Western University Scholarship@Western Electronic Thesis and Dissertation Repository 9-27-2013 12:00 AM Emissions Trading: A Policy Option for Fighting Climate Change in Africa Gbenga Akinwande The University of Western Ontario Supervisor Erika Chamberlain The University of Western Ontario Graduate Program in Law A thesis submitted in partial fulfillment of the equirr ements for the degree in Master of Laws © Gbenga Akinwande 2013 Follow this and additional works at: https://ir.lib.uwo.ca/etd Part of the Environmental Law Commons, and the International Law Commons Recommended Citation Akinwande, Gbenga, "Emissions Trading: A Policy Option for Fighting Climate Change in Africa" (2013). Electronic Thesis and Dissertation Repository. 1662. https://ir.lib.uwo.ca/etd/1662 This Dissertation/Thesis is brought to you for free and open access by Scholarship@Western. It has been accepted for inclusion in Electronic Thesis and Dissertation Repository by an authorized administrator of Scholarship@Western. For more information, please contact [email protected]. EMISSIONS TRADING: A POLICY OPTION FOR FIGHTING CLIMATE CHANGE IN AFRICA by Oluwagbenga Akinwande Graduate Program in L.L.M. A thesis submitted in partial fulfillment of the requirements for the degree of Master of Laws The School of Graduate and Postdoctoral Studies The University of Western Ontario London, Ontario, Canada © Oluwagbenga Akinwande 2013 Abstract This thesis shows how an emissions trading scheme can help African countries contribute to the goal of stabilizing the concentration of greenhouse gases in the atmosphere. This is done through an assessment of the gaps in Africa’s climate change mitigation policy architecture and the potential benefits of emissions trading as a policy instrument—including lessons learned from emissions trading schemes implemented in the US, the EU, New Zealand, and Chile. The thesis concludes that adopting an emissions trading scheme as a policy instrument in Africa could potentially close the gaps in its policy architecture. Keywords Climate Change, Emissions Trading, Carbon Market, Africa, Project Based, Cap and Trade, Rate Based, Greenhouse Gases, Robert Stavins, Thomas Tietenberg, ETS, Carbon Credits ii Dedication I dedicate this work to my late father, Chief Adio Gbolahan Akinwande; and to my family, who have been there for me through it all. Acknowledgments I would like to begin by thanking the Faculty of Law at the University of Western Ontario for providing me with this educational opportunity. I would especially like to thank my supervisor Professor Erika Chamberlain for her guidance throughout the course of this project and my second reader, Professor Sara Seck, for her guidance as well. I am also grateful to other members of the faculty for their various contributions. Lastly, special thanks go to Katerina Barton for her help editing this work. iii Table of Contents Abstract ............................................................................................................................... ii Acknowledgments.............................................................................................................. iii Table of Contents ............................................................................................................... iv List of Figures ................................................................................................................... vii List of Appendices ........................................................................................................... viii List of Abbreviations ......................................................................................................... ix Chapter 1 ............................................................................................................................. 1 1 Climate Change and the UNFCCC ................................................................................ 1 1.1 Introduction ............................................................................................................. 1 1.2 Literature Review.................................................................................................... 4 1.3 Climate Change and the UNFCCC ......................................................................... 7 1.4 Research Methodology ......................................................................................... 24 1.5 Justification of Choice of ETS Case Studies ........................................................ 24 1.6 Scholarly Significance .......................................................................................... 26 Chapter 2 ........................................................................................................................... 27 2 Analysis of Africa’s Climate Change Mitigation Policy Architecture ........................ 27 2.1 Introduction ........................................................................................................... 27 2.2 Carbon Tax in South Africa .................................................................................. 28 2.3 REDD+ in Africa .................................................................................................. 35 2.4 CDM in Africa ...................................................................................................... 43 2.5 National Appropriate Mitigation Actions (NAMAs) ............................................ 54 2.6 Summary Conclusions .......................................................................................... 57 Chapter 3 ........................................................................................................................... 59 3 Emissions Trading as a Climate Change Policy Option in Africa ............................... 59 iv 3.1 Introduction ........................................................................................................... 59 3.2 Evolution of Emissions Trading ........................................................................... 59 3.3 Conceptual Framework ......................................................................................... 64 3.4 Economic Gains of the Policy............................................................................... 72 3.5 Contribution to the Stabilisation of Greenhouse Gases in the Atmosphere.......... 78 3.6 Preparing Africa for a Carbon Constrained Future ............................................... 83 3.7 Viability of the Policy in Africa ............................................................................ 84 Chapter 4 ........................................................................................................................... 87 4 Institutional Barriers Against a Homegrown Emissions Trading Scheme in Africa ... 87 4.1 Greenhouse Gas Inventory Constraint .................................................................. 87 4.2 Monitoring and Enforcement Constraint .............................................................. 92 4.3 Corruption ............................................................................................................. 94 4.4 Summary Conclusions .......................................................................................... 95 Chapter 5 ........................................................................................................................... 97 5 Emissions Trading Scheme Success Stories ................................................................ 97 5.1 The United States Acid Rain Program .................................................................. 97 5.2 Lessons and Transferable Ideas from the US Acid Rain Program ..................... 104 5.3 The European Union Emissions Trading Scheme .............................................. 105 5.4 Lessons and Transferable Ideas from the European Union Emissions Trading Scheme ................................................................................................................ 114 5.5 The New Zealand Emissions Trading Scheme ................................................... 115 5.6 Lessons and Transferable Ideas from the New Zealand Emissions Trading Scheme ................................................................................................................ 120 5.7 Santiago Tradable Permit Program ..................................................................... 120 5.8 Lessons and Transferable Ideas from the Santiago Tradable Permit Program ... 123 Chapter 6 ......................................................................................................................... 124 6 Conclusion ................................................................................................................. 124 v Bibliography ................................................................................................................... 127 Appendices ...................................................................................................................... 142 Curriculum Vitae ............................................................................................................ 161 vi List of Figures Figure 2.1 Percentage Share of Total Number of Projects in the CDM Categories .............. 48 Figure 2.2 Growth of Total Expected Accumulated 2012 CERs ............................................ 48 Figure 2.3 Global BC Emissions Based on Year 2000 Estimates .......................................... 50 Figure 3.1 Total Global Non-CO