Climate Change: The Potential Impact On The It Industry In South Africa

1. Introduction:

The purpose of this document is to investigate the impact of climate change on the Information Technology (IT) industry in South Africa. Initial investigation will be into what is happening to the global and South African climate based on recent studies and academic papers. By then examining the impact of climate change on each sector, and by examining the percentage of IT spend per sector, the impact on IT during our lifetimes can be extrapolated.

2. Global Climate Change; South African Impact

2.1. The average global temperature has historically varied significantly creating periods of cooling (ЎҐice-agesÐŽ¦) and warming. Evidence shows that the worldÐŽ¦s climate is warming. AfricaÐŽ¦s climate has warmed by about 0.5„aC during the 20th century (Nkomo, Nyong & Lulindwa, 2006). The debate over if climate change is caused by humans or not is beyond the scope of this document, however it has been shown historically that there is a direct correlation between CO2 levels and global temperature (see Appendix 1). The Stern Review on the Economics of Climate Change (2006) argues that urgent action needs to be taken to stabilise the CO2 levels in the atmosphere. At current CO2 output, this could result in a 2„aC increase in average global temperature by 2050.

2.2. Global warming is expected to have a generally warming and drying effect on most of Southern Africa (Fairbanks & Scholes, 1999), with a decrease in precipitation of 5 to 10% (IPCC HadCM2 General Circulation Model).

2.3. Logically agriculture, forestry and related industries such as alcoholic beverages, foodstuff exports and pulp and paper will be most affected. Even taking into account the expected fertilisation effect of increased CO2 levels, it is expected that forestry output will decline by 48% (Fairbanks and Scholes, 1999). Maize production, a Southern African staple, is predicted to be reduced by between 10 and 20% depending on geographic location (Kiker, 2000). As warming will allow northern countries to increase food production, it is not anticipated that there will be a global shortage of food. South Africa may become a net importer of food.

2.4. Gauteng accounts for 34% of South AfricaÐŽ¦s GDP (Johannesburg News Agency, 2007). Manufacturing and electricity generation require vast amounts of water.

2.5. Sea levels are expected to rise by up to 1 meter (Nicholls, 2003)

2.6. An increase in the severity and impact of extreme weather is predicted.

2.7. Tourism is expected to be affected negatively by up to 36% or an estimated 3% of GDP due to loss of biodiversity (Turpie, Winkler, Spalding-Fecher & Mingle, 2002).

2.8. Warmer temperatures will increase the risk of vector-borne disease such as malaria by up to four times in South Africa (Turpie et al, 2002). Githeko and Ndegwa (2001) found a five-fold reduction in GDP in areas where malaria is prevalent which could be attributed to the loss of production by factors of production from illness and death. The private healthcare sector may benefit from increased patient numbers.

2.9. Climate change may result in an influx of climate refugees into South Africa.

3. Mitigation of Climate Change:

3.1. The Kyoto protocol identified CO2 as the major contributor to climate change and seeks to reduce carbon and other emission levels of industrialised countries by 29% overall by 2010 (UNEP Press Release, 1998).

3.2. If emission reduction is required by legislation in South Africa, this may have negative impacts on electricity, manufacturing and transport industries.

3.2.1. The majority of South AfricaÐŽ¦s electricity production is from coal-fired power stations which have high emissions levels and use huge amounts of water. However there are business opportunities:

3.2.1.1. The Department of Trade and Industry announced that the construction of a second conventional nuclear power plant has been approved (DTI press release, 2007). China is building 30 new conventional nuclear power stations, providing opportunity for mining and beneficiation due to large uranium reserves.

3.2.1.2. Clean, renewable energy such as solar and wind energy are viable and potentially profitable industries, for example by developing new markets for households to have their own solar panels for their own use and to sell excess back into the national grid.

3.2.2. Government has approved a draft biofuels strategy which aims to produce 6.3 million barrels of biofuels per annum by 2013. (Brink, Biofuels Industry Development press release, 2007). A US$ 1 billion biofuel plant is to be constructed in the Free State as a prototype and is expected to have a turnover of R550 million per annum contributing up to 0.05% of South AfricaÐŽ¦s GDP. Another 7 plants are planned. There are further benefits to the economy such as reduced imports of petroleum products, export opportunities and insulation from the effects of volatile oil prices.

3.2.3. Global car-companies are developing hydrogen-powered and electric-hybrid vehicles. The introduction of H2 vehicles will create opportunities in the conversion of facilities from petroleum to H2 product.

3.2.4. Emissions reduction in manufacturing will require capital investment for conversion of plant and machinery.

3.3. Carbon Capture and Storage (CCS)

3.3.1. Carbon Capture has the potential to significantly reduce the emissions of CO2 into the atmosphere, which needs to be stored. This is capital-intensive and is not likely to be implemented in South Africa in the near future. However this process does provide potential opportunities for new businesses.

4. IT and Climate Change Mitigation:

4.1. IT companies need to take an active role in mitigation of climate change, for example Xerox has developed new chemical ingredients for printer toners that has reduced energy consumption by 22%. (Groenendaal, ITWeb, 2006)

4.2. A 2006 ETNO and WWF report concludes that IT can directly assist in mitigation of climate change by increasing the prevalence of video conferencing, audio conferencing, flexi-work, online billing and web-based tax returns. The estimated total saving could be 47 million tonnes of CO2 per annum.

5. Adaptation to Climate Change

5.1. Due to potential negative impacts on agriculture, it is entirely possible that South Africa will need to import food.

5.2. Water:

5.2.1. It has been identified