Prudence of proposed carbon tax under scrutiny

The department of Transport (DoT) is continuing to liaise closely with the National Treasury to examine whether the best way to reduce emissions is by introducing a carbon tax. According to Mawethu Vilana, deputy director general of the DoT, the introduction of such a tax could impact negatively on the transport industry, especially in terms of its competitiveness. “We want Treasury to look at other means of addressing South Africa’s emissions and not just implement a carbon tax. We remain in talks with them to ensure that we are reducing emissions in the right way.” Vilana said essentially the DoT was asking that all options be considered before levying yet another tax. “Ultimately the costs are passed on to the consumer who cannot afford it. South Africa is far from its major trading partners and we must take into consideration the impact on the cost of logistics should another tax be implemented.” He said by no means was the DoT saying it was not the solution, but there were other ways to reduce emissions and incentivise people and companies to reduce their own carbon footprints. “As the DoT we also believe that the money must be ring-fenced and feel very strongly about that. If we are taxing to reduce emissions then the money must be used to purchase the right technologies so we can do just that.” According to Sean Nel, executive of the industry task team on climate change, a carbon tax would increase costs but what was just as important was the timing of implementation of such a tax. “The challenge lies in how we do it and when do we do it.” Speaking during a power panel discussion at the recent annual Conference of the Road Freight Association, Nel said it was time the country realised that policy coherence was essential. Economist Mike Schussler believes that instead of trying to implement yet another tax, South Africa should look at the small things they can change to allow the country to compete more effectively internationally. Prudence of proposed carbon tax under scrutiny