as illustrated in the diagram above. Cities across the world have experienced lower smog levels, reduced water pollution and restored biodiversity highlighting the benefits of working remotely. As such, many companies, like Microsoft, have implemented these policies permanently.

Research also shows that infectious disease transmission is precipitated by rising temperatures, loss of biodiversity and other elements of climate change. By acknowledging this interconnectedness, global corporations are now playing a pivotal role in mitigating climate change risks.

Another equally crucial indirect consequence of the pandemic is the shift in focus to the social component of the traditional business model.

Corporate culture measures such as employee health and safety and labour practices, including paid sick leave, have become priority areas and subject to intense public scrutiny. Furthermore, severe supply challenges have also highlighted the risks of globalisation, and many companies have since amended their supply chain management processes to better diversify suppliers and reshore production. These social developments will not only improve working conditions but foster job creation and enterprise development.

Investor awareness on the rise In light of the pandemic and growing public awareness of the climate crisis, investors across the world are shifting from a morally agnostic investment approach to one that aligns with their ethical concerns.

This is evidenced in budding investor appetite for sustainable products,

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which has resulted in record-breaking flows into ESG funds in 2020.

Furthermore, companies with strong ESG profiles have shown resilience in this time of crisis by staging a strong recovery post the March market lows. This has prompted investors to rethink the impact ESG considerations may have on their investment returns. As supporting evidence, the chart below shows how the MSCI World ESG Leaders Index has delivered returns in line with the MSCI World Index within a tight tracking error, other than its marginal outperformance in the wake of the March 2020 crash. This is a comforting return profile for the passive but ethically driven, investor.

On the other hand, the Xtrackers S&P 500 ESG ETF has outperformed the S&P 500 Index in 2020, highlighting that ESG can provide a source for excess returns even in a time of crisis.

From an institutional investor perspective, these developments have further emphasised that investors are not in conflict of their fiduciary duty when they incorporate ESG considerations in the investment process.

Sustainable practices, such as strong incident risk management, fair labour practices, stakeholder-conscious boards and clear decarbonisation pathways, have proven to be factors that drive long-term sustainable returns. To this end, we should witness an acceleration in the incorporation of ESG considerations into traditional valuation and risk models.

Forging a path forward The turbulence caused by the pandemic and its indirect consequences has emphasised the need for global social change, multi-stakeholder centric business models and international cooperation on public health and climate change considerations. This provides us with the carte blanche to rebuild a sustainable future for all and a resilient global financial ecosystem. *Jessica Phalafala, Fixed Income Quantitative Analyst, Prescient Investment Management

LEBALELO WATER USER ASSOCIATION

IMPROVING LIVES THROUGH WATER Lebalelo Water User Association (LWUA) was established in 2002 with members comprising of the Department of Water and Sanitation (DWS) and mining companies in the Eastern Limb.

Lebalelo is mainly responsible for the provisioning of bulk raw water to the mining companies and local Government.

In the fight against Covid-19, Lebalelo supported Government through the delivery of water tanks to 70 villages and 47 schools in the Fetakgomo Tubatse Local Municipality.

LWUA is a public private sector institution that is well positioned to collaborate with Government in providing bulk raw and potable water to defined areas in the Bushveld Igneous Complex.

info@lebalelo.co.za Tel: 012 348 4654 www.lebalelo.co.za Head Office 8 Charbury Road Lynnwood Manor Pretoria, 0081 Operations Office Farm Havercroft 99KT Modubeng Maroke, 1154

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WHY CONSUMPTION AND PRODUCTION

patterns matter

It is ironic that the shortage of humble face masks and personal protective equipment has highlighted critical fault lines in the supply chain and revealed that the core problem is that, in general, nations do not produce their own goods locally for local populations.

BY LLEWELLYN VAN WYK, B.ARCH; MSC. (APPLIED), URBAN ANALYST

The Common City Manifesto by James McKay, 2020 “Each country has discovered further its fragility, reflected in the dependence on the rest of the world to satisfy the maintenance of the way of living, and at the same time, the isolation and loneliness when attempting to respond to a major exogenous shock.”

— Viwanou Gnassounou, assistant secretary-general for sustainable economic development and trade, Organisation of African, Caribbean and Pacific States

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THOUGHT LEADERSHIP

T

he Times quotes one medical equipment executive stating that 80% of the world’s supply of medical face masks are manufactured in China. Many countries do continue to manufacture everything from toilet paper to automobiles. The problem is that in most countries, especially geographically large countries, with variable climates, growing seasons, and resources, not all products are manufactured close to where people need to use them.

Consequently, cities and regions import goods, from coast to coast. It is this misalignment in consumption and production patterns that creates all the costs – economic and environmental – of producing, growing, and transporting, across thousands of kilometres, everything from vegetables to medical equipment.

Money paid for the products and producers exits the local community in the millions – sometimes billions – of dollars. And the carbon footprint alone of a single truck carrying 2 000 pounds of cargo 1 000 miles [1 610km] is a whopping 3.24 metric tons of CO2.1 The socio-economic and environmental costs of transporting everything we need, even domestically, very quickly adds up.

A convincing argument can be made that, aside from the socio-economic and environmental costs, the global complexity that has been built up in pursuit of economic efficiency (lowest cost) has created a fragile global structure of just-in-time commerce. A case in point is the impact that the 2009 crisis in Fukushima, Japan had on Ford where the production of trucks had to stop because the pigment used in the paint was only made in Fukushima.

As far as the Covid-19 pandemic is concerned, we are in the early stages of assessing which components generally made overseas are about to stop arriving. It is known that 70% of drug APIs globally are made in China, so drug shortages are already commencing and are likely to get worse. This begs the bigger question, which is what sort of unknown critical components are needed but will be unavailable if the lockdown continues?

If decentralisation were taken seriously and designed the way that nature does, systems would be created based on planned redundancy and diversity.

It may well be that the pandemic may hasten, rather than cause, a flattening, or even reversal, in the growth of international trade, a trend which is already underway in the United States and the United Kingdom because of tensions over tariffs (United States), and BREXIT (United Kingdom). If virus-induced shutdowns or border closings create shortages of drugs, medical equipment, or other essential items, many nations and companies may well want to reduce their vulnerability to highly globalised supply networks. Of course, if supply chains shrink, and if countries are going to produce more of their goods, it will structurally alter the demand for oil and reduce the carbon footprint of global transportation.

If our supply chains were in geographically tight hubs across the globe, during any disaster, natural or pandemic, the communities least impacted could continue to function, providing the time and resources to pick up the pieces of the community that has temporarily collapsed. If decentralisation were taken seriously and designed the way that nature does, systems would be created based on planned redundancy and diversity. Paired together, redundancy and diversity are nature’s survival strategies. Yet our supply chains keep tending toward monocultures and monoliths.

One explanation for this backwards approach to systems design is that, in the so-called name of efficiency and price point, our sovereignty has been outsourced to a handful of entities that require centralisation as a means to control how and where profits are directed while leaving the majority of humanity one pay packet away from experiencing intolerable and unnecessary levels of vulnerability and risk.

