South Africa has proposed a carbon tax of 120 Rand (about US $13) per tonne of emission of carbon-dioxide equivalent in the second draft of its carbon tax proposal, titled Reducing greenhouse gas emissions and facilitating the transition to a green economy. This follows an earlier announcement made by its finance minister Pravin Gordhan to implement a carbon tax by 2015 during the annual budget speech this year. The national treasury released the report for the second and final round of comments on May 2, which could well be the last step before the policy is drawn up as government draft legislation.
According to the national treasury report, in order to ensure that industries are not negatively impacted, the carbon tax will be applied in a phased manner. For the first five years, from 2015-2019, carbon-intensive sectors such as cement, steel and aluminum, will have to pay a carbon tax of R120 per tonne of CO2e. The tax will increase at the rate of 10 per cent per year during this phase. Owing to the intense lobbying from industry that complained of being disadvantaged by such a tax against those countries which do not price carbon, the treasury has revised the carbon tax rates. In an initial draft, the national treasury suggested taxes ranging from R75/tonne of carbon dioxide emitted to R200/ tonne, depending on the severity. The second draft also proposes providing higher levels of relief to sectors that would be more heavily impacted by the proposed carbon tax (see key features of tax).
