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WWF South Africa has welcomed the 2013 Budget’s clear indication of government’s commitment towards establishing a low-carbon economy and its measured approach to the implementation of a carbon tax to come into effect in 2015.
Now that the commitment has been made, government will need to ensure the effectiveness of a carbon tax by examining the implications for different sectors, implementation measures, and the smooth facilitation of the move away from fossil-intensive energy sources toward cleaner, renewable energy.
“A carbon tax is a form of pre-emption against similar types of taxes being imposed on South African exports. A carbon tax also allows us to adjust gradually to what is likely to become standard in the major global economy,” says Saliem Fakir, the Head of WWF South Africa’s Living Planet Unit.
WWF’s considerable domestic and international work on carbon tax measures reflects the reality that some sort of carbon pricing is necessary to address climate change and that such measures will become the global norm. South Africa will have to take cognisance of this if it hopes to protect the country’s exports and economy.
WWF-SA is not, however, oblivious to the economic impacts of a carbon tax implemented without caution. The lack of sufficient available alternative energy services means that consumers are unable to make the fundamental changes that an active carbon tax would necessitate. Raising the prices of fossil fuels through a carbon tax without concomitant scaling-up of renewables and other alternatives would subsequently penalise the consumer.
To avoid this, government must firstly demonstrate greater willingness and consistency in the scaling up of renewable energy initiatives, allowing for a much larger share of renewables in the country’s electricity mix. However, consideration should also be given to the removal of administrative and other barriers for easy adoption of renewable technologies.
To this end, the budget speech is encouraging in the guidance it takes from the National Development Plan, which reflects a much-needed, long-term view of the country’s needs. This in turn will create an enabling environment for South Africa’s low-carbon transition.
“The budget recognises the critical link between long-term environmental sustainability and economic development, inspiring the hope that South Africa will experience better resource management and also deal with the negative environmental impacts from certain types of economic activity going forward which, if not dealt with, will come at a massive cost to the economy.”