Green paper.jpgThe Department of Environmental Affairs has released the much anticipated and long delayed National Climate Change Response Green Paper (the Green Paper). Global Carbon Exchange’s Kevin James provides SmartProcurement with the points pertinent to you and your business.

  • Annual mandatory submission of greenhouse gas emission data: To the National Atmospheric Emission Inventory by “significant emitters” by 2013.
  • South Africa targets: Reduction of 34% in greenhouse gases by 2020 and 42% by 2025 below the business as usual scenario.
  • The use of incentives and disincentives: A carbon tax “including through regulation and the use of economic and fiscal measures to promote behaviour change that would support the transition to a low carbon society and economy.”
  • Commerce and manufacturing industries: A climate change action plan to be compiled and published detailing short-, medium- and long-term actions that are to be measurable, reportable and verifiable.
  • Energy efficiency and electricity demand-side management initiatives: To be scaled up through the setting of ambitious and mandatory targets.

How might your business be affected?

Kevin James.jpgOne of the critical pieces to come out of this Green Paper is that there is definitely a forthcoming carbon tax, expected for release by the Department of Finance towards the end of 2011 or early 2012, says James.

However, the Green Paper is not specific about what kind of tax (whether carbon, cap or trade) would be implemented and how it would work. But there is no doubt that large carbon emitters will be liable for some kind of tax.

Consequently, a concern regarding a future carbon tax is how the increased revenue from the tax will be reported and utilised by government.

“It is important that a carbon tax does not act as another revenue stream for government, but that the proceeds from this tax are accounted for in a new fund set up to accelerate green investments in South Africa. This is not the case for the revenue generated from the carbon tax levied on the sale of new passenger vehicles since September 2010, which has simply been swallowed up by the government budget,” says James.

Meanwhile, the Green Paper notes that trade in high carbon goods may be prone to trade measures as developed countries respond to climate change and may become reluctant to trade in such goods. Therefore, it recognises that such sectors will be given time and support to move to a lower carbon form of production, adds James.

Manufacturers or retailers of household appliances will have to develop and implement mandatory labels on their products. The Green Paper suggests the introduction of “Minimum Energy Performance Standards (MEPS) for appliances and equipment, as well as proposals for mandatory energy rating labelling”.

Legislation is anticipated regarding property and construction firms installing energy-management systems in large-scale office buildings, and to extend the research and development of new construction materials, housing design and energy efficient buildings.

Good news for those that hope to develop or investigate the feasibility of a potential carbon project or renewable energy installation is that the financial, regulatory and institutional barriers that may delay the implementation of renewable energy feed-in tariffs will be investigated. New innovative forms of financing such operations will also be established.

South Africa will require the mandatory submission of GHG emission data to the National Atmospheric Emission Inventory by all significant emitters by 2013.

Significant emitters will also have to publish a yearly report comparing actual GHG emission data against the emission trajectory, and will be required to keep a register of ‘climate actions’ that mitigate GHG emissions and use this as a measure against national emission reduction targets.

“Medium to large companies in South Africa should watch this space as the definition of a significant emitter hasn’t been made clear in the Green Paper,” notes James.

Where to from here?

The EU and China are showing the world that investment in green technologies and green jobs backed by a clear and strong regulatory regime is an opportunity for growth and not a constraint, as many countries seem to think.

South Africa, the country with the highest CO2 per unit of GDP in the world, understands not only what is at stake but most importantly the opportunities involved in participating in the green revolution. The National Climate Change Response Green Paper sets the tone for this.

The public discussion and consultation phase around the Green Paper has closed. The public’s input will inform the revision of the Green Paper and its amendment into a White Paper, which will then be submitted to Parliament around the middle of 2011 for promulgation, after which it is expected to become law towards the middle to end of 2011. This would then inform the country’s climate change policy, and government has indicated that it would have a legislative, regulatory and fiscal package dealing with climate change by 2012.