LGSETA | Sep 30, 2021

Green manufacturing as a tool of addressing youth unemployment and promoting sustainable local economic development

This article identifies the possible role that municipalities can fulfil in the promotion of green manufacturing as a tool to advance local economic development (LED), on the one hand, and youth unemployment on the other. In doing so, this article will explore some of the examples in which local governments have successfully achieved this in practice.

Green Manufacturing in Context

Green manufacturing may be defined as the renewal of production processes and the establishment of environmentally friendly operations within the manufacturing field. Essentially, it is the 'greening' of manufacturing, in which workers use fewer natural resources, reduce pollution and waste, recycle and reuse materials, and moderate emissions in their processes.

In recent years, the green economy is being advocated as one of the solutions to address the multiple crises that the world is experiencing, which includes – climate change, food insecurity, and economic crises coupled with a rise in poverty and social inequality. As an example, the United Nations Environment Program (UNEP) proposed a ‘Global Green New Deal’ to revive the global economy and boost employment while simultaneously accelerating the fight against climate change, environmental degradation, and poverty.

Over the past decade, the number of companies manufacturing green products and adopting green technologies has increased materially. Numerous initiatives to promote the rise of green manufacturing have been launched in South Africa. For example, the National Cleaner Production Centre is a national programme of government that promotes the implementation of resource-efficient and cleaner production (RECP) methodologies to assist industry to lower costs. The Centre actively supports resource efficiency in industries. It is at the forefront of the advancement of green manufacturing in South Africa and plays a leading role in the African Roundtable on Sustainable Production and Consumption (ARSCP).

Tax incentives are also available to companies aiming to invest in renewable energy, energy efficiency, research, and development, as well as state-of-the-art technologies. The Atlantis Special Economic Zone (SEZ) in the Western Cape, is one of the initiatives which focuses on green technologies and is envisaged to further contribute to the uptake of green manufacturing technologies in the country.

While Green Manufacturing as an industry and the ‘green economy’ as a whole is relatively new in South Africa, the government is committed to implementing more efficient and environmentally friendly practices. As such, the Green Economy Accord was signed in November 2011 by government, organised labour, business, and communities (women, civic structures, youth, people with disabilities, and cooperatives). One of its key commitments is to promote economic development in the green economy through localisation, youth employment, cooperatives, and skills development. Moreover, of the objectives stated in the accord include, the creation of job opportunities, support for innovation drawn from technology, greater responsibility from government for the green economy, and improved partnerships with all the relevant stakeholders. In summary, the accord points to the need for an enabling environment in which government works collaboratively with its’ citizens so that the green economy may serve as an entry point to meet these objectives.

Another cause that the government of South Africa is committed to is youth empowerment. The Youth Employment Accord was signed by the government together with various social partners in April 2013. The Accord states that a comprehensive strategy for youth employment is necessary. The strategy focuses on six areas, namely,  (a) education and training (b) work exposure (c) public sector measures (d) private sector measures (e) youth target set-asides (this refers to targets that are identified for new industries in which large numbers of the youth can be employed) and (f) youth entrepreneurship and cooperatives.

It is argued, that the green economy thus presents an opportunity to engineer mechanisms in which the Youth Accord may be fulfilled.

It is further suggested that the governments’ initiatives with respect to the green economy and youth is a step in the right direction. There is well-established evidence that demonstrates how energy efficiency saves industrial firms money, increases the reliability of operations, and has a positive effect on productivity and competitiveness. In addition, municipalities are duty-bound to promote sustainable economic development as mentioned below.

The Roles of Local Government and Green Manufacturing in the Promotion of Local Economic Activity (LED)

Municipalities are mandated to promote economic activity and provide services in a sustainable manner. This mandate stems from the Constitution of the Republic of South Africa, 1996. Section 152 of the Constitution provides for the objects of local government which include the provision of services to communities in a sustainable manner and to actively encourage a safe and healthy environment.

Municipalities are further empowered in terms of relevant legislation and regulations, such as the Municipal Systems Act of 2000 to create and foster an environment that is conducive to economic development, job creation, and sustainability. The green economy provides an opportunity for municipalities to stimulate development and further environmental sustainability goals. It, therefore, stands to reason that municipalities would do well to invest in and promote green manufacturing initiatives and techniques.

Key Insight: Government and the private Sector

Notwithstanding, local government’s role to facilitate the green economy and youth employment the private sector also has an important part to fulfil. For example, the private sector needs to build infrastructure and recycling plants, etc while the government should rather implement instruments that can drive the demand for recycling within the legislative framework. This would entail incentives that strengthen responsible green practices and enhancing stakeholder relations. Government needs to acknowledge this role of being an enabler through the development of its strategy towards green manufacturing.

Green Manufacturing to Promote LED

Broadly speaking, the 'green economy' has been defined as a 'system of economic activities related to the production, distribution and consumption of goods and services that result in improved human well-being over the long term, while not exposing future generations to significant environmental risks or ecological scarcities.' Implicit in this definition are two key outcomes: (i) the  '[g]rowing economic activity (which leads to investment, jobs and competitiveness) in the green industry sector' and (ii)  '[a] shift in the economy as a whole towards cleaner industries and sectors'. Green manufacturing, therefore, forms a key part of the broader green economy. This article looks at the production of electricity through solar power as a means to increase employment (including youth employment) and to increase the prevalence of green manufacturing methods (with electricity being a key input of the manufacturing process).

