To Tax or Trade (or Both or Neither)? - The Confusing South African Status Quo on Carbon Taxation and Emissions Trading

South Africa has a rapidly evolving climate change policy environment, which is in keeping with the country’s view of itself as a developing country leader in the climate change arena. Part of the policy environment includes attention to financial mechanisms that can be marshaled in support of the response to climate change. Flowing from the notion of using financial mechanisms in this manner, the South African National Treasury has taken initial steps towards the implementation of carbon taxation over emissions trading. While Treasury’s progress towards carbon taxation is in keeping with its primary role in financial matters, a dichotomy exists between Treasury’s view on how revenue raised from carbon taxation should be applied and the view of the Department of Environmental Affairs (which is the custodian of the national climate change policy). This article explores these and related issues with the purpose of giving a flavour and the status quo of the debate around carbon taxation and emissions trading in South Africa.

South African climate change policy has been developing apace for some years, and is finally at a point where esoteric discussion on options is being replaced with slightly more concrete realisation of the national ambition of contributing to the international climate response. This is not to say, however, that a clearly articulated climate change legal regime has emerged in the country. Rather, the regime is still emerging with a number of competing policy options currently vying for the attention of the law maker. Such options (from the perspective of mitigation) range from greater attention to renewable energy and energy efficiency to a fastdeveloping Carbon Capture and Storage (CCS) programme.
Given the multiplicity of options that may coalesce into a future regime, the purpose of this article is not to provide a detailed analysis of the entire scope of South African climate change policy development, but rather to consider the more limited issues of how carbon taxation and emissions trading fit into the broader scheme. In order to do so, this article provides a brief overview of the evolving policy landscape before proceeding to deal with the tax/trading status quo, which status is, itself, merely another marker on an already well-traversed road. Put another way, after a series of twists, turns, double- backs and detours, the country seems finally to have fallen onto a straighter path towards a hybrid tax and trading future. It still remains to be seen whether this future will be realised in its currently anticipated form, or whether further obstacles lie ahead, particularly in light of an apparent difference of opinion between two responsible government departments on the application of the revenues raised from carbon tax.



Copyright: © Lexxion Verlagsgesellschaft mbH
Quelle: Issue 4/2012 (Dezember 2012)
Seiten: 7
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Autor: Andrew Gilder

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