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South Africa: Experts Disagree on Carbon Trade Plan

| Sourced From Allafrica |

Johannesburg CARBON trading professionals are divided over whether SA should design its own carbon emissions trading scheme to suit the African market, as suggested by advisory firm Deloitte.

Africa’s uptake of carbon reduction projects has been slow compared to other developing regions. More than 2000 carbon offset projects worldwide are registered under the Clean Development Mechanism (CDM), administered by the United Nations, but only 44 projects are in Africa, with 17 of these in SA.

Registering a CDM project comes with high costs, and there is no guarantee it will be accepted.

Peter Oldacre, Deloitte’s sustainability and climate change manager, said this put off smaller players. “It is a financial derivative created by more developed nations in the West and as Africans we’ve been limited in responding … to their design.”

A local emissions trading system could create a system that is more flexible, more affordable and better suited to the African environment. If the platform was set up through the JSE, it would encourage local investment in African projects, create transparency and generate trading volumes, Mr Oldcrce said.

The JSE’s GM of commodity derivatives, Chris Sturgess, agreed the opportunity exists to create a transparent pricing system. But companies in SA are not required to meet emission targets, which limits demand for carbon credits.

Adam Simcock, CEO of Carbon Check, which aims to be the first African company able to validate CDM applications, said rather than set up its own carbon pricing scheme, Africa should take advantage of what is already on offer.

“Africa in general has not taken advantage of this terrific programme, which would create huge numbers of jobs,” he said, attributing this to a lack of awareness of the benefits. “The rest of the world is doing this every day.”

The projects stimulate sustainable development and are counted towards the emission reduction targets of industrialised countries.

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