Electricity through Solar Power
Solar power is energy that is generated from the sun and converted into electrical or thermal energy. It is the most abundant and cleanest source of renewable energy on the planet and can be used to, amongst others, generate electricity, water heating and industrial purposes. When photons (i.e. small particles comprising of electromagnetic radiation) are emitted from the sun, and hit a solar cell, they separate electrons from their atoms. If solar panel conductors are attached to both the positive and negative sides of a cell, it creates an electrical circuit. When electrons flow through a circuit, as mentioned above, electricity is generated. Multiple cells make up a solar panel, and several panels (called modules) can be wired together to create a solar array. The more panels are deployed, the more energy is expected to be generated.

South Africa Electricity Requirements

The South African economy requires approximately another 4000 megawatts of electricity to function without any interruption. It is for this reason that we are currently experiencing load shedding and expect to experience load shedding for the next five years (or even longer). This places substantial pressure on the South African economy. As a consequence, it is predicted that the knock-on effect would be that municipalities will generate less revenue. Notably, businesses and individuals will also struggle to pay their service delivery bills which may result in a decline in the demand for certain services. This may negatively impact municipalities’ ability to remain financially viable.

Manufacturing Opportunities from Solar Power

Utilising solar power in the manufacturing process has the clear benefit of greening the manufacturing sector, therefore contributing to an increase in environmental sustainability. There are further benefits to be found in promoting the production of solar power - these benefits include:

  • opportunity for localisation of the production of solar panels and batteries;
  • maintenance of solar plants and equipment;
  • more reliable supply of electricity, thereby assisting the manufacturing sector to grow;
  • improvement in municipal service delivery, contributing to a more satisfied constituency; and
  • potential for municipalities to generate more revenue through the provision of solar power

Economic Benefits from Solar Power

According to the Western Cape Provincial Government (WCPG), '[w]hen it comes to the economy, COVID-19 is a "left hook", and load shedding is a "right hook", which together often results in a knock-out blow which risks compromising economic recovery'. This is part of the reason for 6 municipalities in the Western Cape moving to solar power. It is anticipated that moving to solar power will reduce the instances of load shedding in these areas and, therefore, put the municipalities in a position where they can provide electricity more reliably to their constituents.

Other Green Manufacturing Opportunities

Two key opportunities for economic development lie in recycling and community development through sustainable resource use. One example, of recycling is provided by the City of Cape Town. The City succeeded in pioneering an approach to manufacturing municipal wheelie bins from recycled material. The initiative was also innovative insofar as it utilised a public-private partnership to ensure the supply of the wheelie bins while at the same time increasing job creation in the manufacturing process.

A further example can be found in the Eastern Cape.  The Chris Hani District Municipality has successfully implemented the 'Sustainable Villages'  project that not only provides food to learners through gardening but also encourages the development of sustainable energy resources. This project began as a youth and school-based project and has since grown to become a flagship sustainability project for the District Municipality.

Another opportunity within green manufacturing is the promotion of localisation of key manufactured materials. At present,  South Africa imports most of its materials such as plastics and fertilisers. However, a policy shift towards local development will call for the strengthening of localisation within the green manufacturing industry. For example, improving the plastic recycling industry in the country will mean that South Africa is less reliant on plastic imports. This would save a vast amount of money in the form of import taxes and the cost of shipping the materials to South Africa. Thus, any approach to a greener economy needs to be focussed on policies that allow for the circulation of materials within the immediate economy.

Local government can encourage local businesses to commit to locally produced goods. For example, by implementing a policy that supports initiatives such as ‘The South African Plastics Pact’, a collaboration that brings together key stakeholders from the local plastics value chain, including businesses, the South African government, Producer Responsibility Organisations (PROs), NGOs and other key players. Moreover, the private sector commits to supporting recycling companies even if the price of recycled material is higher than the virgin material. In essence, local government needs to apply a broader approach to developing policy which goes beyond financial measures but takes into account the effect on the environment and future sustainability. The bigger picture of creating sustainable and greener manufacturing processes needs to be the focus of any strategy. A commitment to using recycled material is crucial to the success of the industry, and the same can be said for other industries within the green economy.

Green Manufacturing and Youth Employment

A greener economy presents new opportunities, with the potential to generate up to 60 million jobs globally over the next couple of decades. Unemployment amongst the world’s 1.2 billion youth (aged 15-24) is far higher than for adults and the economic impact of COVID-19 is set to make the job market even more challenging for youths. Green manufacturing, or similar green initiatives, can thus provide a viable path for young people to earn a living and help address their communities’ needs while advancing LED.

A green economy, as well as the emergence of the 4th industrial revolution, presents opportunities to green the manufacturing sector and its processes. These include, among others, 3D printing, collaborative robots and automation. This offers the potential, not only for new jobs to be created but also for existing jobs to change, which requires adjusting, training and skills development relevant for green jobs – this makes younger people, who naturally have higher neuroplasticity, well positioned for these new opportunities.

Other opportunities include the circular economy or utilising recycling in manufacturing. This unlocks employment opportunities in the waste collection space as well as the manufacturing space.

Conclusion

The potential for the creation of new jobs within the green economy, including green manufacturing, is vast. Solar power has been identified as a potential avenue to not only create direct jobs through the growth of a specific manufacturing sub-sector but also through strengthening the manufacturing sector in general through the provision of reliable, sustainable, and cost-efficient electricity.

The employment opportunities that a green economy and particularly green manufacturing unlock, are key to the development of young people, whose creativity will contribute to ensuring a sustainable green economy. Therefore, given that approximately 33,000 young people are expected to enter the job market daily between now and 2050, green manufacturing and similar green initiatives are specifically attractive as tools to combat unemployment among youth.

 

This article is part of a series reporting on research commissioned by the Local Government Sector Education & Training Authority (LGSETA) (Contact: matodzir@lgseta.org.za) 

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