Mr Speaker

Climate Change has become one of the most important agenda points on the global stage, dominating discussions at the level of multi-lateral institutions like the United Nations, as well as discussions at the G-8, winning Oscars for Al Gore's "The Inconvenient Truth" and more recently also gaining prominence in discussions at the World Economic Forum on Africa held in Cape Town last week.

The Premier, in his State of the Province address earlier this year, made Climate Change a key priority for the Provincial Government of the Western Cape . As the Department of Environmental Affairs and Development Planning is the lead department dealing with this matter, it is therefore appropriate that I focus my Budget Speech on what we have done and what we will be doing about Climate Change in the Western Cape . This will certainly be one of the key areas of work in this department in the coming years and we are committed to providing leadership in this regard.

In the Stern Report on Climate Change, Sir Nicholas Stern issued a stern (pardon the pun) warning: "It is still possible to avoid the worst impacts of climate change; but it requires strong and urgent collective action. Delay would be costly and dangerous."

The Provincial Government of the Western Cape understood that we would have to provide leadership with regards to the potential impacts of Climate Change on our Province. In 2005, Cabinet tasked my Department to take the lead in firstly researching the risks and vulnerabilities that we may face and secondly, to develop a Response Strategy to deal with these.

In my Budget Speech last year I reported that we had completed the first phase of this work and published the study "A Status Quo Vulnerability and Adaptation Assessment of the Physical and Socio-Economic Effects of Climate Change in the Western Cape ". Included on the team that did the work on this study were two of our most esteemed scientists, who are not only doing work on the National Climate Change Strategy but are also members of the Inter-governmental Panel on Climate Change (IPCC), Dr Guy Midgley and Prof Bruce Hewitson.

The study confirms the findings of the National Study done by DEAT, that the Western Cape is one of the Provinces in South Africa that will be most vulnerable to climate change irrespective of local or global efforts to reduce greenhouse gas emissions. Some of the key findings include:

• An increase in the annual average temperature of at least 1 ºC by 2050
• An increase in the frequency and intensity of extreme events
• An increase in conditions conducive to wild fires (higher temperatures and increased wind velocity)
• Reduced rainfall in the western parts of the Western Cape
• Decreased water resources
• Reduced soil moisture
• Temperature impacts on crop activities

The Study also highlights the following vulnerable systems and sectors:

Our Natural Systems - water, biodiversity and coastal and marine systems and resources

The availability of water is essential for livelihoods, industry and other natural resources. Many areas in the Western Cape already experience water stress and this pressure will increase with climate change. Furthermore, climate change will place pressure on our important biodiversity with the real risk of about 35% of the Fynbos and the Succulent Karoo species facing extinction. The Province's coastline is sensitive to sea-level rises and will impact on the coastal ecology especially our 50 estuaries which are important links in the economic and ecological value chain. Estuaries are important feeding and nursery grounds for shellfish, fish and bird species.

• Economic Sectors - agriculture, tourism and fisheries

Agriculture systems have an inherent level of adaptive capacity to climate variability and change. The degree of climate change does however test the limits of this autonomous adaptive capacity, and many aspects of agricultural life in the province are already found to be at, or close to, their thresholds. The agri-business units at highest risk will be:

• Those that are already stressed economically and / or biophysically as a result of land degradation, salination and loss of biodiversity
• Those at the threshold (or close to) of their climate tolerance
• Emerging farmers who may have limited capacity, resources and skills to adapt and withstand economic pressures
• Rural livelihoods who depend on agri-business based economic activity for jobs
• Commercial farmers where significant long term investments have been and are being made, for example in irrigation systems, processing facilities and some cultivars
• Agri-business activity that is dependent on the export market which is adapting to climate change in itself, for example importers such as Marks & Spencer moving toward a carbon-neutral status and transferring this pressure onto suppliers and the ever increasing focus internationally on reducing food-miles . Let me pause here to acknowledge the presence of Mr Michael Back in the gallery. He is the owner of Backsberg Wines and is the first wine producer in the country to have a carbon neutral branding on his wine. I would like to thank him for his innovation and leadership in this sector. It is an example of the responsiveness we need to adapt to the changing global demands.

