A critical review of South Africa's carbon tax policy paper: recommendations for the implementation of an offset mechanism

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University of Cape Town

The South African government has emphasised the need for 'developing country' solutions to climate change that simultaneously pursue GHG reductions and socioeconomic development. To encourage the transition to a low-carbon economy the National Treasury has proposed a carbon tax and offset mechanism to be introduced in 2015. The practical delivery of the offset scheme remains uncertain. This paper investigates which features and governance structure would be desirable for such a mechanism in South Africa. Primary research is conducted into the South African voluntary carbon registry; Credible Carbon. The questions asked by this paper are: Should firms be allowed to offset emissions? What is the ideal way to implement offsets in South Africa? This paper concludes that Credible Carbon provides a good model for carbon trading that can be scaled up to meet demand under the new regulations. However, government needs to ensure that projects continue to deliver acceptable social benefits and that carbon auditors are well-trained and accountable.