South Africa published proposals for a carbon offset scheme on Tuesday aimed at helping companies lower their liabilities in a carbon tax due to be imposed in two years that is meant to reduce greenhouse gas emissions.
Carbon offsets are a measurable avoidance, reduction, or sequestration of carbon dioxide or other greenhouse gas (GHG) emissions.
“Carbon offsets will enable firms to cost-effectively lower their carbon tax liability,” the Treasury said.
“They will also incentivise investment in least-cost mitigation options in the country, driving investment in GHG-mitigation projects that deliver carbon emissions reduction at a cost lower than the carbon tax.”
The carbon tax, expected to be phased in over time from 2016, is one of several environmental initiatives that include a biofuels production incentive and greater vehicle emission taxes.