Economic & Industrial Development

City of Cape Town Discussion Papers Workshop 20 January 2009

Key questions
• How should Cape Town respond to the ecological limits to economic growth & development? • Is there „elbow room‟ for a local economy that meets basic needs through sustainable resource use? • What economic development path must Cape Town follow? • How to integrate ecological limits to economic & industrial development? • Can we use sustainable economic development to overcome apartheid spatial patterns?

Cape Town recognises the challenges
• CoCT recognises need for paradigm shift
– “current rate of natural resource exploitation will retard future economic growth” – sustainability seen as “the primary vehicle through which to address poverty and unemployment” – “future economic growth in Cape Town is dependent on environmental sustainability” – “the economic opportunities inherent in the threats of climate change should be immediately exploited, benefiting both the economy, the local community and the environment”

– Key CoCT documents:
• • • • • Updated Growth Scenarios (2007) Economic and Human Development Strategy (EHDS) 2007-2012 Integrated Development Plan (IDP) Energy and Climate Change Strategy (for Cape Town) (2006) A draft report on Renewable Energy and the City of Cape Town: an Economic Model of Environmental Costs (2007)

Other players reaching similar conclusions
• NGOs & universities working with communities on sustainable urban agriculture & house construction methods • Accelerate Cape Town formed by influential business leaders • Cambridge Programme for Industry & Cape Town Partnership actively facilitating business to adopt sustainability approaches • Investments by Investec & Old Mutual in „sustainability projects‟ • Challenge has been how to ensure that paradigm shift shapes economic growth & development plans

A Resource Consuming City
• Despite above, existing plans confirm a “consuming city” – A mass market of consumers of urban goods - houses, vehicles, energy, food, leisure, household appliances & fittings – Constituted by hundreds of “consuming neighbourhoods” – That buy from outside (energy, water, waste removal services, building materials, food, vehicles, etc.) • Also shaped by apartheid logic (spatial form, function, economy, tax base, etc.) – urban land use mitigates against sustainable resource use, equity & integration • Economic growth takes place in “consuming enclaves” – blind to ecological inefficiency of a “consuming city”

Towards A Sustainable City
• Economic growth on the basis of equity, integration & sustainability • Integrating sustainable resource use into economic growth
– Reducing rates of consumption of natural resources - by reducing, reusing and recycling – Reducing material inputs into production & consumption processes – New industries – Current industries - regulations, conversions

• Can 2009, 2010 and 2011 reviews of the 2007-2012 IDP & the 2012-2017 IDP incorporate this model?

Elements of the ‘sustainable city’ model
• • • • A city industrial policy & strategy A localisation strategy to stimulate local economies Overcoming apartheid spatial relations Diversified, shared &equitably redistributed benefits of economic growth & development New industries driving economic growth Reconceptualising the economy to integrate the poor as productive players Consolidating food sovereignty Universal access to free basic services Basic building block is the “sustainable neighbourhood” Make sustainable city model more explicit & central in CoCT policy debates & actions

• •
• • • •

A sustainable neighbourhood
• Generates more energy than it consumes • Generates zero waste • Meets most of its basic food requirements from local sources • Requires little or no fossil fuels to transport people • Releases minimal amounts of CO2 • In theory the „sustainable neighbourhood‟ makes less demands on externally provided services

Industrial policy
• A policy-led process of interventions to drive & promote sectoral growth & development
– GDSs held in significant number of municipalities

• Key elements
– – – – – – – – Harnessing investment & production decisions Identification & support to priority sectors Various incentives & penalties to mobilise capital Skills development & labour productivity Labour intensity or substantial employment multipliers Stimulation of local economies Major infrastructure development An equity & trade perspective – how to shape value chains to advantage local economies – A city that specialises in knowledge-based systems, technologies, products, value chains & investments that promote sustainability based industries

Which industrial sectors?
• Relevant sectors/activities
– – – – – – – – – – renewable energy conversion of existing systems carbon trading new inner city eco-designed office blocks sustainable construction sustainable marine culture businesses organic farming recycling public transport eco-tourism,

• Which sectors to prioritise?

Energy security
• The formation of an “energy consortium”
– to mobilise research & investment – in massive renewable energy & energy efficiency schemes

• Resources to roll out solar water heaters • Biogas digesters
– Need for a city-wide biogas feasibility study – A target to promote biogas in all new buildings and settlements (50%?)

Localisation
• How to foster economic activity in townships? • How to harness local savings, labour & physical resources for local production & wider consumption? • Cooperatives relevant here
– – – – Needs & challenges of existing coops Municipal policy & strategy to support & promote coops Procurement spend on coops Providing incentives for coops

• Other possible interventions
– Urban agriculture on a massive scale • A critical mass providing for local markets • Provide infrastructure, extension, financial & market support at required level, scale & regularity • Adapt policies & by-laws to ensure success of urban agriculture • Massively improve the recycling of organic waste – Recycling

Overcoming apartheid spatial relations
• New sustainable economy not in “consuming enclaves” • Compacting development
– to stem the sprawl – to foster intensive & inward oriented spatial development

• Mixed activity corridors
– high-density, mixed-land uses

• Densification
– maximise space use – maximise necessary economic thresholds support local economic development

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