Local Government, Environmental Affairs and Development Planning

Two draft versions of the Carbon Tax Bill have been published for public comment – in November 2015 and December 2017; the DEA&DP provided comment on both these drafts. At this point it is unclear when the Draft Bill will be finalised or whether it will be published for comment again in future; indications are that South Africa will have a carbon tax eventually.

The carbon tax is aimed at businesses and companies that emit high levels of carbon, polluting the atmosphere. Organisations who don’t reduce their ‘carbon footprint’ will be subjected to pay tax to the State for producing above threshold amounts of carbon. It is ultimately designed to encourage a transition to low carbon options; an aspiration of this Province.

The University of Pretoria conducted an economy-wide modelling of the impact of the proposed carbon tax on the South African economy in 2015; the implications of these results on the Western Cape economy was investigated in the Research project “The Economic Risks and Opportunities of Climate Change Resilience in the Western Cape”. Key points include:

• The Western Cape economy could be negatively affected by national or global carbon pricing, with the most exposed sectors being petroleum refineries, and all high electricity consuming industries such as iron and steel manufacturing.
• However, the Western Cape province could benefit from increased demand for renewable energy stimulated by local or global carbon pricing, given the WCG’s proactive stance in promoting the development of this sector.
• Proactive investment in the sectors that will benefit from a carbon tax would serve the strategic interests of the provincial economy.