Building capacity to help Africa trade better

Trade and Climate change update for May 2011


Trade and Climate change update for May 2011

Willemien Viljoen, tralac Researcher, provides an update on the UN Climate Change negotiations

On 28 and 29 May 2011 South Africa hosted a Ministerial Meeting of the BASIC group, including Ministers from Brazil, India, China and South Africa in Durban. This was the second meeting of the group of countries after the Conference of the Parties (COP 16) to the United Nations Framework Convention on Climate Change (UNFCCC) took place in Cancun, Mexico in December 2010. The aim of the meeting was to prepare and devise the strategies of the countries for COP 17 which will take place in Durban from 29 November-9 December 2011.

In a joint statement (available here) issued at the end of the meeting various areas of concern and cooperation was identified by the parties. The parties agreed that a multilateral approach to climate change must be followed and stated that a unilateral approach, like the inclusion of emissions from the aviation sector in the European Union Emissions Trading Scheme, are not in line with the principles of the Climate Change Convention. According to the parties the issues related to maritime and aviation emissions and agriculture must be addressed in the multilateral forum. The parties also indicated that a second commitment period for the Kyoto Protocol, after 2012, will be a central part to a comprehensive and balanced outcome at COP 17 later this year. The urgency of support for developing countries for adaptation strategies, especially in the Small Island States, least-developed countries and Africa was also discussed. The parties also indicated that a fund between the BASIC countries to stimulate research on climate change issues has been considered.

Currently the majority of the BASIC member countries are developing various national adaptation and mitigation strategies in an effort to meet their national emissions targets. China is currently considering a pilot emissions trading scheme to be implemented in six provinces by 2013 and on a nationwide basis by 2015. A cap-and-trade scheme for energy savings in the building sector to create energy savings credits is also being developed.

India is considering an innovative market-based trading scheme to curb emissions growth and encourage energy efficiency and green power. The scheme will be a national market based mechanism named Perform, Achieve and Trade (PAT) which will be a mandatory scheme that will set a benchmark efficiency level for 563 polluters in various industries, including power plants, steel mills and cement plants. These industries account for 54 percent of the country’s energy consumption. The scheme will allow businesses using more energy than that which is stipulated to buy tradeable energy savings certificates from those industries using less energy. It is estimated that this scheme will create a market worth US$ 16 billion in 2014 when trading will start. The number of certificates available will depend on the amount of energy saved in a specific target year. India has also rolled out a renewable energy certificate (REC) trading scheme for wind, solar and biomass power plants which is traded on a monthly basis. 14002 RECs were already being traded by 25 May 2011. India and the United States have also announced a collaborative fund of US$ 50billion to promote research in clean energy technologies. The fund will be used to finance academia, institutions and industry in both countries to undertake research on all aspects of clean energy technologies.

South Africa has also made some progress in the area of renewable energy with the White Paper on the Promotion of Renewable Energy and Clean Energy Development committing to a renewable energy target of 10000 GWh by 2013. South Africa has also committed to a 4 percent share of electricity from renewables by 2012 and 13 percent by 2020 by setting specific targets for the development of solar and wind power.

Although these BASIC member counties undertook to develop and implement the various indicated projects, it is now a waiting game to see whether these projects will move from the planning to the implementation phase. In Brazil there has already been a major step backwards on its commitment to address deforestation by the passing of a new law which relaxes the current laws on deforestation of hilltops and the amount of vegetation to be preserved in the Amazon rainforest.



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