As Rachel Moriarty, director of operations at The Schumacher Centre puts it, “I think what we’re seeing, especially now, is the need to adapt and look at our existing resources.” The Schumacher Centre is a “think-and-do” tank that advocates for locally-based, just and sustainable economies, and creates models that can be implemented elsewhere. “We are so dependent on outside forces, and we are exporting [our] money to them,” says Moriarty. “‘What if we produced locally, kept money locally, so retail could keep local? … [Then] everybody starts to understand it’s not us versus them, it’s helping our neighbours adapt to needs.”2 The concept of import replacement is a city-specific version of the larger economic notion of import substitution. Import replacement was originally posited by activist Jane Jacobs in her 1985 work Cities and

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THOUGHT LEADERSHIP the Wealth of Nations. Susan Witt, executive director of the Schumacher Centre for a New Economics, explains in an essay titled The Grace of Import Replacement, “Jacobs believed that the best way to achieve such sustainable economies is to examine what is now imported into a region and develop the conditions to produce those goods from local resources with local labour.”3 Re-localisation keeps dollars in the community, with local businesses that are small and accountable and responsible to their employees as well as the neighbourhoods they serve.

Against this backdrop, the import replacement movement is thinking seriously about re-localisation: how to bring back the goods and services communities need, while building up and keeping wealth within those communities. It critically argues that import replacement is the solution to scarcity, job loss and economic downturn, not only during a global crisis such as Covid-19, but in general and, at a time of catastrophic unemployment, and that re-localising the means of production may create the products and jobs needed to generate local economic growth.

What Covid-19 has laid bare is that globalised economic growth has reached its limits. Economies cannot continue to expand without creating new pandemic risks, as people displace the habitat of more wildlife or raise domestic animals in unhealthy conditions.

Local is Lekker There is a wonderful irony in Sturminster Newton Mill, a 1 000-year-old water mill in southwest England – which in its long history witnessed among other events global pandemics such as the plague in the 17th century and the 1918 influenza pandemic – having resumed production to meet the local demand for flour. Evidence suggests the mill has been on the site since 1016 – predating the Norman invasion – and it was mentioned in the Domesday Book, a vast survey of life in Norman England ordered by William the Conqueror and published in 1086.

The current mill was built in 1556, a few years before Queen Elizabeth I took to the throne and more than 200 years before the United States Declaration of Independence. It was upgraded in 1904.4 Like so many other heritage resources, it was last fully operational in 1970, before becoming a museum and normally producing flour just two days a month during the summer, more to simulate a working mill environment than to contribute toward national food production. However, given the food demands created by the coronavirus outbreak, it has been able to produce

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Paired together, redundancy and diversity are nature’s survival strategies.

more than 998kg of flour in a few weeks, the same amount it would usually produce in an entire year. As the curator notes, their first reaction was to shut down before realising that many local shops had no flour in stock and people were desperate. 5 All the stories making international headlines about the impact of the pandemic on food – milk being poured down the drain, planeloads of eastern European vegetable pickers licensed to travel to the UK to harvest salad crops, the hoarding, the scarcities – paints a picture of the existing food system. And it is not a pretty picture.

Experts who study what makes societies sustainable (or unsustainable) have been warning for decades that our modern food system is packed with ticking bombs. The way we grow, process, package, and distribute food depend overwhelmingly on finite, depleting, and polluting fossil fuels. Industrial agriculture contributes to climate change and results in soil erosion and salinisation. Ammonia-based fertilisers create dead zones near river deltas while petrochemical pesticides and herbicides pollute air and water. Modern agriculture also contributes to deforestation and biodiversity loss. Monocrops – huge fields of genetically uniform corn and soybeans – are especially vulnerable to pests and diseases. And while it may be easy for those living in the West to point accusing fingers at the meat-eating practices of those in the Far East, the reality is that the West is also participating in risky animal-use practices.

While the new coronavirus, crippling as it is, might have a somewhat merciful case fatality rate, we know that this catastrophe may be just a dress rehearsal for an even more serious pandemic that could take a more gruesome toll. When that day comes, it is highly likely that such a virus will also have its origin in humanity’s seemingly insatiable desire to eat animals, whether wild or domestic. The conditions in which animals are often farmed today – crowding tens of thousands of animals wing-to-wing or snout-to-snout – serve as “amplifiers” for viral pandemics.6

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A 2007 editorial in the American Journal of Public Health was published on the topic, worrying that our mass-raising and slaughtering of animals for food could be the genesis of the next big global pandemic. Given the connection between industrial animal agriculture and pandemic risk, the American Public Health Association journal editorial observed: “It is curious, therefore, that changing the way humans treat animals – most basically, ceasing to eat them or, at the very least, radically limiting the quantity of them that are eaten – is largely off the radar as a significant preventive measure.” 7 Food vulnerability is a term raised in many commentaries. Long supply chains make localities increasingly dependent on distant suppliers. Many countries have come to depend heavily on imported food and therefore on the resilience of food systems in other countries as well as their own.

Consequently, food chains have become extremely long, with consumers and producers kept far apart creating an inherent vulnerability in the system – one break in the chain and the whole thing falls apart.

The system also tends to exploit vulnerable low-wage workers. And food is often unequally distributed and even unhealthful, contributing to poor nutrition as well as diabetes and other diseases. Although the current food system seems so successful, even to the extent that we have “coped magnificently” with maintaining supplies of key staple foods to the consuming public during the Covid emergency, we need to realise that this is a dangerous delusion. In truth, this model of a highly intensive centralised production, packing and distribution system, for most of the foods that are sold in supermarkets, will continue to have devastatingly negative consequences on the planet and its people.

5 CORE TENETS FOR A BETTER FOOD SYSTEM In her study, Who Feeds Bristol (see page 22), Joy Carey found that there were five core principles on which to start building a better and more resilient food system, and which are equally valid now to see us through a crisis such as the one we’re now living through.

Build more regional-supply networks. Towns should buy more food produced in a climate and nature-friendly way from nearby regions. This means land needs to be allocated for food production and skilled food producers are required. If more of this was in place, towns would be less reliant on other countries, especially for seasonal fruit and vegetables.

People need to increase their cooking skills. Households need to be capable of cooking a meal from scratch with simple, fresh, affordable ingredients. It is less stressful when you know how to adapt meals if there are shortages of certain ingredients. Besides, less pre-prepared food means less wasted packaging and usually, money saved too.

Improve collective food awareness. If everyone understands where their food comes from, recognises the part they play in the local food community, and realises their potential in contributing to the resilience of that community it will shift attitudes and therefore habits.

Develop more closed-loop or circular systems. This is ultimately about conserving resources, and money – designing out unnecessary pollution and waste and treating anything that remains as a resource, not waste. The impacts of this are countless: more free water for gardens from rainwater harvesting; provision of compost and fertilisers derived from food by-products to urban farmers that in turn encourages the city to collect green and food waste; healthier and more nutritious food produced in natural systems that regenerate the environment; helping money to keep circulating in the local economy rather than be lost to external shareholders.

