Sustainable Consumption Of Electricity and Water - PDF

Sustainable Consumption Sustainable Consumption of Electricity Electricity is a form of energy obtained from nuclear reactions, fossil fuels, or natural sources like the sun, wind, and water. (pg. 190) Main sources of electricity: ○ Fossil fuels (e.g., natural gas, oil, and...

Sustainable Consumption Sustainable Consumption of Electricity Electricity is a form of energy obtained from nuclear reactions, fossil fuels, or natural sources like the sun, wind, and water. (pg. 190) Main sources of electricity: ○ Fossil fuels (e.g., natural gas, oil, and coal) - burning these releases harmful gases into the atmosphere, causing pollution and respiratory diseases. These are non-renewable resources. (pg. 190) ○ Renewable sources: Solar energy from the sun's rays (pg. 191) Hydroelectricity from flowing water (pg. 191) Wind energy converted using wind turbines (pg. 191) Responsible uses of electricity: ○ Use a mind map to identify ways to be responsible when using electricity in housing and with household equipment/appliances (pg. 192-194) Sustainable Consumption of Water Water is considered safe and drinkable when it is free of disease-causing pathogens and has a zero count of E. coli. (pg. 196) Reasons for water shortages in South Africa: ○ Water-stressed country with insufficient rainfall in certain areas ○ Cannot afford to build more dams and water transfer schemes ○ Growing population and industries increasing water demand (pg. 196) Desalination of water: ○ Removes salt and minerals to make water suitable for consumption and industry ○ Extremely expensive and energy-intensive, with environmental impacts (pg. 196) Sources of water pollution: ○ Domestic - untreated sewage (pg. 197) ○ Marine dumping - litter in the sea (pg. 197) ○ Industrial waste - chemicals and toxins (pg. 197) ○ Oil pollution - spills and dumping (pg. 197) ○ Mining - acid mine drainage (pg. 197) ○ Agriculture - fertilizers, herbicides, and pesticides (pg. 197) Ways to prevent water pollution: ○ Turn off taps when not in use ○ Dispose of household products properly ○ Reduce use of insecticides and pesticides ○ Do not litter (pg. 198) Responsible uses of water:  ○ Use a mind map to identify ways to be responsible when using water in housing and with household equipment/appliances (pg. 199) Municipal Services South Africa has three levels of government: national, provincial, and local/municipal. (pg. 201) Municipalities are responsible for: ○ Social and economic upliftment ○ Providing basic services ○ Engaging the community ○ Managing municipal affairs (pg. 201) Municipal finances: ○ Funded by government grants and consumer service charges ○ Largest source of income is rates (property tax) (pg. 201) Important municipal services: ○ Water supply, electricity/gas, sewage, refuse removal, health services, road maintenance, street lighting, parks, and recreation (pg. 201) ○ Additional services depending on budget: libraries, fire fighting, fresh food markets, tourism promotion (pg. 201) Responsibilities of communities regarding municipal services: ○ Submit complaints, stay informed, attend council meetings, pay fees, respect municipal rights, comply with by-laws, work with NGOs, follow proper procedures (pg. 201) Contracts and Consumer Protection Types of Contracts Tacit, verbal, or written contracts (pg. 169) Requirements for a legal contract: 1. Offer and acceptance 2. Legality 3. Specified legal consideration 4. Legal capacity of parties 5. Free consent (pg. 169) Types of contracts relevant to consumers: 1. Employment contracts 2. Insurance contracts (short-term and long-term) (pg. 169-170) 3. Credit contracts (e.g., mortgages, loans, installment sales) (pg. 171) 4. Rental and lease contracts (pg. 171) 5. Subscription contracts (e.g., gym, cell phone, internet, DSTV) (pg. 171) 6. Business ownership and partnership agreements (pg. 172) Cooling-Off Period and Exemption Clauses  Cooling-off period: 5 working days to cancel a contract without reason or financial implications (pg. 173) Exemption clauses: Clauses that exonerate one party from liability if they fail to honor the agreement (pg. 173) ○ Legal exemption clauses are acceptable ○ Illegal and unenforceable exemption clauses impose unfair conditions on the consumer (pg. 174) Unfair Business Practices Unfair business practices include: ○ Offering goods/services at unreasonable prices or terms ○ Making false or misleading statements ○ Asking consumers to waive their rights ○ Practices detrimental to consumers (pg. 174) Warranties and Guarantees Warranties: Written guarantee to repair or replace a product if it breaks or malfunctions within a specified period (pg. 175) ○ Extended warranties cover repairs for a longer period (pg. 175) Guarantees: Manufacturer's assurance that a product will remain in working order for a particular time (pg. 