Consumers may have to bear brunt of proposed carbon tax - CNBC Africa

Consumers may have to bear brunt of proposed carbon tax

Southern Africa

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The implementation of the carbon tax is expected to reduce greenhouse emissions. PHOTOS: KZN DAE and Getty Images

“At this point, Eskom has said what they are going to effectively be doing is passing that carbon tax responsibility through to its consumers,” Andrew Gilder of the South African Wind Energy Association told CNBC Africa.

This is following talks regarding the finalising of an approach to a carbon tax in order to reduce greenhouse emissions by the country’s Department of Environmental Affairs and National Treasury.

(WATCH VIDEO: S.Africa’s carbon tax policy)

“It will potentially increase electricity prices so the question is then, how clever are you as industry? Are you able to capitalise upon the so-called allowances that have been built into the carbon tax and work your industry in a much more efficient emission manner into the future,” said Gilder.

He also stated that the tax is effectively about the intensity of one’s fuel input and further emphasised the fact that Treasury has built a number of allowances into the system for industry to operate more efficiently.

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“There will be benefits to the economy. I take the point that the idea is that all Treasury is doing is trying to raise more revenue – that is one way of looking at it but the fact of the matter is that it is a component of national climate change policy,” Gilder indicated.

“It’s not the only mechanism that’s being proposed. It’s part of a mix of measures that the country is proposing to the international community around the reduction of the carbon profile of our industry. If we don’t do that, we become increasingly uncompetitive in the industrial space.”

While the carbon tax issue may have been postponed by at least another year, Nedbank sustainability carbon specialist on enterprise governance and compliance, Marco Lotz stated that the subject of whether or not to implement a carbon tax at all remains a complex one.

(WATCH VIDEO: Electric vehicles in SA to reduce carbon emissions)

“We should definitely prise in externalities – environmental externalities. We cannot continue using resources, whether its coal or water, the way in which we’re currently doing,” he said.

“Then completely separate to that we’ve got the discussion of a carbon tax – the question is is that the correct mechanism to address the externalities that we should prise in, and that’s a very difficult question.”

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