Safeguard food retail diversity. As experience is showing now, there is an inherent risk in relying only on supermarkets. A wider range of options is needed for where nutritious food can be bought, including independent businesses, market traders, farm shops, and home deliveries direct from farmers. Numerous smaller-scale food producers need alternatives to supermarkets to get their products to local buyers and to thrive as businesses.

It is known that diversity brings mutual benefits.

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THOUGHT LEADERSHIP Examined in relation to human security and international development, Covid-19 is causing a sea-change in the landscape of food security. The concerns of policymakers and communities in rich and poor countries have switched from a primary focus on the global food system to very real and everyday worries about getting the next square meal in local contexts.

What this pandemic challenges us to do is to build greater resilience into our food systems so that it can better endure a crisis in the future.

Exactly ten years ago, Joy Carey, coordinator of Bristol for Gold, began her research into Who Feeds Bristol? Its purpose was to better understand the strengths and vulnerabilities in Bristol’s food supply, to identify the priorities for future resilience, and to inform an action plan on how the city could shape its food system. She notes how, at the time, she had to be assertive about referring to the “food system” and its “vulnerability”, never imagining that within a decade both concepts would be at the fore of daily experience. She states, suddenly, the word “vulnerable” is everywhere: the most vulnerable groups are being hit hardest by Covid-19; endless discussion about how vulnerable the global food supply system is to supply chain disruptions and resulting food shortages; cities all around the world scrambling to organise emergency food supply to vulnerable groups through not-for-profit and community-organised operations that are dependent on donated surplus food and therefore also vulnerable. Businesses are vulnerable to closing. Individuals not classified

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as vulnerable nevertheless feel their health vulnerability each time they go out food shopping.8 Covid-19 has highlighted just how interconnected we all are; and how, when it comes to food, we are similarly all part of and reliant on a highly complex system – dependent on the health of the soil, and all the people and processes that get the food onto our plates – for our nutrition, our health and our survival. Not surprisingly, key food system vulnerabilities are being starkly exposed in this pandemic. Not only does a country like the UK produce only 61% of all the food it consumes, more critically it imports almost 60% of the vegetables and up to 90% of the fruit it eats.9 Aside from this, Carey notes it goes further: rely on “invisible” but highlyskilled migrant seasonal workers to plant and to harvest, or to work in the abattoirs.

The “just in time” delivery systems of the UK centralised supermarket supply chain aims to keep food storage costs to a minimum by only buying in a limited volume at any given time. This approach has led to bare shelves and slow restocking, with people faced with lockdown suddenly all buying more food than usual. Added to this, the global food system is responsible for a third of greenhouse gas emissions; a third of the global population cannot afford to buy enough food, while another third has food-related health problems. To address vulnerabilities and to make big changes for a better future it is critical to understand more about how the whole system works.

THOUGHT LEADERSHIP

LOCAL FOOD: THE BIG

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1. THE TASTE. Local food is invariably fresher and therefore has more flavour.

2. NUTRITIONAL VALUE. Many foods lose some of their nutritive value over time. If food is coming from thousands of kilometres away it is going to lose its freshness and taste as well as its various beneficial components, especially vitamins.

3. FOOD SAFETY. The concern of food safety not only includes the fear of various additives but also focuses on growing techniques and farm conditions. Over the past 20 years, there have been horror stories about food contamination in China, South America, Mexico and even California.

As a consumer, you have no control over food produced in other regions or countries. There is little transparency. The big multinationals are mainly concerned with reducing costs so that they can beat the competition on price alone. Product source does not rate very highly. They will not hesitate to use hormones and antibiotics for animals or various pesticides and herbicides to increase production. Locally grown and made food can allay many of our food safety fears because we can go check out the farm or food plant ourselves. Also, a local supplier lives and sells in your neighbourhood and they cannot jeopardise their only market which places a much greater emphasis on quality and safety.

4. FOOD DIVERSITY. When you by local you are supporting a business in your community. The diversity of small businesses is crucial to regional economies as it ensures greater stability over time, including added resilience to recessions. Many factors influence this outcome but primary among them is that local businesses create and keep jobs in the community. They keep profits and valuable skills in that same community. They also develop long-term relationships with their clientele.

5. FOOD DISTRIBUTION. Local businesses have the potential to significantly reduce the negative impact [pollution] of too many “food miles” associated with transporting food.

6. EMOTIONAL CONNECTION. The final advantage of the buy local philosophy comes from two loosely related attributes. One is physical, the other more ethereal. The first attribute that a local food brings to the table is a “sense of place”. This is a direct result of local growing conditions which influences taste. In French, they use the word terroir to encapsulate all those elements that go into growing food – things like soil, weather, topography, wind, drainage, etc. As a result, each crop, grapes as an example, will taste slightly different in different places. This is a fascinating phenomenon and it creates pride in the foods from your own region. It dovetails nicely into the growing interest in “food provenance” in North America – people want to know where their food comes from and they are demanding traceability (an easier task for your local farmer than huge multinationals!). The second, and less empirical, value gained from purchasing locally is harder to define. Besides the pride one might feel about buying local there is an even greater emotional connection to local foods – that involves knowing a farmer, or brewer or pastry maker. 12 Bob Desautels

The notion of diversification in the food supply chain runs through several commentaries. While it is natural to consider food security only from a predominantly consumer perspective, many smallholder farmers, who help produce almost 80% of the food consumed in Asia and SubSaharan Africa for example, also feel the impacts of this crisis. They are experiencing significant disruptions of the vital food supply chains in which they are essential participants as both producers and consumers.

Local, national and global food supply chains will falter if farmers cannot access inputs or supplies necessary for efficient production, get into their fields to sow their crops, fertilise appropriately, manage pest and weed problems, harvest perishable products such as fruits and vegetables, or participate in markets because of lockdowns. The crisis underlines the vulnerability of billions of people at the bottom of the food pyramid and the need for more diversified, nutritious, and resilient food systems.

One way to increase the resilience of the global food system is to support a wider range of suppliers. Diversifying away from a centralised supply chain to a more multifaceted one can increase the food system’s ability to react and adapt to shocks. Shorter supply chains have greater resilience because they have fewer links in the chain and therefore less opportunity for the chain to break in such a crisis. As Olivier De Schutter, the UN’s Special Rapporteur on the right to food (2008-14) highlighted, “It is urgent that [we put ourselves] in the service of supporting diversity, not uniformity. The shift towards re-localisation and re-territorialisation of food systems must be seen not as a threat but as an opportunity for fairer and more sustainable food systems.10 Concerns about the food system have been growing for several years already, especially as the impact of climate change becomes more apparent. Farmers have been increasingly focused on how to adapt

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THOUGHT LEADERSHIP food systems to improve resilience and help address those challenges as instances of extreme weather events and global temperatures have risen. Agroecology is one approach that is receiving increasing attention because agroecological systems are inherently more resilient as they have a greater capacity to recover from drought, floods, or hurricanes.

Furthermore, they foster stronger socio-economic resilience because by diversifying the range of crops grown and reducing dependence on external inputs, producers dilute economic risk.

