An Overview of the Carbon Trading Landscape: Possibilities and Pitfalls for South Africa

This 2010 research paper analyzes the opportunities and challenges for South Africa to engage in international carbon trading to meet emissions targets. While South Africa is a leading African participant in the Clean Development Mechanism (CDM), it remains underrepresented globally compared to countries like China and India. The authors argue that while a local carbon market could stimulate green investment and jobs, success depends on regulatory certainty, financial support from developed nations, and a shift away from coal dependence.

• South Africa faces a significant challenge in reducing carbon emissions due to its high dependence on coal-fired electricity and energy-intensive industries such as mining, chemicals, and iron and steel. The country's greenhouse gas emissions are among the top 20 globally, contributing 1.8% to global emissions, with per capita emissions exceeding the global average and those of China and India.
• South Africa's long-term mitigation scenario (LTMS) from 2006 aims for greenhouse gas emissions to peak in the next two decades, plateau between 2030–2035, and decline thereafter. This strategy requires reducing coal dependence and increasing the use of clean energy technologies and renewable energy sources.
• In December 2009, South Africa pledged under the Copenhagen Accord to reduce its projected 'business as usual' emissions growth by 34% by 2020 and by 42% by 2025, though these targets are conditional on receiving financial resources, technology transfer, and capacity building support from developed countries.
• African countries are generally marginalised in carbon trading and underrepresented in the local generation of carbon credits. Out of 2,044 registered Clean Development Mechanism (CDM) projects worldwide, Africa had only 36 projects across eight countries, struggling with a lack of conventional finance and technical capacity.
• While South Africa is the only African country among the top 20 CDM host countries, its actual CER (certified emission reduction) issuances remain low. As of January 2010, South Africa's issuances were 1,138,467 compared to a global total of 375,064,035, with only 17 projects operational as of February 2010.
• The European Union Emission Trading Scheme (EU ETS) is the world's largest operating emissions trading market. In 2008, the overall carbon market grew to $126 billion, with approximately $92 billion of that value coming from trading in emissions allowances, primary CERs, and derivatives on the EU ETS.
• Establishing a local carbon market in South Africa could offer more flexibility and affordability than a carbon tax. Potential benefits include encouraging local investment in African projects via the Johannesburg Stock Exchange, creating green jobs, and facilitating technology transfer.

APA

Niemack, A., & Chevallier, R. (2010). An Overview of the Carbon Trading Landscape: Possibilities and Pitfalls for South Africa. South African Institute of International Affairs. https://saiia.org.za/wp-content/uploads/2010/12/Occasional-Paper-70.pdf

Chicago

Niemack, Auriel, and Romy Chevallier. An Overview of the Carbon Trading Landscape: Possibilities and Pitfalls for South Africa. South African Institute of International Affairs, 2010. https://saiia.org.za/wp-content/uploads/2010/12/Occasional-Paper-70.pdf.

Wikipedia

{{cite report |last1=Niemack |first1=Auriel |last2=Chevallier |first2=Romy |title=An Overview of the Carbon Trading Landscape: Possibilities and Pitfalls for South Africa |publisher=South African Institute of International Affairs |date=November 2010 |url=https://saiia.org.za/wp-content/uploads/2010/12/Occasional-Paper-70.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{niemack2010overview, author = {Niemack, Auriel and Chevallier, Romy}, title = {{An Overview of the Carbon Trading Landscape: Possibilities and Pitfalls for South Africa}}, institution = {South African Institute of International Affairs}, year = {2010}, month = nov, url = {https://saiia.org.za/wp-content/uploads/2010/12/Occasional-Paper-70.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }