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National Treasury forges ahead with carbon tax plans

Draft bill published for public comment.

JOHANNESBURG – National Treasury has signaled its intention to forge ahead with the introduction of a controversial carbon tax, with the publication of a draft bill on Monday.

It said however that it has taken the current state of mining and other distressed sectors into account. The combined effect of the exemptions in the carbon tax and the reduction in the electricity levy “will be designed to ensure that such sectors are not adversely affected when the carbon tax is implemented”.

“The tax and revenue recycling measures are also designed to be revenue neutral from a macroeconomic perspective, but will not necessarily be neutral for (scope one) companies with significant emissions.”

A reduction in the electricity level is one of the recycling measures proposed.

The carbon tax will especially affect those that use a lot of energy. During the last two years of the current consultation process, which started in 2010, there have been concerns that the introduction of a carbon tax could cripple those industries that are already struggling with competitiveness issues. Some industry commentators have also been skeptical about the ability of a green tax to change behaviour and said the South African economy – which is built on coal – is not yet in a position to offer the alternative technologies that could facilitate a switch to cleaner energy.

Initial proposals were for the carbon tax to be introduced on January 1 this year, but it was pushed out to 2016 during the 2014 February budget.

“The National Treasury is in the process of finalising Regulations to give effect to the carbon offset scheme and is engaging the Department of Energy (DoE) and the DEA [Department of Environmental Affairs] on the administration aspects of the offset scheme. Draft regulations will be published for public comment in early 2016,” it said on Monday.

The revised carbon tax design proposes a basic 60% tax-free threshold during the first phase of the carbon tax, from the implementation date up to 2020, an additional 10% tax-free allowance for process emissions and an additional tax-free allowance for trade exposed sectors of up to 10% amongst other measures.

Treasury said the combined effect of all the tax-free thresholds will be capped at 95% and an initial marginal carbon tax rate of R120 per ton CO2 emitted will apply. However, if all the tax-free thresholds are taken into account the effective carbon tax rate will vary between R6 and R48 per ton of CO2 emitted.

“These tax-free exemptions will range between 60% and 95% of total emissions. This implies that the carbon tax will be imposed on only 5% to 40% of actual emissions during this period,” it said.

When Treasury published its updated carbon tax policy paper in May 2013 the effective tax rate (after additional relief was taken into account) was between R12 and R48 per ton of CO2 emitted.

The proposed implementation of the carbon tax is part of government’s commitment to reduce greenhouse gas emissions by 34% by 2020 and 42% by 2025. National Treasury said it introduction will ensure that South Africa is ready and better prepared to deal with future climate risks and challenges.

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Don’t be ridiculous. How will the introduction of a carbon tax prepare South Africa for future climate risks and challenges? That statement in itself is dumber than a box of rocks. Is a carbon tax in South Africa going to change the weather? let me tell you this: nothing SA can do can change the climate.

Let me tell you this now: mankind’s usage of hydrocarbons for energy (coal, gas, petroleum products) is generally quite price inelastic. This means the usage is not very price sensitive and increases in price do not decrease usage much. Double the price of fuel and the fold still have to get to work…

Thus to actually make a difference to CO2 emissions (get people to use less), one will have to increase the price of coal, fuel etc by a huge margin not a piddly R12 to R48 per tonne. One would need an order of magnitude or two more.

Therefore one can conclude this has nothing to do with saving the planet and everything to do with leaching more off the already overburdened taxpayer.

What is even more fascinating is that the Global Warming CO2 scare scam is coming apart at the seams faster than a $2 Tee shirt. The models are WRONG. There is no evidence in the geological record that CO2 drives temperature, the upper tropospheric hotspot is missing and the global temperature has been flat for 18 years despite and extra 2ppm per annum CO2. Where is the missing heat that is supposed to do the warming?

Now a brilliant WA physicist/ applied mathematician called David Evans has come up with an explanation why the models are wrong- in essence how the missing heat escapes into space. This is documented in a number of posts on:

http://joannenova.com.au/

David is under all sorts of attacks from the established warmist feeding- at-the- taxpater -trough fraternity but while they question his character, they cannot refute his science.

Have a good read- the truth will set you free.

Well said Richard. There is no direct correlation between excessive amounts of CO2 and global climate change. In fact once you look at the chemistry behind it all, a much stronger relationship can be seen between hydrocarbons and this so called “Global Warming” pandemic. Al Gore made many valuable points in the movie “An Inconvenient Truth”, yes there might be some political motivations behind these, however I feel modern society needs a wake up call. Global Warming is a “Global” concern, how is paying taxes (a monetary solution) going to reduce industrial foot prints? You cant fix an environmental issue by throwing money at it. Carbon Taxes? More like give me more money, so I can sit at my desk/ kraal and laugh at a nation under my thumb…

End of comments.

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