Vulnerable international food chains must now be replaced by regenerative local food systems. Building a vibrant food culture could simultaneously tackle obesity and youth unemployment while ensuring future food security and restoring soil nutrition. The creation of worker cooperatives and support for local businesses have been shown to multiply local wealth and wellbeing and will be needed to create more cohesive living and working communities. Families may want to ramp up their gardening to supplement purchased food. Get to know and buy from local farmers and create a network of social capital to boot. Over the longer term, the entire food system needs to be overhauled to be less complex, more locally oriented, and attuned to the realities of soil, energy, and nature. Like everything, our future agriculture system can be informed and improved by this crisis, but we first need to navigate the crisis.” 11

The global food system is responsible for a third of greenhouse gas emissions; a third of the global population cannot afford to buy enough food, while another third has food-related health problems.

Bacteria Salmonella

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Fortunately, there are encouraging signs emerging around the globe most notably the burgeoning of local efforts that are currently underway – in both rich and poor countries – to provide food supplies to the most marginalised in society. Most countries are reporting an upsurge in public-spiritedness, with local businesses and community organisations setting up food delivery networks to get food to households in isolation or with vulnerable residents.

There has also been a rapid rise in pop-up distribution centres, with decentralisation appearing to be the most effective way to link farmers’ produce to the people who need it in local towns. The creation of a new “direct-to-home” model, where farmers become the distributors of their own produce to local households, is emerging as the new form of local delivery to ensure food security of households. These different firm and farmer initiatives indicate that rural entrepreneurship is developing and finding new ways to ensure food security in local communities.

In addition, a welcome feature emerging within communities in both rich and poor countries are the changes in how people source food, and in how they cook and eat at home. People are learning how to manage within new constraints. In public broadcasts, the message is to stretch whatever ingredients are available. In poor communities, the breakdown of global supply chains has resulted in a fall in cheaper imports and a shift to local produce. For example, women trading fish in Kisumu, Kenya, have started to sell local fish from nearby Lake Victoria as Chinese imports are no longer available, and this has increased their local income. 13 It is these stories of local, decentralised solutions to managing food security during the Covid-19 pandemic that could be the beginning of a new chapter in the field of global food security. All communities across the globe are focusing on their local food security. Now might be the best moment to extend that enquiry towards a widespread understanding of the relationship between food availability and nutritional outcomes as well. Eating the most nutritive foods to ensure better health and wellbeing is intricately linked to the ability of communities to undertake innovative local agroecological practices.

The agroecology approach aims to create sustainable food systems, and at the core of this approach is a set of practices based on “locally adapted” farming. Working with farmers and their knowledge base and linking farmers to their local consumers has two benefits. Farming methods are improved, and there is an increasing awareness among local consumers of the relationship between food production methods and

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improved nutrition and health. This synergy ensures that agroecology has benefits for both food security and sustainability. In this new approach, improving local links between food production and human nutrition is the first step to advancing human security in communities across the globe. Increasing the resilience of communities will ensure that agriculture – which remains the primary source of livelihood for 86% of the world’s rural population – will be recognised as a key priority in international development.

Consumers too have a role to play in this transition. The Sustainable Food Trust advocates action on three levels. First, consumers should commit to sourcing as much local and sustainable food as is consistent with their household’s needs and capacity. Second, consumers can go on the Internet and identify all the producers who are farming nearby who would like to increase their percentage of local sales, contact them, and ask how they can supply them. In a way, these are the most powerful actions we can take, because if you think of the food system as a giant organism, individual consumers are its cells, and we need action from a cellular level up. Third, farmers and growers could approach local independent food shops and ask if they would consider stocking their products; they could register their existence on local food websites; they could also collaborate with others to establish “pop-up” farmers markets where their customers order online, and boxes and bags of products are delivered to them at a pre-arranged place and time in a food-secure manner. Independent food companies and retailers, and for that matter supermarkets as well, could increase their loyalty to stocking sustainable.

Government also has a role to play. Government could establish a national umbrella website which holds all the constellations of regional and local food websites and provides an opportunity for all producers and all citizens to explore how they could identify and secure supplies of sustainable and local food. Governments could also offer immediate cash grants to producers who wish to improve their local food production, processing, packing and distribution infrastructure, including local abattoirs which are seeing greatly increased demand but are struggling to survive due to the increased costs they face. It might also include polytunnels for growers, packing sheds, buildings and processing equipment for dairy farmers and meat producers. 14 As Richard Heinberg notes, “for better or worse, this is likely to be a historic moment of change for our food system. Events may take us in one or another direction. If big existing players in the food industry are first in line for bailouts and use the crisis as an opportunity to gobble up their smaller competitors, we could soon find ourselves dependent on a food system that is even more consolidated and deregulated, and even less resilient in the face of future disruptions. On the other hand, governments, producers, and consumers could use the crisis as an opportunity to address festering food supply issues, and to refashion the system in a way that better meets everyone’s needs over the long run. We all have a stake in the outcome.”15 The model which is needed involves regional and even local supply chains being developed on a large scale – in other words, cellular systems somewhat analogous to the re-localisation that is beginning to take place in electricity distribution.

REFERENCES 1 Vande Panne, V. 2020. “To combat widespread job loss, stay local and look to import replacement.” READ HERE . Downloaded: Tuesday, 21 April 2020 2 Ibid.

3 Ibid.

4 Frater, J. 2020. “1,000-year old English mill resumes flour production to meet demand during coronavirus pandemic.” READ HERE . Downloaded: Thursday, 30 April 2020 5 Ibid.

6 Shapiro, P. 2020. “One root cause of pandemics few people think about.” READ HERE . Downloaded: Wednesday, 25 March 2020 7 Ibid.

8 Carey, J. 2020. “A wake up call for food production resilience.” READ HERE . Downloaded: Tuesday, 28 April 2020 9 Ibid.

10 Elridge, H. 2020. “Building resilience into our food systems.” READ HERE . Downloaded: Saturday, 11 April 2020 11 Hagens, N. 2020. “An overview of the systemic implications of the Coronavirus.” READ HERE . Downloaded: Saturday, 18 April 2020 12 Deasautels, B. 2020. “Think globally, act locally.” READ HERE . Downloaded: Thursday, 07 May 2020 13 Fennell, S. 2020. “Local food solutions during the Coronavirus crisis could have lasting benefits.” READ HERE . Downloaded: Friday, 24 April 2020 14 Holden, P. 2020. “The Coronavirus pandemic and future food security.” READ HERE . Downloaded: Thursday, 09 April 2020 15 Heinberg, R. 2020. “Fraying food system may be our next crisis.” READ HERE . Downloaded: Friday, 24 April 2020

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INFRASTRUCTURE

Recovery hinges on URGENT ACTION, INNOVATION

BY SRK CONSULTING

Hopes of a recovery in South Africa’s economic fortunes rely heavily on more infrastructure spending, but the Covid-19 pandemic is further complicating this difficult task; speed and ingenuity are now of the essence, according to SRK Consulting partner and principal engineering technologist, Steve Bartels.