175) Money-back guarantee: Seller will refund the customer if they are unsatisfied after a certain number of days (pg. 175) Grey Goods and Parallel Imports Grey goods/parallel imports: Items a manufacturer doesn't want sold in a particular country but end up there through unofficial channels (pg. 176) ○ Grey goods are not illegal, but the official supplier will not honor the warranty (pg. 176) ○ Consumers have an implied warranty of quality for grey goods (pg. 176) Scams Dishonest schemes involving an unsuspecting consumer being cheated (pg. 176) Types of scams to be aware of: ○ Work-from-home opportunities, internet auctions/sales, prize notification schemes, foreign assistance requests, computer viruses, bank scams, rental/roommate ads, phishing (pg. 176-177) Stokvels and Pyramid Schemes Stokvels: Community-based savings clubs with formal or informal rotating financial schemes (pg. 177) ○ Legal stokvels have specific requirements (pg. 177) ○ Illegal stokvels are based on pyramid schemes (pg. 179)  Pyramid schemes: Compensation is based on recruiting new members rather than selling goods/services (pg. 179) Taxes, Interest Rates, and Inflation Taxes Types of taxes: ○ Income tax (PAYE and provisional tax) (pg. 180-181) ○ VAT (value-added tax) (pg. 181-182) ○ Property tax (transfer duty and rates) (pg. 182) ○ Capital gains tax, donations tax, excise duties/levies (pg. 182) ○ Petrol tax, motor licenses, air passenger tax, environmental levy (pg. 182-183) New tax developments: ○ Dividends tax ○ Potential motor vehicle carbon emission tax (pg. 183) Interest Rates Simple interest vs. compound interest (pg. 183) Repo rate: Interest rate charged by the South African Reserve Bank (pg. 183) Prime interest rate: Rate used by banks to determine loan interest rates (pg. 183-184) Inflation Inflation: Average increase in prices of goods and services in a year (pg. 184) Causes of inflation: ○ Higher salaries, government overspending, increased money supply (pg. 184) Effects of inflation: ○ Less disposable income, fixed-income earners suffer most, fewer goods purchased (pg. 184) Consumer Price Index (CPI): ○ Measures changes in the price of a group of consumer goods and services (pg. 184-185) ○ Used by the Reserve Bank to set interest rates and by businesses for salary/wage adjustments (pg. 185) The Consumer Sustainable Consumption Pg: 189 Sustainability Consumption: the ability of a system to survive and even prosper over the long term without depleting its assets. Therefore the sustainable consumption of water and electricity is the ability to use these resources in such a way that the natural resources producing it do not get depleted. Sustainable Consumption of electricity: Pg: 190 What is electricity? It is a form of energy obtained from nuclear reactions, fossil fuels or from natural sources such as sun, wind and water. Main sources of electricity: Fossil fuels e.g. natural gas, oil and coal made from fossilised forms of carbon formed in the earth. Burning fossil fuels releases potentially harmful gases into the atmosphere. These gases cause pollution which cause respiratory diseases. And Non-renewable resources – these are used up faster than it is produced. Renewable sources of energy: Renewable means it can be reused again and again and it will not ever finish. Renewable sources are more environmentally friendly save the environment.  1) The sun(solar energy) comes from the rays of the sun. 2) water energy (hydro-electricity) water flowing from a dam is used to drive turbines that generate electricity. 3) wind energy - Wind energy is converted into electricity using wind turbines. Wind towers about 20 m high. Responsible Uses of Electricity: Using a mind map: go through pages 192- 194 and write down ways you can be responsible when using electricity relating to housing and household equipment and appliances. Making use of gas in the home Pg: 194 Liquefied petroleum gas (LP gas) used in South Africa It is a non-renewable fuel. It burns more cleanly than other fossil fuels such as coal and oil. However not as clean as renewable sources like solar and wind. Advantages: Fast, efficient and delivers a controlled heat when cooking Has many uses – heating, cooking, heating water. More environmentally friendly – lower carbon emissions Lighter than air – so it is leaks it dissipates into the air. Affordable – cheaper than electricity  Maintenance free Not affected by load shedding Only pay for what you use Disadvantages: Gas explodes quickly – do not place near heat/fire Gas can leak and can cause a dangerous explosion. Consumers exposed to a build up of gas will become ill as it deprives them of oxygen. Gas is non-renewable. Cost: LP gas distributors are all privately owned and gas prices vary from supplier to supplier. The government has realised the importance of making gas available to everyone. And recently