Comments on the Carbon Offsets Paper issued by National Treasury in April 2014
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2014
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Energy Research Centre
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Energy Research Centre, University of Cape Town.
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University of Cape Town
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Abstract
While this is not the paper on a full emissions trading scheme (ETS) that had been indicated, comments are provided on the narrower focus of domestic offsets. The design is closely allied to Treasury’s design of a carbon tax as set out in a policy paper (National Treasury 2013), with domestic carbon off-sets designed to reduce tax liability by up to 10%, for activities not covered by the tax. ERC has commented separately on the tax policy, and the present comments should be read together with those comments. The finding that carbon offset projects can generate significant local sustainable development benefits (p. 16) should be treated with caution. The experience with the CDM has been mixed, as assessed for example in (Ellis, Winkler, Morlot & Gagnon-Lebrun 2007). Market mechanisms generally favour low-cost reductions, and require clear policy guidance and / or financial incentives to deliver additional benefits.
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Reference:
Energy Research Centre. (2014). Comments on the Carbon Offsets Paper issued by National Treasury in April 2014. Energy Research Centre, University of Cape Town, Cape Town, South Africa.