South Africa introduces carbon tax to cut emissions

South Africa has introduced a new carbon tax as it aims to lower its greenhouse gas emissions and meet the aims of the Paris Agreement.

The new measure, which will take effect on Saturday June 1, was finally signed into law by president Cyril Ramaphosa, the country’s treasury announced yesterday.

The law will target high-polluting businesses, levying tax on greenhouse gases from burning fossil fuels and industrial emissions in a move designed to push South Africa towards cleaner energy sources.

‘Climate change represents one of the biggest challenges facing humankind, and the primary objective of the carbon tax is to reduce greenhouse gas emissions in a sustainable, cost effective and affordable manner,’ the treasury said in a statement.

The law was first planned in 2010 but has taken years to implement after it faced intense scrutiny from South Africa’s energy and heavy industry companies, who said it would push up costs and electricity prices.

The tax will be split into two phases, with businesses being taxed 120 rand (£6.48) per tonne of carbon dioxide equivalent (CO2e) produced starting this year.

However, according to South Africa’s National Treasury, tax breaks will effectively reduce the rates of tax to between 6 rand and 48 rand per tonne of CO2e for the first three years.

The impact of the tax on reducing carbon emissions will be reviewed in 2022 before the second phase of the tax will begin in 2023, running until 2030.

The news has been cautiously welcomed by politicians and environmental charities who have called it a ‘landmark’ moment for South Africa.

Patricia Espinosa Cantellano, executive secretary of the UN Framework Convention on Climate Change, tweeted yesterday: ‘Thank you, South Africa, for introducing a #CarbonTax in response to #ClimateChange as one of the biggest challenges facing mankind.

She added: ‘Putting a #PriceOnCarbon is essential to meet the #ParisAgreement goals and the #GlobalGoals.’

However, some critics have said that more needs to be done to make the carbon tax truly effective, saying that the tax rate has not been set high enough.

South Africa’s implementation of the carbon tax makes it one of around 40 countries worldwide that have embraced taxing carbon as a way to encourage emissions reductions.

South Africa is currently the 14th largest polluter in the world and the largest in Africa, according to Greenpeace, in part due to its reliance on coal for its energy supply.

According to the Climate Action Tracker, which tracks countries’ progress towards meeting the goals of the Paris Agreement, South Africa is not currently on track to meet its climate targets.

The tracker, which was last updated at the end of November 2018, called South Africa’s climate commitments ‘highly insufficient’, saying that if they applied to all government targets global warming will reach between 3 and 4 degrees C – well below the Paris Agreement’s 1.5C limit.

Image credit: South African Tourism (CC BY-SA 2.0)

Chris Ogden

Chris Ogden

Digital News Reporter

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