28

INFRASTRUCTURE

It is not wealth that built our roads, but roads that built our wealth.

“G

overnment’s establishment of Infrastructure South Africa to streamline project roll-out, and the recent prioritisation of strategic integrated projects, is a promising step,” says Bartels. “But all this work needs a strong and capable construction sector – and years of decline are now being aggravated by the local impact of the pandemic.”

He says the role of infrastructure investment in stimulating economic growth should not be underestimated, citing the creation of 8-million

jobs by President Franklin D Roosevelt’s Works Progress Administration in the US after the Great Depression. He also pointed to the similar vision of another great US president, John F Kennedy, who once said: “It is not wealth that built our roads, but roads that built our wealth.”

Bartels adds: “If South Africa implemented a similar programme and managed it correctly, it could potentially be the key to the recovery of South Africa’s economic fortunes.” His involvement in poverty alleviation projects and labour-based projects for provincial government has given

29

INFRASTRUCTURE him first-hand experience of how this type of employment can transform lives and communities. “I witnessed how local contractors and workers were lifted out of poverty by infrastructure projects in KwaZulu-Natal – and no longer relied on handouts to feed their children,” he says. “A little done wisely goes a long way.”

He discloses that the construction sector had been under significant pressure in recent years as government spending on infrastructure declined, with a number of large contractors closing doors or entering business rescue. During 2020, restrictions related to Covid-19 were expected to cause an 8,7% decline in the construction sector this year, and the loss of up to 100 000 jobs. This situation needs to be turned around as a matter of urgency to preserve the capability of the sector, he adds.

While having to redirect funds to address Covid-19 impacts, government still plans to commit R100-billion to its National Infrastructure Fund over the next decade – to help prepare and package projects and provide catalytic finance. “South Africa’s future demands that we make full use of our scientific and engineering expertise, to focus our development efforts and achieve more with the fewer resources at our disposal,” he says. “The Covid-19 pandemic has reminded us that science-based decision-making is the only way out of the various crises we currently face.”

Consulting engineers and scientists are important sources of the skills and experience required to build infrastructure and re-ignite the economy. Vis Reddy, managing director of SRK Consulting, warns that the plight of the construction sector during 2020 had seen many consulting engineering firms having to reduce pay or even shed jobs.

“This sector could risk losing essential talent and experience, which could seriously undermine South Africa’s recovery efforts in the infrastructure space,” says Reddy. “The danger is that large-scale job shedding invariably means that many qualified and experienced professionals are forced to take up other careers – so we often cannot get them back after a prolonged downturn.”

Bartels also highlights the importance of leveraging technology in the infrastructure sector, to enable a recovery to proceed even under pandemic conditions. He notes that communication and data-sharing technologies will be increasingly important tools in the “new normal” working practices and social distancing.

“While most of these technologies were available before – such as virtual private networks to facilitate the sharing of documents and information – not everyone was using them effectively,” he says. “Now they will become vital for continued efficiency.” He adds that infrastructure development would also benefit from innovative new ways of gathering detailed visual

A little done wisely goes a long way.

Infrastructure provides economic benefit by creating employment and unlocks economic opportunities.

30

INFRASTRUCTURE

Consulting engineers and scientists are important sources of the skills and experience required to build infrastructure and re-ignite the economy.

The Covid-19 pandemic has reminded us that science-based decision-making is the only way out of the various crises we currently face.

and other data, which were traditionally gathered by physically visiting and investigating project sites.

“High-definition photography and photogrammetry, as well as the technologies such as drones and remote sensing to deploy these tools, will become more valuable,” says Bartels. “GIS and GPS technology will continue to grow in their applications, helping to accurately geo-locate data points for various scientific and engineering applications.”

The adversity of the Covid-19 pandemic had also been accompanied by opportunity, he says, where more use was being made of younger scientists and engineers within SRK Consulting. “Many of our most experienced staff are vulnerable to Covid-19 due to their age, so we have made more use of younger staff where projects require travel and on-site time,” he says. “These young, well-qualified and resourceful professionals have already proved to be valuable assets in their new roles – and are now accelerating their contribution and their learning curve.”

31

INFRASTRUCTURE

Keeping our return to the

WORKPLACE

healthy, safe and green Green Building Council South Africa CEO, Lisa Reynolds, reflects on the drivers behind the new Safe Return to the Workplace guide published in partnership with engineering consultants, Zutari.

BY LISA REYNOLDS, GBCSA

T

here has been a lot of discussion around what our “new normal” will be in a post-Covid-19 world. While we are not quite “postCovid-19” yet, there is a need to find practical ways to grapple with the challenges of the “in-between normal” – the space of uncertainty and unknown that we presently find ourselves in.

At the Green Building Council South Africa (GBCSA), our goal has always been to inspire a sustainable built environment in which both people and the planet thrive (and not just survive). Part of the GBCSA’s post-lockdown green recovery plan is to facilitate the rebuilding of South Africa’s economy, and built environment, with sustainable solutions that prioritise healthy and safe working spaces.

How can businesses return to their offices safely?

For the months following the hard lockdown in South Africa, we were receiving feedback from the market that there was a need for many businesses to return to their offices in some sort of way. For these businesses (particularly those in the built environment industry), the element of teamwork informed by physical interaction is an important component of driving delivery, innovation and collaboration. And while businesses were returning to their workplaces, property developers and building owners were asking us: how do we know whether our building is safe enough for businesses and employees to return? They wanted some kind of surety that they could offer a safe space to the building occupants, and they also needed technical guidance on how to make that happen.

Thus, GBCSA did a review of the other tools and guides available on the market and discovered that most were quite generic and did not offer the technical guidance that building owners specifically, were looking for.

The exception was engineering consultants, Zutari, who had developed a Covid-19 checklist, which became the technical starting point for our guide. It made sense to partner with their expertise, align it with green principles, and create a user-friendly guide that would address the specific concerns faced by building owners, facilities managers, office managers and tenants, in the pursuit of a healthy and safe workplace.

Defining a healthy workplace What came to light was that commercial buildings are not typically designed to standards aimed at minimising the spread of infectious disease such as the SARS-COV2 virus. Zutari’s technical experience showed that many existing older buildings are fitted with air ventilation systems

32

that are not compliant with current regulations, leading to inferior indoor air quality in comparison to newer buildings.

What I have seen in my experience with building standards such as the SANS 10400 and the implementation thereof, is that workplaces were often designed to comply with minimum legislated requirements.

Once a building was occupied, this meant packing in as many people as possible into an office space. This is the case specifically for places like call centres. This might appear to be good for the bottom line, but is it good for the people in that crowded, minimally ventilated space? And ultimately, the larger question: Are unhealthy and unhappy staff sitting on top of each other in an office space good for the bottom line?

So, in my opinion, designing to be safe according to Covid-19 standards is just going back to good first principles. It means good ventilation, fresh air and providing people with the space they need to be productive.

