Kyoto opportunities for entrepreneurs

If the Kyoto Protocol survives the first commitment period, which began in February 2005 and ends in 2012, then non-annex I countries like South Africa will be required to cut emissions post-2012. South Africa contributes 3% of GHG emissions worldwide, and if the country takes a proactive approach to emissions reductions, there will be significant opportunities through the Clean Development Mechanism (CDM). Both the government and entrepreneurs can identify innovative projects that could be targets for investment from annex I countries.

PricewaterhouseCoopers (PwC) reported in March 2006 that there were six South African projects that had either been approved or were in the final stages of approval under the CDM, and that there were several other projects in the pipeline. PwC believes that South African companies could earn at least R5.8 billion over the next ten years from the sale of carbon credits earned on the six projects.

South Africa has very few CDM projects compared to developing countries like India, and PwC believes this is because of cumbersome project approval processes (including environmental impact assessments).

There is a GHG Clearinghouse website that is intended to function as a knowledge centre for climate change in general and CDM project development in particular. This is based in South Africa, but is intended to serve all of Africa.

Another opportunity for a forward-thinking firm in a developing country is to "register as a 'designated operational entity', the function of which is to validate CDM project activities and to verify and certify the emission reductions." In March 2006 it was reported that PwC in South Africa had applied for registration.

[Sources: Business Day, 29 June 2006; and Business Report, 20 March 2006]