Mitigation System PCEA 8 September 2015

Key elements of the mitigation system Carbon Budget Pollution Prevention Plans (Mitigation Plans) Carbon tax Monitoring and Evaluation

SA Emission reduction cycle IRP (2015) Mitigation Potential Analysis (2016/17) Set carbon budget (2018/19) Call for pollution prevention plans (2018/19) Annual reporting (2021 – 25) Assess compliance (end of the cycle – 2026) IRP (2010) Mitigation Potential Analysis (2014) Set carbon budgets (2015) Call for pollution prevention plans (2015) Annual reporting (2016 – 20) Assess compliance (end of the cycle – 2021)

Means of regulating emission of greenhouse gases 1. Carbon Budgets Means of regulating emission of greenhouse gases Greenhouse gas emission allowance Carbon budget system for companies Due to lack of data, etc, phased approach: First phase will run from 2016 to 2020 (5 years) Second phase – 2021 onwards (5 year periods)

First phase Commence on 1 January 2016 and end on 31 December 2020 Key goal is to test the system, to inform comprehensive system post-2020 No compliance mechanism

Principles for allocation: Design Elements Allocated for a period of 5 years- with degree of flexibility from year to year Principles for allocation: Support for existing operations Planned changes to emissions:

National Pollution Prevention Plans The draft regulations on National Pollution Prevention Plans have been developed under the National Environmental Management: Air Quality Act, 2004 (Act No. 39 of 2004) The purpose of these regulations is to prescribe the submission and implementation of pollution prevention plans by companies with carbon budgets The implementation of plans will demonstrate progress towards achievement of the carbon budgets allocated to these companies CONFIDENTIAL

Desired Emission Reduction Outcomes & Mix of Measures Setting of sectoral aspirational goals per sector (Agriculture, Energy, Industry, Transport, Waste) Phased approach First phase- Short (2020) & medium (2030) term MPA will be used as the basis to identify DEROs Mapping appropriate mix of policy measures per sector (Mix of Measures) Government interventions that will support the transition to lower carbon economy and society Used to encourage, incentivise, and/or support emission reduction

Carbon Tax & Carbon Budget Alignment DEA & NT examined various options for the alignment of the 2 instruments Companies that participate in the carbon budget system may receive additional 5% allowance The additional 5% allowance will raise the overall maximum tax-free thresholds to 95% Reduce tax liability

Greenhouse gas reporting Draft National Greenhouse Gas Reporting Regulations have been developed under the National Environmental Management: Air Quality Act, 2004 (Act No. 39 of 2004). They have been published for public comment. The main objective of these regulations is to introduce a single national reporting framework for the reporting and dissemination of information related to GHG emissions in order: to enable the collection of GHG emissions data for SA to meet its obligations under the United Nations Framework Convention on Climate Change to inform the formulation of national policy on greenhouse gas reduction.

Supporting programmes Mitigation technology plan: better understand what is required to support the implementation of climate change mitigation technologies – DST leading National Employment vulnerability assessment: assess impact on jobs, by sector – EDD leading Socio-economic impact: assess impact of mitigation work