South Africa unveiled proposals Monday that would enable companies to offset as much as 10 percent of their carbon emissions by investing in projects that help conserve the environment and create jobs.
An offset program is contained in draft laws published in November last year that provide for a tax on emissions.
The government said the measure is needed to meet a target of reducing the discharge of greenhouse gases by 34 percent below a scenario of “business as usual” in five years and by 42 percent by 2025.
The duty, which will probably come into effect next year, will start at 120 rand ($8.06) per metric ton of carbon dioxide-equivalent emissions.
“Carbon offsets can be generated through investments outside of a taxable entity’s activities that results in quantifiable and verifiable greenhouse emission reductions,” the National Treasury said in an e-mailed statement accompanying the draft offset rules. Projects should contribute to sustainable development and job creation “by encouraging investments in energy efficiency, rural development projects and initiatives aimed at restoring landscapes, reducing land degradation and biodiversity protection.”
The offset program will be administered by a unit within the Department of Energy and limited to initiatives within South Africa.
Renewable electricity projects, many of which have attracted other incentives, won’t qualify, the Treasury said.
Interested parties have until July 29 to comment on the proposed regulations.
Source: bloomberg