4. Mitigation

4.1. Post – 2020 Climate Change Mitigation System

The Department of Environmental Affairs (DEA) commissioned DNA Economics and The Greenhouse to develop the methodology for the post-2020 climate change mitigation system. Stakeholder workshops were held on 15 and 16 February 2017 to present the draft report. The report deals primarily with carbon budgets post-2020 (phase 2) and the interface with the carbon tax, as well as the methodology for the setting of sector emission targets (SETs), previously called Desired Emission Reduction Outcomes (DEROs). A short window of opportunity was given to submit written comments. ITTCC members participated in a workshop at BUSA to develop Businesses comments, which were then submitted to the DEA for consideration.

A key criticism of the report was the lack of broader context of these elements with other elements included in the white paper, which makes it difficult to get a clear overall picture.

It was acknowledged that the report was not policy, but rather a methodology to be used to develop a legislative framework, and to this end it was commented that the process of setting carbon budgets to date has not been ideal. Additionally, it is imperative that the process of setting carbon budgets is ultimately comprehensively set out in legislation.

Business again commented on the misalignment between government departments and called for this to be addressed. Business also reiterated comments that the complexities of the methodology and its impact ought to be considered, and called for the establishment of a technical advisory committee, including Business representatives, to address this.

A welcome recommendation in the methodology was that a carbon tax should be applied at the full rate, only if the organisation exceeds its carbon budget. This interface is in line with recommendations that Business has made to Government, however, much depends on the process for setting the budgets; how carbon offsets interplay with the other elements; the rate of the carbon tax; and whether implicit carbon pricing mechanisms are still in place.