Farmers, forest growers and land owners stand to benefit from the innovation, change of business and change in government policies that climate change will bring.
The world's spotlight is firmly on environmental issues for leaders of 193 countries gathering for the next annual UN climate summit in November 2011 in Durban, South Africa, where discussions about global environmental agendas on a business, legal and financial platform will take place.
A number of activities happening on South African soil have investors buzzing around our honey pot:
- our hosting of the 17th United Nations Framework Convention on Climate Change (COP 17), at the end of the year,
- an update on a released discussion paper on carbon tax is expected,
- the current Independent Power Producer (IPP) programme for renewable energy investments, and
- the necessary policy changes in the future to reduce green house gas emissions
Trevor Baptiste, tax consultant at Norton Rose South Africa believes now is a good time for South Africans to start actively examining opportunities and considering project activities in the land sector, for example, by participating in future carbon farming and in generating revenue through the creation of carbon credits. This will be particularly relevant for potential participants in the farming, forestry, land management and landfill sectors.
It is also important that other potential market participants, advisers and intermediaries understand the opportunities associated with carbon farming and incorporate these into their planning for 2012 and beyond.
Further to that, the private sector is directly involved by reason of the new Companies Act requiring companies to promote compliance of the Bill of Rights which includes a commitment to prevent pollution, promote conservation and secure ecologically sustainable development.
On August 23, 2011, the Federal Parliament of Australia passed the legislation required to implement the Carbon Farming Initiative (CFI). The CFI is a carbon offset scheme designed to allow abatement activities from the land sector to generate carbon credits which can be used in the domestic and international compliance and voluntary carbon markets.
The intent underlying the CFI is to give farmers, forest growers and land owners access to domestic voluntary and international carbon markets and to begin to unlock abatement opportunities in the land sector.