The Kyoto Protocol
The Kyoto Protocol was adopted at a Conference of the Parties to the UNFCCC in Kyoto, Japan, in December 1997. The Conference resulted in a consensus decision to adopt a protocol under which industrialized countries (Annex 1 countries) will reduce their combined greenhouse emissions by at least 5% compared to 1990 levels, in the period 2008 – 2012 (this time period is known as the ‘first commitment period'). This legally binding commitment promises to produce a historical reversal of the upward trend in emissions that started in these countries some 150 years ago.

In developing the Kyoto Protocol, the parties to the UNFCCC took into consideration the need to promote sustainable development by implementing policies and measures to, for example, enhance energy efficiency, protect and enhance sinks and reservoirs of greenhouse gases, promote sustainable forms of agriculture, increase the use of new and renewable forms of energy and of advanced and innovative technologically sound technologies.
The Kyoto Protocol was opened for signature on 16th March 1998 and was to enter into force 90 days after it has been ratified by at least 55 parties to the Convention accounting for at least 55% of the total 1990 CO2 emissions for the industrialized (annex 1) countries. 180 nations agreed to a scaled down version of the protocol in 2001 after the United States pulled out. In february 2005, the Protocol finally came into force with the ratification by Russia. It is now therefore a legally binding treaty to which all parties are bound, including South Africa which acceded to the Kyoto Protocol in Mid 2002.

More information on the Kyoto Protocol can be found on its official website Kyoto Protocol and on the UNFCCC Climate Change Information Kit Kyoto Protocol Fact Sheet

Consequences for South Africa.
As noted above, South Africa acceded to the Kyoto Protcol in 2002 and was categories as a Non-Annex 1 (or developing) country under the terms of the Protocol. As such, South Africa does not have a commitment to reduce carbon emissions or any cap (or upper limit) on its carbon emissions.

The Clean Development Mechanism

What is the CDM?
How will 'carbon trading' via the CDM help reduce global warming?
GHGs mix uniformly in the earth's atmosphere. Unlike sulphur dioxide or low-level ozone, carbon dioxide and other GHGs have the same impact on climate everywhere in the world. It does not matter, therefore, where we begin to reduce net emissions. This fact provides the economic justification for international co-operation on climate change projects and project-based emissions trading. International co-operation makes economic sense because emissions reduction in developing countries generally costs less than in industrialised countries. The difference between the marginal reduction cost for the investor (industrialised country) and the host (developing country) is the 'surplus'. The host country and investor country can share the surplus so that both benefit.

How does the CDM work?
A CDM project is a development project, driven by market forces, that reduces GHGs. In a CDM project, an investor from an industrialised country supplies capital or technology, based on the future value of Certified Emission Reduction Units (CERs), also known as carbon credits, which measure the reduction of GHGs in the developing country. The procedure starts with the industrialised country keeping a regularly updated inventory of its emissions. The country may then choose to allocate its national target (set by the Kyoto Protocol) across a number of domestic emitters, in much the same way that resources such as fishing rights or logging rights are allocated. A domestic emitter can meet its allocated target through mitigation activities within the country - or make use of the two Kyoto Protocol project-based flexibility mechanisms: the CDM and the Joint Implementation (JI) procedure.

The CDM allows the emitter to invest in a project in a developing country or buy CERs from someone who has invested in such a project. Under the CDM all parties benefit - the host country is assisted in achieving sustainable development, the owner of the project receives financial and technological assistance, and the emitter in the industrialised country receives carbon credits.

Developing countries already have experience in projects relevant to climate change like energy supply, demand side management, fuel switching, and forestry. These projects typically use equity and debt to raise capital, and produce financial returns for the investor. CDM projects are different because they include another kind of input - carbon investment. The project generates carbon credits with monetary value. Additional financial resources flow to the project to gain carbon credits. This finance is different from equity investments made for financial returns, even if these are made by the same investor. The project must also generate sustainable development benefits for the developing country as a whole, even if these benefits do not accrue directly to the project developer. While it is not always clear how these benefits are to be measured, they are a fundamental component of CDM projects.

The CDM is overseen and guided by the CDM Executive Board. This board is made up of 10 members from parties to the Kyoto Protocol (1 from each of the 5 UN regional groups; 2 parties from 'Annex 1' countries, 2 from non-Annex 1 countries and 1 from Small-Island Developing States). The Executive Board supervises the CDM under the authority and guidance of the UNFCCC COP/MOP. For more information on the roles and responsibilities of this Board see Executive Board modalities and procedures

The CDM in South Africa
Under the rules of the CDM, each host country must establish a Designated National Authority (DNA). The DNA for the CDM in South Africa is located within the Department of Minerals and Energy (DME). The tasks of the DNA are described in the rules for the CDM. The primary task is to provide a formal letter of approval for the project, confirming ow the project will assist South Africa in achieving its sustainable development goals. The DME is currently developing a framework and a set of sustainable development criteria to guide the approval process.

The DNA has set up a website dedicated to the CDM - on the main DME website. Alternativey you can contact Lwazi Tyani at the DNA Secretariat in DME for more information.

For general information on the CDM - more information can be found by following the links below:

CDM Executive Board
CDM Online
CDM Capacity
UNFCCC CDM home page
CDM Watch