by clicking the arrows at the side of the page, or by using the toolbar.
by clicking anywhere on the page.
by dragging the page around when zoomed in.
by clicking anywhere on the page when zoomed in.
web sites or send emails by clicking on hyperlinks.
Email this page to a friend
Search this issue
Index - jump to page or section
Archive - view past issues
Trading Carbon : December - January 2011
16 COVER STORY Among African countries participating in global carbon markets, South Africa is unique. It has been Africa's vanguard in the Kyoto Protocol's Clean Development Mechanism (CDM), registering many of the continent's first-mover projects and attracting more investment than any other nation in the continent. South Africa is also the only African country that has made a firm emissions reduction pledge under the Copenhagen Accord. It has promised a 34 percent c ut in greenhouse gas (GHG) emissions below a business-as- usual (BAU) growth trajectory by 2020, and a 42 percent reduction by 2025. The pledge is dependent on finance, technology and capacity building support from developed countries The complex international mixture of national policy and carbon market mechanisms will reach a critical juncture in the next 12 months. South Africa faces an evaporation of CDM project demand from Europe as the EU tries to nudge the country -- along with other advanced developing countries -- toward national measures to reduce GHG emissions. These considerations are, quite rightly, causing market fears of a gap developing between the CDM and the establishment of new means for developed nation investment in the country's carbon market. South Africa is the continental leader in terms of the number of registered CDM projects. There are c urrently 20 registered South African CDM project activities, taking advantage of a wide variety of carbon reduction methodologies, ranging from capturing and destroying methane to power plant fuel switch to residential energy efficiency. The nearly two dozen registered projects aim to produce more than 16 million Certified Emissions Reductions (CERs -- CDM carbon credits) by the end of 2012. Even at today's historically low CER prices, this could represent more than ¤100 million ($135 million) in investment from developed countries toward a clean South African economy (see page 40). Despite attracting most of the early capital for African CDM projects, investment in South Africa has been slower to the game than some other advanced developing countries, such as China, Brazil and India. After years of slow development there are signs that the South African CDM industry may be shr ugging-off its early lethargy and ramping-up project investment and development. There are more than 100 projects in the pipeline and striving for registration before the end of 2012. If the quickened pace of CDM project development in South Africa seems like a r ush to get projects registered under the wire, it is because the door of opportunity is likely closing. Demand for CDM projects comes primarily from Europe. Current EU policy holds that, for the purposes of compliance in the third phase (2013--2020) of the EU Emissions Trading Scheme (ETS), installations covered by the system will not be permitted to use CERs generated by CDM projects located in non-Least Developed Countries (LDCs) and that achieve formal registration under the Kyoto system after December 31, 2012. Rather, the EU has announced that it will favour LDCs as CDM investment South Africa's Carbon Crossroads ANDREW GILDER, LODEWIJK NELL AND BRETT JORDAAN LOOK AT UN CLIMATE CHANGE CONFERENCE HOST SOUTH AFRICA'S ROLE IN THE CARBON MARKET NOW AND GOING FORWARD South Africa has been slower to the game than some other advanced developing countries Brett Jordaan, Evolution Markets Dec 2011/Jan 2012