Fisheries are sensitive to climate change and risks. Communities that depend on the resource as well as the commercial industry are at risk. The last 8-10 years have seen significant financial investment in the sector and that investment is potentially at risk due to climate impacts. We are already witnessing the impact on the West Coast with the migration eastwards of fishing stock.

The tourism sector in the Western Cape is largely dependent on international (European) tourists who are increasingly becoming conscious and sensitive to international adaptation and mitigation responses to climate change. The introduction of a carbon tax on air travel may, for example, discourage long-haul tourists who in turn will seek destinations closer to home, thus making travel easier on the pocket. Also, tourism places stress on scarce resources such as water. Increased air pollution may impact negatively on tourism, and threats that climate change poses to the province's Cape Floral Kingdom and our coastal infrastructure and beaches are also of concern.

• Economic resources and infrastructure - energy, transport, health and air quality

Demand for energy is temperature sensitive. Electricity supply is sensitive to both extreme weather related events and in some cases temperature itself as it degrades transmission capacity. Infrastructure for electricity distribution is also susceptible to the impacts of increased bush fires. The Western Cape 's energy infrastructure has demonstrated its reduced capacity to sustain cumulative impacts. The failure in supply of high quality energy that the province has come to rely on brings much higher social and economic costs than ever previously experienced.

The transport sector is already stressed and development planning has impacted negatively on the sector in that communities are being established further and further away from economic nodes. The sector is a significant contributor to provincial greenhouse gas emissions and growth in demand will only serve to exacerbate this problem. In addition, local air quality is impacted on by transport.

Air quality can be sensitive to increased temperatures as well as to increased greenhouse gas emissions and increased demand for local fuels such as paraffin and wood. Local and indoor air quality impacts on health and could, as mentioned affect economic activities such as tourism. Climate change and failure to mitigate, may contribute to increased severe air pollution episodes.

Other health impacts arise from increased penetration of Invasive Alien Species as a result of climate impacts such as increased temperatures combined with drying.

Some species contaminate water, increasing the risk of disease. Poor air quality (pollution) contributes to increases in respiratory diseases. Other vector borne diseases may also arise as a result of climate impacts.

• The Built Environment, Livelihoods and Disasters - social systems, extreme events (floods, fires)

Exposure of the province's cities and settlements to climate risks is high but the sensitivity to change is dependent on the way climate change impacts on extreme events. The planning and development of our built environment and urban areas can be used to manage and control climate impacts. But some of the provincial infrastructure and various communities are already threatened by having been established on unsuitable sites, due to poor planning, for example housing developments and informal settlements on sites vulnerable to flooding or coastal infrastructure below the high water mark.

Damage, injury and death as a result of increased extreme events are particularly strong consequences for livelihoods, settlements, and emergency services. In many of the provincial urban and rural centres, increases in severe weather events linked with climate change such as fires, heavy rainfall, high winds and increased heat waves could cause significant damage. This would be worsened in areas experiencing increased population density, such as Cape Town and George.

Given the vulnerabilities and risks identified, the study reaches the following, as the Premier put it in his State of the Province address earlier this year, "chilling" conclusion:

"The Western Cape faces the real possibility of socio-economic impoverishment as a result of climate change"

This is confirmed in the Stern Report " The impacts of climate change are not evenly distributed - the poorest countries and people will suffer earliest and most."

We can therefore clearly assert that for the Western Cape and other developing regions, Climate Change is a Poverty Issue!

We have to act now and act decisively. We have to prepare ourselves through adaptation, and we have to act to also minimise the impacts through mitigation.

At our recent Renewable Energy and Climate Change Summit, the Premier warned us not to take an alarmist approach to Climate Change and that we must try and find solutions to our problems in unexplored and sometimes uncomfortable areas.

Climate Change Strategy and Action Plan

Our Climate Change Strategy and Action Plan, currently in final draft form, acknowledges the Premier's challenge. We accept that Climate Change brings with it both Constraints and Opportunities.