We talk about health and wellbeing (mental health) in a green building, which is measurable as building occupant satisfaction, staff retention and productivity. For years, we have been saying that green buildings are healthier than their counterparts, and it seemed like many thought we were just being “touchy-feely”, despite there being actual tangible measurables like less sick leave days, etc. Businesses refused to see it.

Covid-19 has made all of this so tangible and impossible to ignore.

What loadshedding has done for energy efficiency, and what water crises do for water efficiency, Covid-19 has done for health in buildings.

It has highlighted the need to respect the human aspect of buildings, and this will be a long-lasting legacy.

The starting point for sustainable innovation The guide itself should be seen as a starting point and overarching framework for a much bigger technical exercise, which would likely need to be supported by a professional building assessment. The guide gives an indication of all the items that should be considered for the safe return to the workplace but seeks to identify best practice, not the ultimate solution.

So, while informed by the current public health pandemic, it is intended for long-term consideration, prioritising the health and safety of building users. It is intended to assist in creating a new and healthy normal.

We are a hoping to inspire a push towards innovation in the realm of technical solutions to health and safety in buildings. Building developers and owners can achieve one Green Star innovation point for disclosing what best practice recommendations they have installed in their

INFRASTRUCTURE

The Covid-19 pandemic has reminded us that science-based decision-making is the only way out of the various crises we currently face. buildings. This provides an opportunity for “active citizenship”, where building tenants are empowered with the knowledge to take ownership of their workplaces.

Ambitious building owners can also achieve Green Star innovation points for taking one of the 45 best practice initiatives in the guide to the next level, by implementing a new strategy or design that shows a

measurable impact to a building’s systems and its users. These points are awarded on a case-by-case basis, but we hope will offer some encouragement to be innovative within this arena.

A healthy economy is a working economy We hope that while seeking to assist building owners as businesses transition from home to the workplace, we will also further our green building agenda, by keeping sustainable principles top-of-mind. This is our contribution to the safe rebuilding of a distressed economy into what we see as a vibrant green future.

THE SAFE RETURN TO WORKPLACE A ROADMAP

A summary The framework and guideline consist of five categories and 45 initiatives and has been put together to understand the range of options that should be considered when implementing the return to the workplace, with safety as the key priority. It provides an overview that identifies infection control strategies at various levels of decision-making and responsibility. The guide considers initiatives related to management, personal behaviour, indoor air quality, safe water systems and design for safety. Each category has been collated around the point of control within the building. For example, the Management Category highlights the need for mental health support services that encourage resiliency and ensures that discrimination does not occur.

When considering mitigation strategies for your building, it is important to understand how infections such as Covid-19 spread. The risk associated with the following four most common transmissions routes should be addressed when using this guide: person-to-person via macro droplets; airborne transmission; fomite transmission and faecal-oral transmission.

The framework and guideline for the Safe Return to the Workplace can be downloaded for free .

The initiatives can be downloaded .

Disclaimer • The checklist intends to act as a guide for a safe return to the workplace. The purpose of it is to be used as a preventative measure. Implementation of the guide does not imply, nor can it guarantee prevention of infection.

• This is not a rating tool that can generate a certified green building status by the GBCSA. Please note: The GBCSA wishes to develop this further into a health or wellbeing type of rating if sponsorship becomes available. Please contact the Head of Technical at the GBCSA for further engagement around such an opportunity at info@gbcsa.org.za

33

STORAGE

Storage project in Varel, Lower Saxony, Germany.

34

STORAGE

NaS BATTERIES

extend renewable energy projects into the peak Stationary batteries mitigate the fluctuations of renewable energy sources and extend the period over which a renewable energy system, such as solar photovoltaic (PV) installations or wind farms can reliably supply power.

BY ALTUM ENERGY

W

hen selecting a battery for a stationary energy storage system, one of the most important factors to bear in mind is that of duration. By duration, we refer to the period during which the battery will deliver continuous power at its rated output.

Suitable battery type for each application Batteries are designed for specific applications and while they may work in different applications, are always best suited to the application for which they were designed. Batteries designed to provide short bursts of high current, like lead-acid batteries, are unsuitable for an application which calls for a long period of low current draw before the voltage decreases.

NaS (Sodium-Sulphur) batteries are a far better option in this case.

Batteries that are designed for mobile applications in electric vehicles can be used in stationary applications, too, but do have their limits when it comes to long-duration energy supply (on cost/performance basis).

Equally, NaS batteries are unsuitable in mobile applications because they are not designed for this purpose.

35

STORAGE

Comprehensive consideration of all (hidden) costs Batteries can be a very profitable investment. A prerequisite is that the battery technology fits the application case. The best buying argument is the levelised cost of storage (LCOS) because it reflects the total lifetime cost of an electricity storage technology divided by its cumulative delivered electricity.

In any application of large energy storage, one should ask the following questions with regard to the expected payback: What is the length of operational life? What track record does this technology have? How many charge-discharge cycles one can reasonably anticipate?

Then there is the cost of replacement. It would be clever to select a

battery that would not need a replacement after a few years. What about the “hidden” costs of safety, disposal, and carbon footprint? These matters should all be considered when deciding on the ideal battery for your stationary energy storage project.

NaS batteries – proven technology Sodium-sulphur (NaS) batteries are an effective way to store large amounts of electrical energy, discharging for six hours at rated output. The use of NaS batteries will not only extend the duration of power from renewable energy installations but will also help reduce the cost and improve the reliability of energy grids that rely on renewable energy sources.

Stationary storage solution NAS® batteries are high-energy, long-duration sodium-sulphur batteries designed for stationary energy storage. The Japanese ceramics specialist, NGK Insulators Ltd, started working on the NaS concept in 1989. NGK went into production with its commercial NAS® battery for renewable energy grid support in 2002.

With their capability to charge and discharge for 4-8 hours, NAS® batteries are ideally suited for applications such as renewable power stabilisation and its integration into the grid. Furthermore, NAS® batteries are used for enhancement of power quality, optimisation of energy use and back-up power supply for industrial customers and micro/off grids. Through all its applications, NAS® technology helps to reduce energy costs and environmental impact.

NAS® battery systems have been deployed at more than 200 projects worldwide, with total deployments of 560MW and 4GWh. BASF New Business GmbH distributes NAS® batteries produced by NGK Insulators Ltd. In South Africa, NAS® batteries are represented by Altum Energy, a local business development partner of BASF New Business.

For more information on NAS® batteries, contact Lloyd at Altum Energy lloyd@altum.energy

36

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PROFILE

Responsible

FORESTRY

A part of South Africa’s green economic response to the global Covid-19 economic crisis.

BY FORESTRY SOUTH AFRICA

F

orestry South Africa (FSA) is South Africa’s largest forestry organisation representing growers of timber. Membership includes 11 active corporate forestry companies, approximately 1 300 commercial timber farmers and some 20 000 small-scale growers who between them, own or control, no less than 93% of the total plantation area in the country.

