Posted: 2006-02-09 23:59 Kyoto carbon credits  Presenter: Lindsay Williams Guest(s): Harmke Immink Concern about the environment is creating business opportunities - Harmke Immink, environmental specialist at PriceWaterhouseCoopers, delivers a presentation on Kyoto Protocol carbon credits at Mining Indaba 2006 LINDSAY WILLIAMS: Harmke, could we go back a step or two? Carbon credits and the Kyoto Protocol was the basis for your speech… HARMKE IMMINK: There’s a lot of interest in the mining industry about the concept of carbon credits - that’s a concept linked to the Kyoto Protocol. The interest for South Africans is that we can do voluntary project reductions - so you reduce emissions, and you actually get refunded for that. In South Africa we do not have targets, but it’s an international conference so we had to cover both sides. LINDSAY WILLIAMS: Why don’t we have targets in South Africa? HARMKE IMMINK: We are a developing country so we’ve got other priorities right now - emissions reduction is not a top priority. Developed countries on the other hand have very strict targets linked to their 1990 level of emissions. LINDSAY WILLIAMS: I think 84 countries representing 62% of global 1990 emissions have ratified the Kyoto Protocol. You linked your presentation to the mining industry - why did you do that? HARMKE IMMINK: Because it’s a mining conference, and there’s a lot of potential in mining. In South Africa everything that’s linked to the mining industry is very energy intensive - in South Africa energy-related projects are linked back to either coal or Eskom. For every kilowatt that we use one kilogram of carbon dioxide goes out into the atmosphere - so we are in the top 20 of the world’s heaviest polluters. There is lots of potential to reduce pollution, but the price of reducing pollution will go up so it makes business sense to do these projects currently. LINDSAY WILLIAMS: Are industries embracing the potential to make this money - are they actually getting out there realising this is a serious business? Who was it we spoke to a while ago - it was Omnia… HARMKE IMMINK: They’ve got a project. United Nations processes are impressively bureaucratic - the first project in South Africa registered was a housing project, the other four that are currently in the final stages of being registered with the UN are all industrial projects. There are more industrial projects in the pipeline that have been delayed either by technology choices, environmental impact assessments (EIAs) and so on - so the projects are going, but projects in South Africa don’t go that fast. LINDSAY WILLIAMS: Where does PWC fit in? HARMKE IMMINK: We fit in the final stages of auditing what they call a “designated operational entity”. LINDSAY WILLIAMS: So you’re making money out of pollution as well? HARMKE IMMINK: In one way yes - we’re assisting everybody to reduce emissions. You need to get an independent validator to confirm that the project meets the requirements of Kyoto? One of the strict requirements - which makes it a bit difficult - is that you have to demonstrate that it’s not business as usual. So if you refurbished every five years, the next refurbishment is not a good CDM project, unless you can demonstrate that you will do something beyond the maintenance - that is what can be registered. So Kyoto intends to get additional projects going, and the money for that is actually quite good - we’ve seen prices of 14 euros per ton of carbon dioxide not emitted. The price depends on who takes the risk for non-delivery if this project doesn’t deliver the emission reductions on time. LINDSAY WILLIAMS: Take a typical example, an iron ore producer for example like Kumba is obviously using vast amounts of energy - contributing to us being one of the top 20 polluters in the world - how much money could they save within five years by embracing Kyoto? HARMKE IMMINK: We did a preliminary calculation - in South Africa the various projects that we know of combined will get R2.5-billion. LINDSAY WILLIAMS: That’s a substantial amount of money… HARMKE IMMINK: Those are the projects that we know of in the pipeline with quite a high likelihood of coming off - so that’s what the companies can actually get. LINDSAY WILLIAMS: Promotion, information and training - the knowledge of this - do companies know about it? The commodity boom in South Africa is having a profound effect on the whole economy, are companies saying: “We don’t need to make money out that because we’re making so much from digging the stuff out of the ground.” HARMKE IMMINK: I think it adds to corporate social responsibility - it actually gives shareholders comfort that companies are addressing greenhouse gas issues. It’s more and more of a concern, and it differs from the other environmental, safety and health issues because this time round you can actually get money in return for doing these types of projects. It’s a win-win situation - the environment benefits, and your bottom line benefits as well. Comments Related to this transcript: 2006-02-17 09:31 - I would like to confirm refunds for reduction of emissions. Who can I contact for more information? 2006-02-18 18:04 - I would like to gather more info on earning/creating carbon credits, besides reforestation and aforestation in South Africa? Comment on this transcript... 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