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South Africa needs choice before carbon tax – city official

30 April 2015   (0 Comments)
Posted by: Authors: Rene Vollgraaff and Tshepiso Mokhema
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Authors: Rene Vollgraaff and Tshepiso Mokhema 

The Davis Tax Committee is reviewing the scope and design of the proposed carbon tax.

South Africa isn’t ready for the start of a carbon tax because there are insufficient alternatives to fossil-fuel energy, according to an official at the City of Tshwane, an area that includes the capital, Pretoria.

"Ninety-five percent of our energy requirement is still very much fossil fuel-based,” Dorah Nteo, the chief sustainability specialist for the municipality, said in a presentation at Bloomberg’s office in Johannesburg on Tuesday. "We have not allowed the infiltration of enough renewable” power sources, she said.

A proposed carbon tax would be delayed from this year to 2016 to allow time for public consultation and the drafting of legislation, former Finance Minister Pravin Gordhan said in 2014. Draft legislation on the levy will be published later this year, his successor, Nhlanhla Nene, said in his February budget.

Eskom, the state-owned utility that provides most of the nation’s electricity and relies on coal for 80% of its generation, is struggling to meet demand with aging plants following years of underinvestment. While the Department of Energy has approved 79 renewable power projects from private companies with a capacity of 5 243 megawatts, Eskom is building two coal-fired power plants with a potential combined output of 9 564 megawatts.

The Davis Tax Committee, which was appointed by Gordhan in 2013 to evaluate the South African tax system, is reviewing the scope and design of the proposed carbon tax.

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This article first appeared on moneyweb.co.za.


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