South Africa’s plantation forests may look the same as they did 50 years ago, but they are worlds apart in almost every sense. To be globally competitive in the 21st Century, it must abide by regulatory and industry body obligations, be responsible land users and meet the demands of an increasingly socially and environmentally conscious consumer base. The forestry industry has had to adapt, evolve, and transform dramatically. “Consumers, policymakers, regulatory bodies and the sector itself demands forestry is conducted responsibly. Responsible forestry requires attention to sustainable, efficient and effective practices that have the least environmental impact and yield the greatest social and economic benefits, while producing an array of renewable and versatile endproducts�, explains Dr Ronald Heath, Director of Research and Protection, Forestry South Africa.

Reducing the environmental impact Far from the “green deserts� plantation forestry is often misguidedly portrayed to be, the forestry landscape is a patchwork mosaic of planted compartments that make up around 70% of forestry-owned land, interwoven with a network of indigenous forests, grasslands, wetlands and in the Cape, fynbos. These natural spaces play an important role within the forestry landscape, harbouring a wealth of biodiversity, recreational opportunities and natural attractions and as such, they are managed, monitored and conserved by the industry.

38

Servicing neighbouring communities Going beyond the plantations, forestry’s reach extends into the rural communities that neighbour its plantations. The industry is a major employer in rural settings, investing millions of rands annually on a variety of rural community-based initiatives, spanning health and welfare, food security, education, community infrastructure, community engagement and upliftment, enterprise and supplier development, the environment and recreation.

Producing everyday essentials and products of the future The reach of South Africa’s forestry sector is global, with forest-based products found in every South African household and office and in many homes across the world. These include items we take for granted, like toilet paper, roof trusses, teabags, pencils. Those most would never guess are in part sourced from trees, lipstick, washing powder, sweetener, detergent, vitamins, flavourings, cell phone screens, low-fat ice cream and yoghurt. Then there are the wood-based products of the future, the green fuels, bioplastics, green chemicals and technologies. While diverse in their applications these forest-based products share several important characteristics, including their renewability, sustainable production and employment potential. As a result, the forestry sector is likely to have a significant role in the green economic response to the Covid-19 economic crisis and beyond, both in South Africa and globally.

For more information about forestry in South Africa or FSA please visit our website.

www.forestrysouthafrica.co.za

FOOD SECURITY

Modern Agriculture, THE UNLIKELY HERO The production of food is more important now than as ever before and to understand how planet-friendly food should be produced and financed, we need to take a trip back in time to understand the history of agriculture and the impact of the “green revolution� that followed.

BY WENDY GREEN

40

FOOD SECURITY

T

he naysayers of the last century predicted that with “soaring populations”, especially in the developing world, we would run out of food. This pessimistic view didn’t take into account human ingenuity and the related industrial or agricultural evolutions.

Mechanical and technological advances fuelled the development of soil tillage and irrigation equipment. Advances in nitrogen and other chemical production led to the mass manufacture of cheap chemical fertilisers, fungicides, insecticides, and herbicides. These manufacturing advances coupled with the expanded global trade network led to a boom in the production of agricultural products, ranging from grains to palm oil.

General urbanisation together with the need to produce economies of scale led to the movement of many of the smaller farmers to the cities.

However, food still needed to be produced so big corporations started paying more attention to farming. They brought not only an increase in funding, specialisation and monoculture to the industry but also further IT and biotech revolutions. Business opportunity abounded, and food became big business.

As in the mining boom of the previous century where the longterm money was made in mining supplies and support, agrochemical, agribiotech supply and support services profited immensely. “Roundupready” had become a certainty catchphrase to minimise risk. During this period food became really cheap and easily available. By the turn of the century, all was looking good. Human ingenuity coupled with agritechnology triumphed.

Not all was that rosy though.

The feedback loops and unintended outcomes of the agriculture system impacted political, economic, natural, and societal systems. Food production was politicised and Food Aid became linked to global political manipulation. The fall of communism was followed by free trade. Free trade and cheap imported food held up by the often one-sided balance of trade agreements undermined the developing nation’s ability to produce their food.

The famous analogy of the three-legged pot with the pillars of finance, environment and society will continue to fall over if not balanced urgently.

Our natural systems bore the brunt of many of these advancements.

Natural and undisturbed land worldwide diminished due to the drive for production and profit. Modern tillage and denuding of the land impacted soil quality including the depletion of micro and macro minerals. Fertiliser and other chemical leaching started impacting the natural systems, including aquatic and terrestrial biomes. Biodiversity depends on a healthy habitat – insects, reptiles, birds, and mammal populations plummeted whilst agricultural, forestry and fisheries expanded.

As all systems are connected, human health issues also emerged out of this bloom. The gap between inputs and output narrowed. Conventional farmers started to battle to make ends meet. To make matters worse, food production and food processing were recognised as a major contributor to global warming and there was a realisation that there is no substitute for food, especially good, healthy food.

41

FOOD SECURITY

Arable land is a finite resource and its treatment and management are intricately linked to the health of the planet.

Although the world’s political and policy environment was changing, nations started paying attention to global warming. Initiatives such as the United Nations Sustainable Development Goals were developed and adopted, implementation of any big impact mitigation measures was slow, especially in agriculture. The feel-good story of the green revolution started rotting. Intervention was desperately needed! What was going to be the outlier to balance and reverse these feedback loops?

Large-scale global governmental intervention and regulation was not proving to be effective.

Unexpectedly, the change agent ended up being the advent of the Internet and specifically social media. This unlikely hero started rapidly changing the narrative away from “the good, the bad and the

42

FOOD SECURITY

ugly” trajectory that could only end in disaster towards sustainable and regenerative agriculture. There were always better ways of farming, working with nature to produce nutritious, healthy food, but this knowledge had almost been drowned out by the collective marketing juggernaut of profitable agribusiness.

Search engines like google and information platforms like TEDx fuelled consumer activism. The customer of this age, armed with knowledge (not always all good nor truthful) and using social media platforms such as Facebook, now had the real power and the market started responding.

This is a positive move, not only for agriculture but for the environment and society as a whole. The famous analogy of the three-legged pot with the pillars of finance, environment and society will continue to fall over if not balanced urgently. Arable land is a finite resource and its treatment and management are intricately linked to the health of the planet.

Customers, shareholders, and investors now want transparency regarding sustainability and ethical practices of the food production chain and

they want to know how agribusiness is managing and responding to environmental, social and governance (ESG) risks and opportunities.

Various standards, such as sustainability and investment standards, have been put in place across the agricultural value chain. This together with increased public awareness, for example, the Kiss the Ground Netflix programme are driving this positive change.

Interestingly the next “revolution” is being fuelled not only by human ingenuity, research and technology, but it is also being coupled with age-old knowledge, traditions, and deep understanding about the intertwined systems, ecosystems and dependencies on which we rely.

You don’t need to look far to see examples of these – from the “old” (crop rotation, minimal tillage, cover crops, companion crops) to the “new” (permaculture, hydroponics, aquaponics, biomimicry, biodynamics, agritechnovation) to name but a few.

Responsible production and investment in agriculture and food systems are being rapidly implemented and are critical to food security, human nutrition, climate change and environmental sustainability.