put a max price on it for household consumption. Gas is more efficient and cheaper than electricity over time. Sustainable Consumption of Water Pg 196 When is water safe? Water is considered safe and drinkable when it is free of disease-causing pathogens Domestic water must have a zero count of E. coli Water is tested regularly to check for contamination. Reasons for a water shortage in South Africa: -SA is a water-stressed country, does not have sufficient rainfall in certain parts SA cannot afford to build more dams and water transfer schemes A growth in population and industries has increased the demands for water. Desalination of water: - the removal of salt and other minerals from water to make it suitable for human consumption and industrial use. There are companies that can do this however it is extremely expensive! Also another disadvantage is a large amount of energy is needed to do this cause carbon emissions, as well as environmental damages to marine ecosystems. Pollution of water Pg: 197 Water pollution is any chemical, physical or biological change in the quality of water that has harmful effect on any living organism that drinks, uses or lives in it. Sources: 1) Domestic-untreated sewage Sewage should be carried away from households through sewage pipes Contaminates the environment and causes diseases such as diarrhoea 2) Marine dumping - Dumping litter into the sea results in death of sea life. 3) Industrial waste - Fresh water is used to carry waste away from factories into rivers, lakes and oceans Chemicals such as asbestos, lead, mercury, nitrates, sulphur and oil are toxic to human and marine life 4) Oil pollution -Oceans polluted by dumping, oil spills, shipping. Forms a thick sludge that suffocates marine plants and animals. 5) Pollution caused by mining - When abandoned mine shafts fill with water, metals, sulphides and salts seep into water. Called acid mine drainage (AMD) and is highly toxic. Contact with this affects human, plant and animal life. 6) Agricultural pollution - Fertilizers, herbicides and pesticides run off farm fields into water. Toxic to organisms, river life and people using water down stream.  How to prevent water pollution: Turn off tap when running water is not needed Be careful what you throw down your toilet. Paint, oil, medication needs to be disposed of correctly Use environmentally safe household products Reduce the use of insecticides and pesticides Do not litter Responsible Uses of Water: Using a mind map: go through page 199 and write down ways you can be responsible when using water relating to housing and household equipment and appliances. Municipal Services Pg 201 SA has 3 levels of government: national, provincial and local or municipal government. They are responsible for: 1) Social and economical upliftment 2) Providing basic services 3) Actively engaging the community 4) Managing municipality affairs Municipal finances: Municipalities get money from the government They also charge consumers for services. The largest source of income for municipalities is rates. Rates is tax paid by owners of land and buildings situated in the municipal area. % varies according to area and property value. Important services they do: Supply clean water supply electricity/gas Sewage collection and disposal Refuse removal Health services Clean roads and storm drains Street lighting Municipality parks and recreation Other services depending on size of budget: Libraries fire fighting services Fresh food markets Promote local tourism Responsibilities of communities regarding the use of municipal services: Submit all complaints Ensure they are kept informed Attend council meetings Pay fees Respect municipal rights Comply with by laws Work with non government organisations Follow correct procedures when exercising rights eg: don’t burn down stuff when striking Financial and contractual issues Pg 169 Contract – legal agreement between two or more parties where one party promises to do something in return for a valuable benefit of some sort If broken – can be take to court Read new words Contract can be tacit, written or verbal Verbal contract difficult to challenge – make sure things are in writing, with both parties signatures and witnesses Three types of contact agreements:  1) tacit – you give a taxi driver money to take you some where 2) verbal - you offer to purchase a CD for a friend who promises to give you money 3) written – purchase agreements, marriage contracts, gym contracts ect Requirements for a legal contract: there must be a offer as well as an acceptance Must be legal –not break a law Must specify legal consideration Both parties must be legally allowed to enter contracts – eg must be above 18 Free consent – no one must be forced into anything Sale of property must always be in writing Types of contracts relevant to consumers: 1) Employment contracts One of the most important contracts you will ever sign 2) Insurance contracts Type of Contract:Description: Short term contracts Medical aid/ hospital planCovers you against medical costs for illness/hospitalisation Household insuranceCovers you against loss/damage of property through theft, fire ect Vehicle insuranceCovers you against loss/damage to vehicles from theft/accident. 