Urban Green File published this article by Adam Gunn in its October 2008 issue.
South Africa scores poorly on an international environmental performance index. Does this mean our country's environmental policies and laws are on the wrong track?
Are South Africa's environmental policies and laws on the right track? This is a question which I found myself asking after reading the July 2008 edition of Newsweek. The publication is largely dedicated to environmental issues and contains a summary of a recent environmental performance study conducted by Yale and Columbia universities. The study aims to measure the environmental performance of 149 of the world's countries by providing a quantitative index, which ranks each country's environmental performance – the Environmental Performance Index (EPI). Certain countries were excluded from the EPI as only those countries which could provide reliable data could be included.
South Africa Scores Poorly
The authors hope that the information will assist policy makers around the world making more effective environmental policies. The contention is that policies based on scientific data will be more effective than those not based on scientific data. South Africa ranks a lowly 97th on the EPI and scores 69 for its environmental performance where 100 is an optimal environmental performance and 0 is dismal. The indicators used for calculating the EPI include the environmental burden of disease, sanitation, provision of drinking water and water quality, critical habitat protection, forest cover change, marine protected areas, irrigation stress, intensive crop land, greenhouse gas emissions per capita, agricultural subsidies, emissions of greenhouse gasses per kilowatt hour of energy produced and industrial carbon.
The authors point out that a country's ranking on the overall index is less important and relevant to policy makers than the actual reasons for its performance. Nevertheless in a country which prides itself on its comprehensive environmental laws and responsible corporate citizens who are environmentally-aware, South Africa's poor performance is cause for concern. This begs the question: whether the approach to environmental regulation that has been adopted in South Africa is the correct one. Is it working and, if so, why does South Africa perform so poorly?
South African environmental legislation is largely based on the traditional "command and control" model where the threat of punishment is designed to deter any aberrant behaviour. This is particularly evident from the recent National Environmental Management Amendment Bill whereby the fines and penalties associated with contraventions of environmental laws have been greatly increased. Some sanctions for contraventions of our environmental laws will be accompanied by a fine of R10-million and/or 10 years in jail. However strict penalties have been established in some of our environmental legislation for some time and it seems to have had little effect.
Incentives Required
An alternative approach to this model is to incentivise environmental compliance by providing financial rewards. The Newsweek article notes that a particularly good example in this regard is that of Germany. While there are significant differences between Germany and South Africa in terms of their development status and country needs, there are similarities in their previous environmental track record. It could be said that South Africa is today in its environmental performance where Germany was 15 years ago. The German policy makers believed that the solution was to incentivise good environmental performance by adopting the motto of "being green pays". South Africa has precious little of this type of environmental legislation. Tax incentivisation does exist for environmental performance mainly in the form of tax deductibility of mine rehabilitation funds and more recently in Section 37B of the Income Tax Act whereby certain expenditure associated with improving ones environmental performance is deductible.
The question of whether to incentivise or punish is a complicated one and the solution is, by no means, simple for the policy makers. However perhaps the time has come to put away the "big stick" and to explore ways to improve environmental performance by making it rewarding financially. This is possibly already happening as the Minister of Environmental Affairs and Tourism Marthinus van Schalkwyk has challenged companies to become more energy-efficient and to improve their environmental performance before legislation is brought into effect that will require them to do so. The stick is still evident, however, as, in the same announcement, he revealed that government is considering imposing a carbon tax.
Companies will have to think creatively and "outside of the box" if they are to meet the challenges of moving towards a low carbon economy and improving their environmental performance.
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