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WATER

Gamtoos farmers’

DILEMMA W

ith the dam level hovering at around 10% capacity in early 2021, the situation for the year ahead seems as dire – which is why the Gamtoos Irrigation Board (GIB) that manages the dam’s water, is focusing on water demand management.

Currently, 132 farmers are reliant on the Kouga Dam. Also, a portion of the dam’s water is diverted to the nearby Sarah Baartman District and the Nelson Mandela Bay Municipality for their residents’ usage.

Rienette Colesky, CEO of the irrigation board, explains the practicalities of managing a major dam in the region when the level drops to the 10% mark. “The water is turned off on a Thursday and then back on again on a Sunday night,” she says, adding that effectively, farmers receive their monthly water allocations in quarterly amounts.

“Meters are read twice a month, and these readings are supplied to the farmers so that they can plan in terms of their water usage. Usage differs depending upon the seasons. A full allocation of water from the dam equates to 8 000m³ per hectare of land farmed. Under the restrictions, farmers receive 1 600m³ per hectare. Farmers know that water demand management is a legal matter,” she explains, adding that if water users go over their allocations, their supply is switched off.

The kind of farming undertaken in the area comprises citrus, dairy and cash crops – each of which is affected by the restrictions. Citrus farmers struggle to keep their trees, even on an allocation of 40% of users’ annual water allocations. This means that they must decide whether to keep their older trees in a bid to yield a crop, or instead cull those orchards and keep the smaller, newer ones which use less water. The problem with citrus is that trees only bear fruit after about four years, so in a bid to keep younger trees, a farmer loses out on a harvest.

For dairy farmers, the issue is grazing. The restrictions that have been

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Since June last year, farmers in the Eastern Cape’s Gamtoos River Valley have had to make do with just 20% of the annual water allocations from the Kouga Dam.

BY THE GAMTOOS IRRIGATION BOARD

imposed in the valley area are not the same in other areas, so farmers may move their herds, for example, to nearby Oyster Bay, which is not dependant on the water from Kouga Dam. Other coping measures include buying in feed, says Colesky.

Cash crop farmers in the Mondplaas area face a particular predicament especially the farmers who grow strawberries and blueberries. The nature of the irrigation is that crops need less water, but more often. With the water supply from the dam being shut off for a period of time each week, this type of irrigation becomes tricky to maintain.

The knock-on effects of the drought extend into the communities in the valley. There are pre-packaging facilities in the area which have contracts to supply major retailers with their products. Loss of such contracts through failure to deliver could have dire consequences on the livelihoods not only of the farmers but also of their employees. Some farmers have moved their planting out of the valley – an action which has had an economic effect on the community.

Despite what appears to have been decent rains in recent months, Colesky says it has not been in the Kouga Dam catchment area, the Langkloof. Unless between 200 and 300mm of rain falls in the catchment over a relatively short period, the Kouga Dam level will remain relatively unchanged, she says. Making every drop of water count starts with a dedicated infrastructure maintenance plan, adds Colesky.

“Every reported crack or leak is dealt with immediately, and in a year like last year when there was an 85% water allocation [prior to the 2020/21 water year 20% restriction], a loss of just 12,3% was recorded. It is clear then, that with the constraints on water supply, the process of water demand management is vital for the survival of the community.”

Gamtoos Irrigation Board is passionate about service delivery and the effective provision of water to all users at an affordable price. We are proactive in the face of environmental and socio-economic challenges, and are working hard to transform, preserve and protect our water scheme. Water is the lifeblood of agricultural production in the Gamtoos River Valley. By supplying both our established commercial agricultural users and our emerging farmers, we are helping to ensure food security for our people.

www.gamtooswater.co.za

We are moving forward.

ENERGY

WIND POWER AND THE AGRI SECTOR

have a symbiotic relationship The gazetted amendments to the electricity regulations on New Generation Capacity, as announced in September 2020, has paved the way for municipalities, in good financial standing, to be able to either develop or obtain their power-generation capacity from Independent Power Producers (IPPs). This offers another avenue of potential income for South African farmers, who have the land that can accommodate either wind or solar power.

BY SAWEA*

“T

his decentralised way of procuring power is a step closure to a broader energy transition that the country needs to increase its power generation, which will sustain local economic activity and can further support the farming community,” says Ntombifuthi Ntuli, CEO of the South African Wind Energy Association (SAWEA).

Opportunities for South African farmers already exist as thousands of hectares of rural farmland is already being leased by utility-scale wind farms, and solar projects, across the country. This model offers farmers an additional income stream, while they continue to farm the land, especially in the case of sheep and cattle farming, on wind farm sites.

The money earned by farmers, from leasing their land to wind producers, is a stable source of income and can help protect the farm from yield fluctuations or poor crop yields during drought years. It can also allow them to reinvest in their farming business by purchasing new equipment or making other improvements.

Additionally, where turbines and related infrastructure are installed, farming can continue right to the base of the turbine. According to studies, typical wind farms leave 98% of land undisturbed, meaning it’s free for other uses. Plus, the construction process often includes updating or building new roads, which can improve farming operations.

Furthermore, numerous wind farms support small agricultural enterprises, many of them emerging farmers, based in their beneficiary communities, located within a 50km radius of the power plants. Shaw’s Pass Emerging Farmers, in the Hemel and Aarde Valley, is an example of this, as the co-op of 30 emerging farmers, situated close to Klipheuwel Wind Farm, is receiving funding to help develop them into a sustainable farming enterprise that can raise close to 1 000 pigs for the region’s meat market.

The wind farm has funded this, as part of its enterprise development programme, with support including a repository of animal feed, comprising of 30 tons of pig feed, stored in a central depot. This provides a store that the farmers purchase required feed from, thereby generating funds that are used to build suitable piggery infrastructure. This sustainable model is already underway and is proving a successful way of benefiting this co-op as a whole.

Similarly, this wind farm is also supporting emerging famers, Gougakhoi Cattle and Crop Co-Op, in Riviersonderend, who receive funding and business support to help improve the standard of their herd, thereby

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Jeffreys Bay Wind Farm. driving income for the co-op to become more sustainable and thereby stimulating local job creation.

“Wind technology is similar to the philosophy behind sustainable agriculture, namely, to harvest resources without jeopardising future needs; protecting biodiversity; developing communities as well as social and economic equity,” explains Brad Ker-Fox, who manages several sustainable agricultural projects for beneficiary communities, on behalf of Jeffreys Bay Wind Farm.

As a wind farm, that harnesses the abundant renewable resources, it stands to reason that sustainable farming development programmes are supported and funded as part of economic development initiatives.

A different type of symbiosis exists between wind farms in the Northern Cape, who have been supporting farmers across the Karoo by providing drought relief in the form of fodder to feed their cattle, following the massive decrease in rainfall that has plagued the region. Specifically, Kangnas Wind Farm reached out to the Boesmanland Farmers Union comprising 34 members, including emerging farmers, all of whom have been struggling for five consecutive long years, following the normal rainfall having dramatically decreased from around 100mm to only 30mm per year. These farmers are all in the Springbok area, including Gamoep and Pofadder, all the way up to the Orange River. * The South African Wind Energy Association

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