WWF South Africa Submission to National Treasury on the Revised Carbon Tax Bill of Dec 2017
Support for carbon tax
WWF South Africa continues to support and welcome the establishment of a carbon tax to facilitate South Africa’s transition to a low-carbon economy. The Long Term Mitigation Scenarios (Winkler, 2007) identified a carbon tax as one of the key “wedges” required to drive South Africa’s emissions downwards, and this was effectively reiterated in the 2014 Mitigation Potential Analysis, which highlighted a lack of options for mitigation without a stronger pricing driver. WWF South Africa is therefore glad to see that this much-delayed legislation is close to submission to parliament, and urges that a functional carbon tax be promulgated as soon as is feasibly possible. From its original conception in the 2007 LTMS, through the 2013 Policy Paper and the 2015 Draft Bill, the original start date has slipped by more than a decade. Given the urgency of the issue, we can ill afford more delay.
WWF is confident that that proposed management arrangements are sufficient for the carbon tax, and welcomes the clarity on aviation sector coverage under the carbon tax. WWF South Africa also strongly agrees with the response in the Response Document regarding the current emissions trajectory in that a slowed rate of growth does not obviate the need for a carbon tax to incentivise further reductions in overall carbon dioxide emissions.
WWF is also glad to see that certain of our prior recommendations have been integrated into this version of the bill. However, there are still significant issues that need urgent addressing if this is to be an effective tool for driving mitigation. We appreciate that Treasury sees this largely as a Pigouvian tax that is designed to generate revenue whilst correcting an ineffective market outcome. However, it is important to understand that it fills a larger role than this, and that as currently conceived it will not adequately fill this role.