3) Credit contracts A contract between a financial provider (eg: bank) and the consumer. Governed by the National Credit Act and the Consumer Protection Act These Acts protect consumers from unfair business practices and gives consumers rights. Types of credit contracts: Mortgage bonds Loans from a bank or a financial institution Instalement sale/ hire purchase contracts  Store credit accounts Type of contract:Description: Long term contracts Life insuranceSpecified sum of money is paid out when the person reaches a specific age or dies. Education policySpecific amount of money is paid out on a specific date to cover educational costs of the insured person’s child 4) Rentals and lease contracts The Real Housing Act 50 of 1999 lays down the rules and regulations or these contracts. You will learn more about this type of contract in the housing section. 5) Subscription contracts Eg: gym, cellphone, internet, dstv An agreement between the credit provider and the customer for a specific number of months. The Consumer Protection Act protects consumers from unfair business practices in these contracts. All suppliers are liable for defects in their products The consumer can terminate a long term contract on20 working days notice but the supplier may charge a penalty for this early cancellation. 6) business ownership and partnership agreements When starting a business you may chose to go into a partnership with one or more people. it may be verbal but written is better It should be signed and witnessed A partnership contract must include the following: Description of the business and the business name The names of the partner, ID numbers and addresses. Amount of capital, assets and expertise to be given to the partnership Share of profit and losses Responsibilities of each partner How a partnership will be terminated Restrictions of authority of the partners How disputes will be settled The cooling off period Pg 173 It is the amount of time the law gives a consumer who signed a contract to cancel the contract without reason and financial implications. NB! Consumer Protection Act – allows consumers 5 working days to cancel when they have: purchased goods / signed a contract / lease Business has 7 working days to pay them back. Exemption clauses: An exemption clause in a contract exonerates one party from any liability if he or she fails to honour the agreement or when the product doesn’t serve its purpose Exemption clauses are in most contracts Legal exemption clauses: Lots of people use standard contracts to complete agreements – sometimes some clauses are not relevant therefore need to be excluded Illegal and unenforceable exemption clauses: Illegal exemption clauses impose unfair conditions on the consumer. Read through a few examples pg 174 Unfair business practices Pg 174 An unfair business contract is when a supplier unfairly tries to influence or harass a consumer to do business with them. Unfair business practices include: Offering goods and services at an unreasonable price Offering goods and services on unreasonable terms Making false or misleading statements to consumers Asking a consumer to waive their rights Business practices that are detrimental to consumers Terms that disadvantage consumers Warranties and guarantees Pg 175 Warranties:  A written guarantee promising to repair or replace an article if it breaks or does not work properly within a specified period. A customer can pay monthly for a warranty Extended warranties: Warranties for a specific period of time where the supplier promises to repair the product without charge during this period. Does cost a monthly fee Guarantees: an assurance that a product will remain in working order for a particular length of time. It’s a promise that the manufacturer will sort out any problems for a specific period of time. Money back guarantee: States that the seller will give the customer back their money if they are not satisfied after a certain number of days. Grey goods or parallel imports Pg 176 Grey goods – items a manufacturer doesn’t want sold in a particular country but end up there through unofficial channels. Grey goods are also called parallel imports Grey goods are not illegal However the official supplier will not honour the warranty if they break The seller of grey goods may fix them in-house The consumer protection act states = a notice identifying grey goods must be visible to consumers The consumer protection act states they have an implied warranty of quality = means faulty goods can be returned and refunds can be given It is a legal warranty Scams Pg 176 A dishonest scheme involving a unsuspecting consumer who is cheated into paying an excessive price for the goods/services offered. In many cases there are no real goods or services. The customer loses his money and gets nothing in return. Most scams involve technology like the internet or email/ Types of scams consumers should be aware of: Work-from home opportunities – something must be purchased before work can begin Internet auctions and sales – you paid for something that never existed. Prize notification schemes – eg: Mr Kan you won R20000 in the UK lottery! Scam letters asking for help – forgein people needing money Computer virus scams – can steal personal info, banking details Bank scams – fake emails asking for updated info Advertisement for room or flat mate – pays a deposit for a flat the never exisited Phishing- an email message, website or phone call is designed to steal money from an unsuspecting consumer. Can also be used for identity theft. Stokvels Pg 177 A community based saving club A formal/informal rotating financial scheme with entertainment and social or economic functions Consists of two or more people who agree to support each other in order to achieve a certain objective All members of the stokvel pay subscription to establish a continuous pool of money Can grant credit to a member Members share in the profit Members nominate someone to manage the stockvel Legal stokvels: In order for it to be legal it must have the following requirements: All member must know how the money will be invested All members agree on risks Contributions must be made to a common fund All members must benefit Illegal stokvels: When the saving scheme is based on the pyramid scheme People start to lose interest Pyramid Schemes: The consumer protection act states: a pyramid scheme (multiplication scheme) exists when members receive compensation from recruiting other members rather than the sale of any goods or services. needs new members the whole time to make money There are no legal pyramid schemes in SA However some companies like Tuppware work on a 3 tiered level schema that is similar to a pyramid schema Read through illegal pyramid schemes pg 179 Taxes, Interest rates and inflation Pg 180 Tax is a fee charged by the government on products, incomes, and activities. This income is used to finance government expenses There are direct and indirect taxes (know the difference!) The government also gives financial support to country All taxes are paid to SARS Types of taxes: Table 1 lists and explains the terms you will need to be familiar with before you can understand how income tax is calculated: Gross IncomeTotal amount of money(before deductions) that a person’s employer pays him/her to do a job. DeductionsAmounts such as medical aid, pension fund, UIF (unemployment insurance fund) that are deducted from the employee’s gross salary before the money gets paid to him/her. Taxable incomeTotal amount (after deductions) that will be taxed at the end of the financial year. Year of assessmentThe income tax year of assessment is from 1 March to 28 February. Types of taxes continued: Income tax: - tax you pay on the money you earn (eg: salary). Registered taxpayers must complete and submit an income tax return every year to SARS South African Revenue service (SARS) assess the info and either a tax or refund is due. Income tax can only be assessed at the end of the year and its impractical to expect taxpayers to pay one large amount: There are two ways SARS deals with this: PAYE and provisional tax Tax is worked out on a tax threshold scale. Earn more = pay more  PAYE (pay as you earn) Ensure the employee pays tax at the same time the his/her income is earned. The persons tax is settled over the course of the year. The employer deducts 1/12 of the estimated tax from his/her salary. Provisional Tax: Taxpayers whose income is not fixed (eg: sole traders) pay tax twice a year based on their estimated taxable income. The income from the previous year plus the income for the year to date is used to calculate estimated taxable income for the current year. VAT: value added tax (15%) is added to the price charged for goods and services at each stage in production The following is excluded from VAT: 19 basic food items- brown bread, maize meal, lentils, milk powder, dried mealies, mealie rice, samp, rice, milk, fruit, vegetable, eggs and others Paraffin Petrol and diesel (already have fuel levy) Some grants by the government International transport services Exported goods and services Property Tax: When property is purchased a once off transfer duty is charged. The first R600 000 is not taxable, thereafter the balance is taxed according to a sliding scale. Rates: Tax charged by municipalities on property. Money is used to provide services, eg: taking away trash. The rate depends on the area and type and value of property. Expensive area = pricier rates. Capital gains Tax: Tax that is charged on any proceeds obtains from selling or disposing of an asset. The gain/proceeds is the difference between the selling price and cost price. This profit is taxed.  