The Response Strategy and Action Plan aims to strengthen the Province's resilience and its adaptive capacity to climate change, especially in our vulnerable communities and economic sectors. It also aims to maintain the Western Cape 's status as a relatively low greenhouse gas emitter.

The Strategy builds on the work already done in the province and sets out our direction now and for the longer term. It sets out the Government's commitment to:

• Leading the response to climate change in partnership with other tiers of government, research institutions, industry and the community
• Planning and adapting now and into the future to minimise possible adverse impacts from climate change and to position the province to take advantage of emerging opportunities
• Focusing on the fact that water is already a scarce resource that is extremely vulnerable to climate change impacts
• Developing renewable energy and energy efficiency options and minimising our greenhouse gas emission levels
• Continuing to improve our knowledge of the impacts of climate change
• Informing and involving our industry sectors and the community to ensure they are better able to adapt and respond to the challenges associated with a changing climate.

We have prioritised our actions by analysing in a rigorous way the following:

• A cost effectiveness analysis - assessing the cost of taking action versus the cost of a "business as usual" approach
• Ease of implementation
• Social impact - will the action have a positive or negative social impact and will it compromise the goals of sustainable growth and development in the Western Cape ?
• Environmental effectiveness - will the action have a neutral or positive impact on the environment

Having placed all our possible response options through this matrix we have now prioritised the following critical areas for our Programme of Action:

• An integrated Water Programme
• Land Stewardship, Livelihoods and the Economy
• Research, Monitoring and Validation
• Reduction of our Carbon Footprint

The Department has already been hard at work through a number of interventions which will have an impact on achieving the short and medium term goals of the Action Plan. We need to be ahead of the game. We need to be responsive to the ever-changing global demands related to climate change and position ourselves to take advantage of the opportunities available to us.

As the Stern Report asserts "The transition to a low-carbon economy will bring challenges for competitiveness but also opportunities for growth. For the economy as a whole, there will be benefits from innovation that will offset some of these costs. All economies undergo continuous structural change; the most successful economies are those that have the flexibility and dynamism to embrace the change. There are also significant new opportunities across a wide range of industries and services. Markets for low-carbon energy products are likely to be worth at least $500bn per year by 2050, and perhaps much more. Individual companies and countries should position themselves to take advantage of these opportunities."

The Western Cape is well-placed to take advantage of the opportunities. We have a diversified economy, largely knowledge-based, strong innovative sectors, an internationally recognised intellectual base, existing players in key sectors like the renewable sector as well as a population that have already felt some of the impacts through electricity outages, water restrictions and flood and fire damages.

So we are ripe and ready for change.

I will now deal with what we are currently doing as a Department to position ourselves in the Province to prepare for the global changes and to unlock the opportunities.

The budgeted amount of R181,414 Million for 2007/08 represents a 1,76% decrease from the 2006/07 revised budget of R184,669 Million.

The budgeted amount includes the following earmarked allocations:

• Improvement to CapeNature Tourism infrastructure: R5,0 Million
• Integrated Law Reform : R0,8 Million
• CapeNature fire management capacity and alien vegetation eradication: R5,0 Million

1. Land stewardship, livelihoods and the Economy

Land- use management and Planning

Where we build and how we build are critical to ensuring that our built environments have both the adaptive capabilities to climate change as well as laying the basis for mitigation to risks. Identifying high risk areas such as flood-lines, coastal high water marks, sensitive areas like our biodiversity hotspots will ensure that in our forward planning we already plan for the impacts of climate change.

Our Provincial Spatial Development Framework and other supplementary Guidelines like the Urban Edge Guidelines, Golf Estate and Polo Estate Guidelines have laid the basis for this. The Municipal SDF's will deepen these plans at a local level and we will continue to review our own policies and guidelines to ensure responsiveness.

Furthermore all environmental applications are currently authorised through the lens of climate change and included in our conditions of approval are energy efficiency, water and waste management measures. What we need to ensure now is that we monitor compliance to these more effectively and we will also look at ways of including conditions relating to the use of renewable energy in future developments.

