Members of the media are invited to attend the opening session of a workshop on carbon taxes which is being hosted by the National Treasury tomorrow. A discussion paper on carbon taxes was published by the National Treasury for public comment in December 2010. The paper seeks to complement the regulatory efforts of the South African government in addressing environmental challenges.The closing date for comments was 28 February 2011, and the workshop forms part of the National Treasury’s engagement on the matter. There will be a brief question and answer session for the media after the opening session. Details are:
Date: 16 March 2011 (tomorrow)
Time: 09.00 – 11.00 am
Venue: DBSA Vulindlela Academ, 1258 Lever Road, Midrand
To confirm attendance, please contact Kershia Singh on 072 623 4608 or Kershia.singh@treasury.gov.za
Background information on the Carbon Tax Discussion Paper
The carbon tax discussion paper, “Reducing Greenhouse Gas Emissions:The Carbon Tax Option”, follows the 2008 announcement of an electricity generation levy of 2c per kWh, which was the first explicit carbon tax to be introduced in South Africa. It is available on the National Treasury website: www.treasury.gov.za.
A carbon tax seeks to reflect the external costs of greenhouse gas emissions causing climate change, and should help to create a level playing field between high- and low-carbon emitting sectors.The early adoption of a low-carbon growth path can also result in competitive advantages in low-carbon technologies and create incentives for research, development, and increased levels of innovation.
The paper discusses the economics of climate change, the role of carbon taxes in reducing emissions at the least cost possible, and compares regulatory and market-based policy measures as well as carbon taxes and emissions trading schemes. The design of a carbon tax is best addressed by focussing on the definition of an appropriate tax base and measures to mitigate potential adverse impacts on low-income households and on the trade competiveness of certain sectors. The paper argues that the gradual phasing in of a carbon tax is the best way to deal with competitiveness concerns.
Three options for imposing a carbon tax are explored:
- An emissions tax applied directly on measured carbon dioxide emissions;
- An upstream tax on fossil fuel inputs based on the carbon content of the fuel (for example , coal); or
- A downstream tax imposed on the outputs or products generated from fossil fuels (for example, electricity or liquid fuels).
