Entrepreneurship in Carbon Trading- A case study of South Africa

Abstract

The Kyoto Protocol and its implementation brought forward issues of climate change and its mitigation strategy by national measures through the creation of market mechanisms in carbon trading. The Trading of Emission certificates has become an important trade commodity worldwide and its markets have diversified. While this opportunity has created new markets for entrepreneurs and actors that range from farmers to brokers, unequal involvement in most developing countries has been noted. This has been mostly observed in those countries where entrepreneurship is often regarded as the cornerstone of economic growth and social improvement. South Africa has spearheaded other African countries in its implementation of CDM projects leading to carbon trading. Based on a case study of the current entrepreneurial representation in carbon trading in South Africa, the findings suggest that albeit a number of opportunities, the biggest challenge for entrepreneurial participation remains in the nature and processes of the CDM project implementation, the lack of a clear supportive system, limited access to financing and general ignorance of the trading opportunities. The complex nature of the CDM projects themselves limits participation due to lack of the necessary skills on the national level leading to uneven distribution of CDM projecst on provincial levels. Our discussion has employed an exploratory as well as a descriptive research method to explore the existing opportunities and challenges for entrepreneurship in carbon trading in South Africa and the barriers that entrepreneurs may face in order to penetrate it.