South Africa Introduces Carbon Tax
South African President Cyril Ramaphosa has signed into law a carbon tax to cut emissions in the continent’s worst polluter, the Treasury said Monday, drawing cautious praise from environmentalists.
The tax, a rare step for an emerging economy, will be levied from June 1 on greenhouse gases from fuel combustion and industrial processes and emissions.
The tax was first planned in 2010 but has been delayed by opposition from business and industry in a country struggling with low growth and unemployment near 28 per cent.
“Climate change represents one of the biggest challenges facing humankind, and the primary objective of the carbon tax is to reduce greenhouse gas emissions in a sustainable, cost-effective and affordable manner,” the Treasury said in a statement.
It said the tax was part of South Africa’s efforts to meet the global climate change agreement negotiated in Paris in 2015.
Set at 120 rands (8.30 USD) per tonne of carbon dioxide, the tax will be largely offset by allowances to lower it to an effective rate of between six and 46 rands per tonne in the first three years.
South Africa — which relies largely on coal for its energy supply — is the 14th largest polluter in the world and the largest in Africa, according to Greenpeace.
The tax is set to rise at two per cent above inflation, currently at 4.5 per cent, until 2022 and in line with inflation afterwards.