Most Read Contributor in South Africa, September 2016
A renewed interest in the concept of carbon pricing was ignited
by the publication of the "Discussion Paper for Public Comment
Reducing Greenhouse Gas Emissions: The Carbon Tax
Option" (the "Discussion Paper") published
by the National Treasury in December 2010.
According to the Discussion Paper, the paper was aimed at
building on "the work contained in the
Environmental Fiscal Policy Reform
Paper" published as early as 2006.
In terms of the Discussion Paper "the two main economic
policy instruments available for putting a price on carbon and
curbing GHG emissions are carbon taxation and emissions trading
schemes". The Discussion Paper itself was intended to
"consider the economic rationale for introducing a carbon
tax" while it was stated that the "next phase of
government's investigation into a carbon pricing regime will
elaborate on the economics, design and practicality of an emissions
trading scheme." In this regard, it was stated that the
policy discussion in respect of an emissions trading scheme
("ETS") would be published for comment next year that is,
The impression created by the Discussion Paper was, therefore,
that the introduction of a carbon tax in South Africa was not a
fait accompli but rather an option under consideration within a
process of public debate.
The policy discussion in respect of ETS has not as yet been
published and it is only expected to be published in August 2012.
In the interim, however, a framework for the introduction of a
carbon tax was announced in the 2012 Budget Speech together with
the proposal that a carbon tax be implemented in 2013/2014 at a
rate of R120 per ton of carbon tax equivalent (CO2e) on direct
The extent of the detail of the framework for the proposed
carbon tax as announced in the Budget Speech appears to suggest
that a decision to proceed with the carbon tax option as the
preferred carbon pricing mechanism, including the design thereof,
has already been made. This contention finds further support from
an indication that it is intended that National Treasury's
"next steps" is the release of carbon tax legislation for
comment in May 2012.
An optimistic view may, however, be that it is not in fact the
end of the road for public debate but rather that it is intended
merely as a parallel process in the event that it is ultimately
decided that carbon tax is indeed the most suitable carbon pricing
option for South Africa.
It is hoped that cognisance is taken of the lengthy nature of
the Australian experience in determining the most suitable design
for the imposition of a carbon pricing mechanism, and that such a
decision is not taken prematurely within the South African context.
Needless to say it is evident that companies should start
positioning themselves, if they have not already started, for the
measurement and verification of their greenhouse gas emissions.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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The Honourable Minister of Mineral Resources, Ms Susan Shabangu, reinforced during her 2012 budget speech on 10 May 2012, amongst other things, that the Department of Mineral Resources (DMR) remains determined to continue issuing stoppage notices in terms of section 54 of the Mine Health and Safety Act, No. 29 of 1996 (MHSA) to ensure compliance with the MHSA.
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