The potential impact of the proposed carbon tax on various sectors in South Africa

Any Government policy decision that would demand shifts in human and economic behaviour, the Carbon Tax Policy Paper has raised certain concerns, ranging from the potential of the tax to harm South Africa’s competitiveness to the transfer of the potential burden of the tax to poor consumers. The political challenges of introducing carbon taxes, such as a reduction in national employment and wages as well as job losses in the mining and heavy industries, among others, were also highlighted. It is in this respect that this study was designed to provide Members of Parliament (MPs) with sector-specific impacts of the proposed carbon tax that will be implemented in 2016, on the respective national executive portfolios that they oversee in Parliament. Thus, nine sectors were covered in this investigation, comprising Fisheries; Water; Environment; Minerals; Trade and Industry; Economic Development, with a focus on small, medium and micro-enterprises; Tourism; and Finance. A uniform approach has been used in assessing the implications of the proposed carbon tax for all the sectors covered by the study. Each sector opens with an introductory part where the scope or relevant subsectors within a sector which are to be covered, are presented.

Background information to the sector may is provided in this section. This is followed by the substantive sections of the study, featuring the socio-economic impacts of global climate change on particular sectors or subsectors thereof. Equally significant is the section outlining the progress made in the implementation of climate change adaptation strategies for the relevant sectors/subsectors, typically encompassing institutional frameworks, programmes and measurable outcomes on the ground, statistics or indicators applicable to adaptation and mitigation, gaps, weaknesses, impact (current and future), proposals or recommendations. The potential impact of the proposed carbon tax is assessed for each sector where applicable, and observations on the experiences of other countries in dealing with the implementation of carbon tax, are also made. An effort has been made to highlight how South Africa could draw from the experiences of those other countries, avoiding pitfalls that they could not see due to lack of prior experience with this dynamic market-based instrument for mitigating climate change. Finally, the paper for each sector concludes by identifying to legislators how they could effectively participate in guiding and overseeing the successful implementation of the Carbon Tax Policy to realise the strategic objective of reducing greenhouse gas emissions, and in facilitating South Africa’s climate adaptation responses, consistent with the existing policy frameworks, notably the White Paper on Climate Change.