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SOUTH AFRICA’S CENTRAL CLIMATE MITIGATION POLICY INSTRUMENTS AND THEIR IMPACT ON THE POWER SECTOR – Meridian March 2022

SOUTH AFRICA’S CENTRAL CLIMATE MITIGATION POLICYINSTRUMENTS AND THEIR IMPACT ON THE POWERSECTOR – Meridian March 2022

Authored by Emily Tyler and Lonwabo Mgoduso
EXECUTIVE SUMMARY 
• South Africa is in the process of finalising a domestic climate policy architecture comprising both regulatory and pricing instruments to implement the country’s climate mitigation objectives and commitments. 
• Accelerated decarbonisation in the electricity sector – contributing 42% of the country’s emissions – is critical for the country to meet both its recently updated Nationally Determined Contribution (NDC), and its Low Emissions Development Strategy which aspires to a net zero carbon goal by 2050.
 • Critically, this implies an urgent and far more rapid build out of renewables (and storage in the medium term) than has been demonstrated to date. 
• Multiple modelling studies now show that a renewable energy dominated future power system is the most affordable for the country. A decarbonised electricity supply also enables green industrialisation and investment opportunities. 
• The pace at which the power sector can transition in a just, managed, yet adequately ambitious manner has now become the main focus of policy, regulatory, financing and technical work.
 • South Africa’s domestic mitigation policy architecture currently includes three main instruments: An economy-wide carbon tax; Sectoral Emission Targets (SETs) which are anticipated to comprise of both quantitative and qualitative elements; and company-level Carbon Budgets. 

Regards,

Peter Atkins
Mobile +27 (0) 74 104 2944

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