The Integrated Law Reform Project was initiated to address weaknesses in the current legislative regime that controls development, thereby addressing many of the shortcomings in the development approval process that have been identified in ASGISA and which are viewed as having negative consequences for economic growth. It also will entrench the sustainable utilisation of land within the ambit of the law.

Environmental Management Frameworks is another tool available to us through national legislation that can further deepen land-use management. An Environmental Management Framework is a strategic environmental management decision support instrument that is based on the environmental attributes of a particular geographical area. The information and maps produced by Environmental Management Frameworks will facilitate the compilation and consideration of EIA applications. If properly compiled EMF's will identify:

• areas in which the undertaking of an activity should be allowed to take place without further investigation;
• areas in which the undertaking of an activity may be allowed subject to an environmental authorisation being granted in terms of these regulations; and
• areas in which the undertaking of an activity should not be considered

During this financial year my Department will compile a pilot Environmental Management Framework in concurrence with the National Department of Environmental Affairs and Tourism.

Green Procurement Policy

The department is currently formulating a Green Procurement Policy for the Provincial Government. This initiative aims to provide an enabling environment, through the purchasing spend in the public sector, to stimulate the demand for goods produced in a sustainable manner. We aim to create opportunities for small businesses through this initiative. A trial green procurement project is underway in the Pollution and Waste Directorate in the Department to test and document green procurement transactions.

Recycling Economy

Promoting the Environmental Economy which aims to unlock opportunities in the environmental goods and services sectors is a new priority area for the Department as announced in last years budget speech. In this financial year we will focus on promoting the Recycling Economy. T he Department commissioned a detailed situational analysis study of the current recycling economy in the Western Cape with a specific focus on access of the poor to this economy.

The Department aims to stimulate and grow the recycling economy by improving the demand and supply of recycled material in a manner which benefits the poor. Three key areas of intervention will be:

• Developing, supporting and growing small, medium and micro enterprises (SMME's) in the recycling sector.
• Supporting municipalities to implement and support economically self sustainable recycling initiatives.
• Stimulating public awareness and education through our existing 2Wise2Waste initiatives.

The budget for this programme is R0,05Million

CapeNature Tourism Infrastructure

An earmarked allocation of R5,0 Million in 2007/08; R17,11 Million in 2008/09 and R30,0 Million in 2009/10 will be transferred to CapeNature for the development and upgrading of tourism infrastructure. The design and construction of these facilities will embrace sustainable development principles which acknowledges the climate change phenomena.

The Green Rating System

Environmental grading of Hospitality establishments will be a critical intervention to ensure the Tourism industry's responsiveness to the potential changing patterns of international travel due to climate change and will mainstream sustainable development within the hospitality sector. By clearly identifying and rating accommodation that meet environmental goals, we will provide visitors with a way of reducing their footprint during their visit to the Western Cape .

The 2010 World Cup offers us a unique opportunity to market our model internationally in this regard. The role out of the green rating system is currently under discussion with an international donor.

Community-Based Natural Resource Livelihoods Programme

We will continue to maintain our spend on the 11 Community-based Natural Resource Livelihoods Programmes which we initiated last year through the Siyabulela Programme. These projects target Coastal and Rural Communities, especially youth and women who are dependent on our Bio-diversity for their livelihoods. The programme will provide a sustainable livelihood to communities who will be most vulnerable to the impacts of climate change.

2. Reducing the Provincial Carbon Footprint

Sustainable Energy Strategy

There is a direct relationship between Energy and Climate Change. The Department has developed a Sustainable Energy Strategy with a specific emphasis on the promotion of renewable energy.

A target of achieving 15% renewable energy in the Province by 2014 has been set. Studies have shown that to achieve this an investment of about R8 billion is required.

The main objectives of the Sustainable Energy Strategy are:

• To ensure energy security;
• To promote a more sustainable supply side mix;
• To promote energy efficiency; and
• To promote renewable energy.

