Electricity
Tuesday, 03 April 2012 10:18

Carbon tax, electricity pricing: budget announcements

Minister Pravin Gordhan’s budget speech earlier this year emphasized that South Africa should move towards a low-carbon economy. The WWF looked at the budget and is excited about the new green prospects of growth that was included in the speech.

WWF South Africa (WWF-SA) welcomes the fact that Finance Minister Pravin Gordhan’s budget speech continued to reinforce the need for South Africa to find ways to deal with carbon emissions. Minister Gordhan also stressed that the country has to diversify its approaches to dealing with energy constraints, but calls for greater urgency in moving to a low-carbon and sustainable economy.

“Although we don’t have clarity on how carbon taxes will be implemented, we welcome the explicit acknowledgement of the need to price carbon emissions and the phasing in of a tax instrument for this purpose,” says Saliem Fakier, Head of the WWF’s Living Planet Unit.

Staying on top of the markets

“We recognise the need for a carbon tax that is sensitive to South Africa’s socio-economic context, individual tax payers and sustainable growth of the economy. Carbon pricing affects everybody, but carbon emissions are being priced and incorporated into business increasingly. Internationally there is a growing trend to penalise the carbon intensity of products and services,” she says. “We need to start reducing our carbon intensity so that South African goods remain competitive,” says Fakier.

Minister Gordhan also made provision for an incremental increase in the levy for electricity generated from non-renewable energy. The WWF believes that this is a step forward to make people more aware of the need for energy saving. The organisation is excited about the explicit commitment of the government this year to allocate portions of this revenue towards promoting household energy saving and the continued roll-out of a million solar water geysers.

carbon tax_electricity_pricing

Taking renewable energy forward

The WWF also welcomed the continued commitment towards the scaling up of renewable energy infrastructure. “We believe that both in the interim and long term renewable energy allows greater flexibility in our energy mix and ability to meet the growing demand,” adds Fakier. “This approach also stimulates green economy growth.” She says the WWF is willing to work with the government in ensuring that the delivery of renewable energy is cost-effective. “We believe this plan can continue to build the country’s energy security and support the green jobs target.”

The organisation recommends that the government considers the deployment of public works programmes that not only create jobs, but also improves and enhances affordable energy solutions and access in poor rural and urban communities. “We are disappointed that this has not received sufficient emphasis despite the increased allocation of funds for other community job creation programmes,” says Fakier.

She believes South Africa needs to have a shared vision to work together in finding ways to reduce our dependency on fossil fuels. “We accept that this cannot be done immediately, but we would like to see continued provisions through greater annual budget and public sector spending towards achieving this vision.”

WWF-SA further welcomes commitment to invest in wastewater treatment plants in certain areas. “More than half of South Africa’s wastewater treatment plants operated by local government are failing their own discharge standards and polluting rivers and estuaries,” she says. “Initiatives such as the wastewater treatment plants should become a national priority.”

Fakier says the WWF welcomes the additional allocation of funds to the Department of Agriculture, Forestry and Fisheries to improve agricultural support services. “This is a positive step in supporting compliance and best management practices in the country’s agricultural industry.”

She concludes that the WWF is excited about the government’s investment in Working for Water and Working on Fire, which promotes the health of the country’s ecological systems and alleviates poverty through job creation, particularly for local communities.

Full acknowledgement and thanks are given to the WWF for the information given to write this article.