Strong, clear policy signals are required from government on greenhouse-gas (GHG) emission reduction, says advisory firm KPMG in a report entitled ‘South Africa’s Carbon Chasm’.
KPMG recommends that government indicate how it intends to achieve its overall commitment, what actions it expects in each sector, and what policies and incentives will be put in place to ensure the transition to a low-carbon economy.
Almost two years ago, in the international climate change arena, South Africa committed to reducing its emissions trajectory by 34% below ‘business as usual’ emission projections by 2020, on condition that financial and technological assistance is offered by developed countries.
Despite having set these targets, South Africa’s domestic climate change policy, which, it is hoped, would outline more sectoral targets and explain how the country could meet its targets, has been delayed.
South Africa’s Climate Change White Paper was expected to go to Parliament for ratification in June; however, that did not happen and, more recently, Environmental Affairs Minister Edna Molewa said the White Paper could possibly be processed by the end of this year.
Based on the 2010 Carbon Disclosure Project, which provides GHG information on the top 100 JSE-listed companies, the KPMG report analyses how companies are currently setting emissions reduction targets and the levels of reduction these targets can deliver.
In its report, KPMG evaluates how the emission targets of these companies compare with the national commitment, noting that a key challenge in performing a carbon chasm analysis is that South Africa’s absolute commitment has not been quantified.
“The commitment should be quantified and disclosed as a matter of urgency for emitters in South Africa to be able to develop strategies and set appropriate targets for emissions reductions and to be able to participate in carbon markets,” says KPMG.
The findings of the report show the gap between ‘business as usual’ carbon emissions (taken to be the growth without the constraints option under the long-term mitigation scenario) and South Africa’s voluntary commitment of 34% below ‘business as usual’ in 2020 is 253 metric tons (mt) carbon dioxide equivalent (CO2e).
KPMG explains that this ‘chasm’ constitutes about half of South Africa’s current national emissions. South Africa’s total emissions level from all sources for 2010 has been estimated at about 500 mt CO2e.
When considering targets set by the top 100 JSE-listed companies, KPMG says that this chasm is more than halved to 105 mt CO2e. This shows that the private sector will play a big role in South Africa meeting its targets.
KPMG adds that the emissions need to decrease by about 0.2% a year to achieve South Africa’s 2020 commitment. This is somewhat different to govern-ment suggestions that South Africa follow a ‘peak, plateau and decline’ trajectory, where emissions peak between 2020 and 2025, plateau to 2035 and begin declining in absolute terms from 2036.
KPMG says that, to fully bridge the carbon chasm, it is critical that the JSE top 100 have set targets and follow through in maintaining and achieving the targets they have set.
Energy efficiency has also been identified as an emission reduction strategy that companies beyond just the JSE top 100 should be investing in.
“Although it is encouraging to see the articulated voluntary GHG reduction emissions targets in the private sector, it is only through a collective effort that climate change can be seriously addressed,” says KPMG special global adviser on climate change and sustainability Yvo de Boer.
“South Africa will soon become the focus of world attention in the lead-up to COP 17, in Durban, with the chance to address some of the gaps that exist in the international climate framework,” he notes.