In order to implement this Strategy and to achieve our target of achieving 15% renewable energy by 2014, we will do the following:

• launch a Solar Water Geyser pilot project in the Hessequa Municipality
• establish a Renewable Energy Sector Cluster in the Western Cape , bringing together industry players, government and academic institutions
• initiate, together with the relevant national departments, the drafting of a Renewable Energy Act for the Western Cape
• identify projects that can unlock funding through the Carbon Development Mechanism and the UNFCCC Adaptation Fund
• strengthen our existing partnership with Eskom and our social partners to enhance our Energy Efficiency programmes in the Western Cape
• build smart capacity in the Public Sector to deal with Energy Plans and programmes
• continue to support the Department of Public Works in its implementation of Green Building Design to promote energy efficiency
• produce a simple user-friendly guide for potential investors in the Renewable Energy and Energy efficiency Sector
• support the Department Transport and Public Works in the implementation of an energy efficient public transport system

Air Quality

The newly established Air Quality Management Section within the Department will monitor ambient air quality in the Province during the course of this financial year

The Province has purchased three fully equipped sophisticated moveable ambient air quality monitoring stations. These monitoring stations will be located at strategic sites across the Province for a one-year period. This will ensure that all seasons are covered. The monitors will be rotated on a five-year program to ensure a spread across the Province.

The budget for this programme is R4,423 Million

3. Integrated Water Supply and infrastructure management programme

Working on Fire and Working for Water

The Working on Fire and Working for Water are key programmes that link to our work on climate change. An earmarked allocation of R5 million in 2007/08; R7.5 million in 2008/09 and R23.8 million in 2009/10 will be allocated to the Department for transfer to CapeNature for the following two purposes:

• To enhance our fire management capacity and includes expenditure on expanding the fire fighting ground crew workforce.
• Eradication of alien vegetation which minimise the impact of fires, increase the supply of water and allow our biodiversity to thrive.

4. Research, Monitoring and Validation

The department will continue to deepen our research done with regards to Climate Change. We are particularly excited about the British High Commission offer of about R2 million donor funding to do so. We will be finalising this agreement shortly.

We have also received financial support from DANIDA of R1 million to expand on our existing work with regards to PSDF manuals and the implementation of the Provincial Hazardous Management Plan.

I would like to thank DANIDA for their support.

Mr Speaker

I have highlighted just some of the ways in which my department is intervening in creating the enabling environment required to respond to Climate Change impacts. We have a limited budget and capacity but I am proud of what we have achieved and are able to achieve, even with these constraints.

We will of course continue to seek partnerships to enhance our delivery and elevate Climate Change and the Environmental Economy interventions to Provincial Policy priorities during the forthcoming budget process.

Social Transformation Programme for 15 Areas

Honourable Members

In his State of the Province address the Premier announced that Provincial Government would shift focus to 15 priority areas for action - these areas were identified as critical areas where there are high levels of poverty and crime. These areas are: Mitchells Plain, Khayelitsha, Manenberg, Hanover Park, Nyanga, Elsies River, Bishop Lavis, Delft, Kleinvlei,Gugulethu, Phillipi, Muizenberg and in the rural areas Vredenburg, Paarl, and Oudsthoorn. My departments contribution to this Programme will be:

• Targeting the sustained cleansing of these areas together with the City of Cape Town . We will do this through our involvement in the Cleanest Town Competition. This will have to be integrated into the waste-management plan for the City to make it a sustainable delivery.
• Initiating, in partnership with my other Department of Economic Development, the support for existing Recycling businesses in at least 3 of these areas in this financial year
• Rolling out a Climate Change Education and Awareness Programme in the 109 identified schools in the 15 areas.
• Providing assistance with the development of localised spatial development frameworks and Environmental Management Frameworks for two of these areas in order to unlock development opportunities as well as mitigate against climate-related risks.

Mr Speaker

The challenges and opportunities presented by Climate Change are indeed great. The Premier, in his address at our Climate Change Summit recently said "We must keep the discourse hopeful - we need to turn alarm into opportunity"

We can only achieve our objectives of reducing the potential negative impacts of climate change on the Western Cape if we act in partnership. Our action must be at once global and local, it must be at once collective and individual.

The call is to ACT NOW!