Examples of an asset: vehicle, furniture, equipment. Donations Tax: Tax is paid on the value of any asset donated to another person free or a very low sum. Donations not exceeding R30 000 per year excluded. Tax on goods and services: Excise duties and levies- taxes charged on fast moving daily consumables They are also called: Sin Taxes – petrol, alcohol, tobacco products Easily collectable and constant stream of revenue. Also used to influence consumer behaviour – eg: more taxes on alcohol and cigarettes as these are harmful products. Petrol: Retail price is regulated by the government and changes according to the price of crude oil. Also known as fuel tax The price includes: fuel tax (price of petrol) and the road accident fund (used for compensation for 3 rd party victims) Motor licences: All motor vehicles must be licensed and the annual disc must be displayed on the windscreen. Money is used by the traffic department for maintaining roads. Air passenger tax: A tax of R100 per passenger leaving SA is levied to fund tourism. Environmental levy: Charged on certain types of plastic carriers, flat bags, electricity generators using non-renewable fuels and non-energy saving lamps. Other types of tax: Estate duty- charged on the value of the property owned by a SA citizen at the date of his or her death Unemployment insurance Fund (UIF): 1% of an employees salary goes to UIF. The employer contributes 1% also  Person claim this fund when out of work for a maximum of 6 months New developments and legal changes relating to tax! The government continually looks for ways to improve the tax system and close any loopholes that may be found. Dividends tax: Any company paying a dividend must withhold dividends tax and pay this to SARS on behalf of the shareholder. The shareholder will receive a tax certificate. Environmental Levy: The government is considering introducing a motor-vehicle carbon emission tax in the near future. Would be a flat rate added to the selling price of the vehicle. Aim is to influence manufacturers of vehicles to create more energy efficient and environmentally friendly cars. Interest Rates Pg: 183 Interest rates: An interest rate is the rate at which interest is paid by a borrower for use of the money borrowed from the lender. For example: a bank charges interest on a loan given to a consumer. There are two methods for calculating interest: 1) Simple Interest: - calculated on the original loan No interest is paid on interest Usually used for short term loans 2) Compound interest: - interest is paid on interest. Interest is added to the principal amount and each month the interest is calculated on the amount now accumulated. Repro Rate: - this is the interest charged by the South African Reserve Bank to major banks and other lending institutions. It is the interest rate at which commercial banks can borrow money from the Reserve Bank. Also known as the repurchase rate.  Prime interest rate: This is the interest rate that banks use to determine the interest rate charged on loans to their customers. It is based on the existing repo rate which is a benchmark rate at which they lend out money to the public. Inflation Pg 184 Inflation occurs when prices keep climbing but the amount of money available to purchase goods stay the same. Definition: inflation is the average increase in prices of goods and services in a year. The rate of inflation is the % increase in prices over a year. The higher the inflation rate the less a consumer can buy Causes of inflation: People asking for higher salaries means business must charge more to cover salaries. Government spends more than it receives More money is printed without security. How inflation affects people: NB People have less disposable income People on fixed incomes (pension) suffer most People can buy less = economy suffers Fewer goods purchased = cut back on manufacturing = loss of jobs Consumer Price Index (CPI) Inflation rate based on CPI CPI shows a change in the price of a group of products and services. Used to measure changes in the economy as well as standards of living It is a measure of the average price levels of consumer goods. And is calculated by looking at the change in the price of samples (goods). All these samples are called the CPI basket The % change is the CPI CPI is used to check the real value of wages, salaries ect.  Who uses the CPI: The SA Reserve bank uses the CPI to set the level of interest rates in the country Businesses use the CPI when looking at salary and wages adjustment.