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

The paper examines the carbon trading landscape, focusing on the Clean Development Mechanism (CDM) and the potential for South Africa to establish a local carbon market. It highlights that while South Africa is the only African country among the top 20 CDM host countries, it remains underrepresented in carbon credit generation due to financing and technical hurdles. The authors argue that a shift from coal dependence to renewable energy is necessary to meet domestic and international targets, and that policy certainty is required to attract further investment.

• South Africa's greenhouse gas emissions are among the top 20 globally, accounting for 1.8% of total global emissions. The country's emissions profile is driven by a heavy reliance on coal-fired electricity and energy-intensive industries including mining, chemicals, and iron and steel.
• To ensure sustainable growth, South Africa's emissions are projected to peak in the next two decades, plateau between 2030 and 2035, and decline thereafter. Achieving this requires reducing coal dependence and adopting clean energy technologies.
• African nations are generally marginalised in carbon credit generation. Out of 2,044 registered Clean Development Mechanism (CDM) projects worldwide, Africa had only 36 projects across eight countries, struggling with technical hurdles and a lack of conventional finance.
• While South Africa is the only African nation among the top 20 CDM host countries and possesses a sophisticated financial infrastructure, its actual CER issuances remain low. As of January 2010, South Africa had 1,138,467 CER issuances compared to a global total of over 375 million.
• The establishment of a local carbon market in South Africa could increase transparency and local investment, potentially through the Johannesburg Stock Exchange. However, such a market requires domestic legislation and a cap on emissions levels.
• The Clean Development Mechanism faces criticism regarding 'additionality'—the requirement that projects produce emission reductions that would not have occurred otherwise. Some NGOs argue that credits are granted to projects that do not meet this criteria, allowing companies to avoid domestic reductions.

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} }