Pricing Carbon: Carbon Emission Trading Potential in South Africa Proposed Research Papers

Research Papers 1. Carbon tax versus emissions trading 2. Emission trading scheme design 3. Use of carbon revenue 4. International carbon reduction policies 5. Trading scheme costs and administration 6. Carbon Offsets 7. Consultation and Policy Context 8. Summary: A South African emissions trading scheme?

Research Papers 1. Carbon tax versus emissions trading  Review of carbon taxation  Comparison of tax versus trading Administrative implications Efficiency implications Environmental implications  South African policy considerations  Tax incidence  Market structure 2. Emission trading scheme design  Comparison of emission trading scheme design and design elements  Key design elements and comparisons (allocations, trading rules..)  Implications for South Africa 3. Use of carbon revenue  Scale of revenue  Use of revenue and fiscal considerations  Hypothecation and revenue recycling  Mitigating impacts on households and businesses  South African policy considerations

Research Papers 4. International carbon reduction policies  Cross country comparison of strategies  Current inter-linkages of schemes  Merits of tax vs. trading with regards to future links  Future global carbon market prospects 5. Trading scheme costs and administration  Costs estimates of trading schemes  Monitoring and enforcement requirements  Trading and trading platform requirements  Comparison with other policy options  Legal requirements  Capacity requirements 6. Carbon Offsets  Review of the voluntary markets in relation to trading schemes  Policy issues related to the use of offsets and the cdm  Consideration of the level to which offsets could be used in SA Africa

Research Papers 4. Consultation and Policy Context  Current South African policies and the relationship of these to a trading scheme  Summary of stakeholder views and perceptions  Relationship of a domestic scheme to the CDM and to SA’s position in the global climate change negotiations  Will require structured consultation or at least interviews with the top 20 emitters and key departments. Possibly with the ERC 5. Summary: A South African emissions trading scheme?

Cross-Cutting Considerations Distributional implications  consumers  producers  revenue use and mitigating impacts Market Structure  implications of SA’s specific market structure for both ET and taxation Coverage  addressing energy intensive sectors  addressing competitiveness  coverage of ‘distributed’ emissions – transport, households, agriculture, waste Timing  when should approach be initiated  stability and certainty  relationship to large fixed investments