SA must increase its share of the multi-billion-dollar carbon trade

Posted by Alastair Otter on June 13, 2007
Posted in Business

South Africa must position itself to take advantage of the huge carbon market developing internationally, Marthinus van Schalkwyk, the minister of environmental affairs and tourism, said on Friday in a speech at the Western Cape Renewable Energy and Climate Change Summit held in Cape Town.

Africa has a mere 3% stake in the carbon market, which was valued at about $30-billion (R218-billion) in 2006, the minister said. South Africa accounts for about half of that 3%. By comparison, China supplied about 60% of the emission reductions purchased by industrialised countries since 2002.

South Africa has only nine registered Clean Development Mechanism (CDM) projects, with another 39 in the pipeline, he said. India has 600 projects, China has 400 and Brazil has 200 in the CDM executive board’s pipeline.

The CDM is a market mechanism, linked to the Kyoto Potocol, designed to help developing countries attract the investment they need to tackle climate change and cut their carbon emissions. It allows countries to trade on international carbon markets the emission reductions they manage to achieve through, for instance, changing to renewable energy sources, or making energy efficiency improvements.

According to the minister: “If all developed countries took on much deeper emissions reduction targets, peaking by 2050 with cuts of 60 to 80%, which is what we believe is required, and if they purchased half of their reductions in the developing world at a carbon price of at least $10 per ton, then the financial flows could gradually grow to approximately $100-billion per year by mid-century.”

For South Africa, investment gained by carbon trading could help towards reducing the country’s dependence on coal-fired power stations. Seventy-nine percent of the country’s primary energy supply comes from coal, according to the National Business Initiative. The energy sector is South Africa’s largest source of emissions.

For the minister’s full speech click here
See also Reuters

Comments

One Response to “SA must increase its share of the multi-billion-dollar carbon trade”

  1. Hard Rain
    July 8th, 2007 @ 12:24 am

    Bless. Spend more money on solving imaginary problems because we definitely haven’t got better things to do…

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