invezz.com: Carbon Credit Sales Can Benefit State Budgets

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Governments’ green initiatives can not only be good for the environment, but can also contribute to state budgets, claims a new article by http://www.invezz.com. The article examines the recent case of South Africa, which plans to earn carbon credits by restoring the country’s 1.4 million hectares of spekboom.

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So far, governments have focused on green initiatives that only pull money away from the state budget and rarely bring in direct financial benefits to the government

iNVEZZ.com, an online destination for carbon market information, released an article today claiming that governments can support green initiatives and reach their national emission reduction targets, while at the same time claim revenue to replenish state budgets. The website says this can be achieved through investing in offset projects earning governments carbon credits, which can then be sold on the open market.

The article comes as a response to South Africa’s announcement last month, in which the country unveiled plans to sell carbon credits from a green offset project. It is estimated that the initiative will generate approximately R250 million ($31 million) for the state budget. The Department of Environmental Affairs (DEA) also expressed its intentions to use the new revenue for restoring damaged agricultural and conservation areas.

iNVEZZ.com explains that the local government is taking advantage of the carbon market to fill in the budget gap for restoring South Africa’s affected landscapes. Government officials expect that the costs associated with the initiative are around R57 billion. The current budget in place is R1.8 billion.

The article further says that one of the projects producing carbon credits, which the DEA is subsidising, is the Eastern Cape Parks and Tourism Agency initiative to replenish close to 1.4 million hectares of spekboom. Spekboom is a type of bush with a capacity to sequester carbon dioxide. Carbon-investments.co.uk cites a research report, which claims that the plant’s carbon storage “exceeds 20 kg/m2, which is an unusually large amount for a semiarid ecosystem.”
Carbon-investments.co.uk reports that two international quality assurance standards, the Verified Carbon Standard (VCS) and the Climate, Community and Biodiversity Alliance (CCBA), have already evaluated the initiative and have issued a number of certified carbon credits.

Quoting Christo Marais, manager of the Department of Environmental Affairs’ natural resource management programs, the investments website further explains that between 2010 and 2011, the South African government has spent R24 million on the spekboom project, with an additional R18 million already set aside for the upcoming fiscal year.

“So far, governments have focused on green initiatives that only pull money away from the state budget and rarely bring in direct financial benefits to the government,” according to Tonka Dobreva of Dezz, the digital media company operating invezz.com. “South Africa’s strategic investment can be an example of how governments can direct taxpayer money into initiatives, which not only help the environment, but also contribute to the state budget.”
Carbon-investments.co.uk gives two examples as effective, yet budget depleting, ways governments currently employ to encourage businesses and individuals to use cleaner technologies and engage in low carbon practices. One of them is the UK feed-in-tariff system, which encourages households to install rooftop solar panels. In exchange, the government compensates consumers by purchasing their excess electricity and adding it to the grid. The second example is the U.S. government’s loan, upwards of $500 million, to a California-based solar panel manufacturing company, which recently declared bankruptcy.

In addition, the article claims that tariffs, loans, tax breaks and other existing incentives governments undertake to develop the green investment sectors in their countries have resulted in depleted government funds, especially noticeable in times of global economic downturn. The commonly used practice of taxing polluting industries is perhaps the only mechanism that brings in money, says invezz.com. It doesn’t come as a surprise, the website concludes, that many view national emission reduction goals as a serious burden on local economies.

invezz.com advises that governments should employ an entrepreneurial mindset when it comes to achieving their emission reduction goals, which could allow them to earn money for state projects. Investing in forestry offset projects is one option; lending public land to alternative energy installations is another, claims the website.

To read the full article and to get more information about carbon credits, visit http://www.carbon-investments.co.uk/how-carbon-credit-sales-can-benefit-state-budgets.php.

About Dezz (dezz.com)
Dezz is a UK-based boutique digital media company providing original and reliable up-to-date information in the area of carbon credit trading and sustainable investments to large investment company decision makers, NGOs and to eco-minded individuals. Dezz Limited, 843 Finchley Road, London, NW11 8NA. Registered in England and Wales as a Limited Company. Company Number: 07376661

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