SOUTH AFRICA PUBLISHES MODELLING REPORT FOR A CARBON TAX
The Soouth African National Treasury has published a carbon tax modelling report which provides an assessment of the impacts of the proposed carbon tax policy.
The study was conducted on behalf of National Treasury under the Partnership for Market Readiness initiative administered by the World Bank and which which is aimed at supporting countries to strengthen their policy analysis and technical capacity to implement carbon pricing measures.
“The modelling results suggest that the carbon tax will have a significant impact on reducing South Africa’s greenhouse gas emissions and would lead to an estimated decrease in emissions of 13 per cent to 14.5 per cent by 2025 and of 26 per cent to 33 per cent by 2035, compared with ‘business as usual’,” the Treasury said here Thursday.
According to the Treasury, the carbon tax would make an important contribution towards reaching South Africa’s Nationally Determined Contribution (NDC) commitments under the recently ratified Paris Agreement for emissions to peak in 2020 to 2025, plateau for a 10-year period from 2025 to 2035 and to decline thereafter.
The carbon tax will also ensure that emission reductions are delivered, while sustained economic growth is realised.
The carbon tax is expected to lead to a reduction in the annual average growth rate of the economy by just 0.05 to 0.15 percentage point, compared with business as usual. A sensitivity analysis shows that the carbon tax would have a similar modest impact, even if the economy grew less quickly than expected.
Source: NAM NEWS NETWORK.