The potential impact of greenhouse gas emissions constraints on the Southern African primary aluminium business

Pittendrigh, Alistair (2006-12)

Thesis (MBA)--Stellenbosch University, 2006.

Thesis

ENGLISH ABSTRACT: The Kyoto protocol was signed early in 2005 whereby Annexure 1 industrialised countries committed to reducing their greenhouse gas (GHG) emissions. South Africa signed the Protocol. however being a developing country it has no GHG emissions reduction target for the first commitment period until 2012. Primary aluminium is a GHG intensive global commodity to which Southem Africa contributes significantly. This dissertation aims to investigate how the profitability of the Southern African primary aluminium sector may be affected by Kyoto Protocol GHG restrictions even though the smelters are situated in non-Annexure 1 countries. A Delphi-type survey is conducted to gather opinions on identified pressures and drivers that could affect the industry. The survey respondents indicate that the greatest impact will occur from internal pressures from holding companies. Further pressure will originate from external sources namely government, Non Governmental Organisations, shareholders and investors. Direct manufacturing costs are not expected to increase as a result of the Protocol. Rather. industry changes are expected to be the result of internal and external pressures. Opportunities for Clean Development Mechanism (COM) projects are rated as highly importance and are strongly recommended. Various strategies are identified and presented in a matrix to compare the effect of each on the various identified pressures and drivers. From the matrix it is observed that the majority of the selected strategies have a profound impact on the internal and external pressures. From this research report it is recommended that a cooperative proactive strategy be followed . focusing initially on low cost GHG emissions reduction projects and rigorously pursuing COM projects.

AFRIKAANSE OPSOMMING: Die Kyoto Protokol, waardeur Anneks 1 geindustraliseerde lande hul daartoe verbind het om hul kweekhuis gas (GHG) emissies te verminder, is vroeg in 2005 onderteken. Suidelike Afrika het die Protokol onderteken, maar weens sy status as ontwikkelende land, het dit geen GHG emissieverminderingsdoelwit vir die eerste verpligtingsfase tot en met 2012 nie. Primere aluminium is 'n GHG intensiewe globale kommoditeit waartoe Suidelike Afrika 'n groot bydrae lewer. Hierdie tesis poog om ondersoek in te stel na die impak van Protokol GHG beperkings op die winsgewendheid van die Suidelike Afrika primere aluminium sektor, ten spyle daarvan dat die smelters in nie-Annex 1 lande gelee is. 'n Delphi-tipe opname was geloods om opinies in te win oor geidentifiseerde drukpunte en drywers wat 'n impak kon he op die industrie. Die respondente het aangedui dat die grootste impak sal kom van interne druk van beheermaatskappye. Addisionele druk sal afkomstig wees van eksteme bronne soos die regering, Nie-regerings organisasies (NGO's), aandeelhouers en beleggers. Daar word nie verwag dat die direkte vervaardigingskoste sal eskaleer as gevolg van die Protokol nie. Daar word eerder verwag dat veranderinge in die industrie die gevolg sal wees van interne en eksterne druk. Geleenthede vir skoon-ontwikkelings meganisme (COM) projekte is geweldig belangrik en word sterk aanbeveel. Verskeie strategiee word geidentifiseer en voorgele in 'n matriks om sodoende 'n vergelyking te tref tussen die effek wat elk het op die onderskeie drukpunte en drywers. Uit die matriks kan afgelei word dat die meerderheid strategiee 'n diepgaande invloed het op die inteme en eksterne drukpunte. Hierdie navorsingsverslag beveel aan dat 'n samewerkende proaktiewe strategie gevolg word, wat aanvanklik sal fokus op lae-koste GHG emissieverminderingsprojekte, asook die nougesette najaag van CDM projekte.

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