The Economic Growth Potential of Beneficiating all Waste Streams Dr. Reza Che Daniels School of Economics, University of Cape Town And Recycling and Economic Development Initiative of South Africa (REDISA)

Overview Two research papers written with Faaiqa Hartley & Tara Caetano of the Energy Research Centre at University of Cape Town: The economy-wide economic impacts of monetising 13 waste streams, based on the Department of Science & Technology’s Waste RDI Roadmap (2014); The economy-wide economic impacts of the Integrated Industry Waste Tyre Management Plan (IIWTMP) implemented by REDISA. Both papers based on a similar economic simulation model used by the Treasury to understand economy- wide policy implications. Key limitation: results are hypothetical but help us understand the possibilities of waste beneficiation.

Key Results of Paper 1 If all 13 waste streams were able to achieve 100% recycling rates, it would inject about R25 billion into the economy (DST, 2014, page 14). The economy-wide economic impacts of this would be: An increase in the economic growth rate of about 0.5%; An increase in net full-time employment of over 13,000 jobs with most of these being in lower- and medium-skilled occupations.

Implications & Limitations… Key implication is that we can change South Africa’s economic growth trajectory to be more pro-poor and labour-intensive by recycling waste. Limitation 1: Results based on 100% recycling, which is difficult to achieve in the short-term; Limitation 2: Results can be under-estimated because no account is taken of the waste recovery process, which includes waste collection, transportation and storage.

Key Results of Paper 2 Difference to Paper 1: we take into account the waste recovery process by using actual data from REDISA. The results of implementing the IIWTMP using the REDISA business model suggest that: About 2407 full-time equivalent jobs gained; About 959 full-time equivalent jobs lost; Net increase of 1448 new jobs. Remember: this is a simulation exercise so the results are hypothetical, not real.

Implications & Limitations… Why are jobs also lost? Because any time you implement a waste fee like the IIWTMP does, you raise prices for original products (tyres), which has a negative economic effect. This can be offset by a positive economic effect using an Extended Producer Responsibility Organisation (EPRO) like REDISA to activate the waste value-chain. Limitation: Still under-estimating economic impact because we do not take into account the dynamic impacts of expanding recovery & recycling industries, which is the more long-term implication.

Lessons from Both Papers? Pro-poor economic growth can be achieved using waste beneficiation as a strategy to do so. Implementing industry waste management plans is required in order to activate the positive job creation potential of waste recovery, which includes transportation, storage and processing. The REDISA model (second paper) delivers roughly three times more output to GDP than the first paper suggests is possible from simply recycling waste tyres, so waste recovery & processing is essential to generate bigger economic impacts.

Lessons from Both Papers? Therefore if you replicate the REDISA model to other waste streams you could increase the economic growth impact considerably higher than 0.5%. This is the focus of ongoing research. Note these numbers assume you can recycle 100% of waste, which is difficult to achieve and is a long- term goal (lower recycling percentages are also evaluated in the research papers). But, it takes time to build up this capability so policy certainty & stability is essential.

The End! Thank You 