SA under pressure to bring in carbon tax

The latest emissions gap report by the UN Environment Programme shows a ‘catastrophic’ gap between the pledges made by countries to reduce greenhouse gas emissions and the steps taken to cap global warming. According to a BusinessLIVE report, SA failed to introduce a carbon tax as planned for January. Local climate-change experts are concerned that the delays may cast doubt on the government’s commitment to climate-change mitigation. A draft Carbon Tax Bill was published in November 2015 with an implementation date of 1 January. A revised Bill was promised by mid-2017 and Finance Minister Malusi Gigaba says it will be published ‘soon’. The country, which is a signatory to the UN’s Paris Agreement on climate change, has committed to a 34% emission reduction by 2020. Cova Advisory joint MD Duane Newman says the carbon tax was included as a key policy instrument in SA’s written commitments on how to achieve its emission reduction targets. Climate Change director Andrew Gilder says the tax is aimed at generating revenue, ‘but it also has a broader purpose – to change behaviour. It is intended to hurt,’ he said. DNA Economics director of climate change and energy Brent Cloete said considering the enormous investment China is making to increase the carbon efficiency of its economy, SA should start transitioning to a lower-carbon economy to have any hope of being able to compete internationally. Cloete added that several local modelling exercises have shown that, depending on how revenue raised by the tax is recycled, the carbon tax is not expected to have a large negative effect on growth.

Full BusinessLIVE report