Cabinet Approves Draft Carbon Tax Policy


Cabinet has approved the draft carbon tax policy at its latest meeting in Pretoria.

According to a statement released by government communications, the policy will soon be published for public comment.

Government wants to curb carbon emissions in South Africa.

“The tax policy presents the environmental and economic rationale for carbon tax measures to address climate change”.

It seeks to show the value of carbon taxes to price carbon.

The policy also aims to introduce a price mechanism to influence consumer and producer behaviour.

Three carbon emissions tax options are presented for consideration:

• Direct tax on actual measured emissions
• Fossil fuel input tax-based on carbon content of fuels
• Fossil fuel output tax

In a related matter, cabinet decided to stop the electricity distribution industry restructuring.

It also decided to halt the process of creating the regional electricity distribution (RED) with immediate effect.

The energy department will now take over the programmes that previously fell under the electricity distribution industry holdings (EDIH).

The EDIH had been responsible for setting up the REDs.

“The department will review the whole electricity value chain with a view to developing a holistic approach to revitalise electricity infrastructure, energy security as well as the financial implications”.

An administrator will be appointed to wind up the EDIH.

According to the statement, the EDIH board will remain in place until the end of the current financial year.

Sabinet Cape Town Office

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