SA in line on tax – expert

Despite economists voicing sentiments that the new carbon tax is the government’s way of collecting the money it desperately needed, an expert insists South Africa is simply fulfilling its obligation to assist in global issues of climate change.

Carbon tax, which seeks to promote the polluter-pays principle, was announced by Finance Minister Tito Mboweni in his budget speech earlier this year, where he said it would deal with the damage caused by high carbon emissions and encourage lower carbon options.

Treasury confirmed on Sunday the carbon tax is scheduled to come into effect on Saturday and go through two phases – one from 2019-2022 and the other from 2023-2030. It plans to hold companies, individuals and public entities liable for emitting greenhouse gases, including carbon dioxide, methane, nitrous oxide, perfluorocarbons, hydrofluorocarbons and sulphur hexafluoride.

Climatelegal.co.za director Andrew Gilder said up until this point, there had never been any form of regulation on the emissions of greenhouse gasses and the new carbon tax was “the first time a price is placed on greenhouse emissions”.

Previously, he said, no regulation meant companies producing these gases could “pollute without the right to pollute”.

“There has always been an actual cost to the environment that emissions are creating but companies producing them have never been required to pay.“Now, what was a previously internal, invisible cost has been made external,” Gilder said.

He said the question on how the money collected from carbon tax would be spent was a complicated one. Gilder said although the department of energy shared its willingness to support renewable energy developments, Treasury could not commit to announcing that money raised from the carbon tax would be used specifically for that issue as there were other issues within the sector that could be more pressing, and its goal was to give attention where there was the greatest need.

Global independent conservation organisation, World Wide Fund for Nature (WWF) said it welcomed the Carbon Tax Act as it was an indication by President Cyril Ramaphosa that there was urgent need to act on the global climate crisis.

“We commend the president for putting wheels to this long overdue issue,” said WWF chief executive Dr Morne Du Plessis.

“The purpose of the tax is to improve human health, contribute to climate commitments and give resilience to the environment as much as to the economy. During the second phase, we will have to ramp up our transition ambitions significantly.”

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