SA’s carbon tax is set to be introduced in less than a year. It is to be welcomed but it is still too weak to push the country to a low-carbon transition. SA needs to do more given its international and domestic climate obligations. So, what is the overall and systemic purpose of the carbon tax? It is a way of pricing an environmental externality. It is intended to help achieve the following: lowering carbon intensity through improved energy efficiency or switching to alternative energy; stimulating new growth, new technologies and enterprise; encouraging the development of new product lines, which would stimulate new investments and jobs. The aim of a carbon tax is to disincentivise future carbon-intensive investments. It will also encourage investors to start pricing CO² emissions as a risk in the way they make decisions and capital allocations. Due to the Paris Agreement most countries will probably have a form of carbon pricing by the middle of the next decade. The aviation indu...

BL Premium

This article is reserved for our subscribers.

A subscription helps you enjoy the best of our business content every day along with benefits such as exclusive Financial Times articles, ProfileData financial data, and digital access to the Sunday Times and Sunday Times Daily.

Already subscribed? Simply sign in below.

Questions or problems? Email or call 0860 52 52 00. Got a subscription voucher? Redeem it now