South Africa

SA business groups say new carbon tax rollout is unaffordable

South African business organizations have asked the government to slow its plans to boost carbon taxes, arguing the planned charges are unaffordable.

The groups representing the biggest energy and mining companies in the world’s 13th-biggest emitter of climate-warming gases have asked the government to keep carbon tax increases to two percentage points above inflation every year until at least 2030.

Currently, the government plans to end a range of exemptions by the end of 2025 and boost carbon taxes to $20 a ton of carbon dioxide equivalent by 2026 and $30 by 2030.

“The South African economy cannot accommodate the steepness of the carbon tax rate increase in the proposed short period of time,” the groups said in a statement released on Tuesday.

“This is compounded by the slow recovery from the devastating impacts of Covid-19 and an economic downturn, which has resulted in the closure of businesses, job losses and the exacerbation of poverty.”

The groups, including Business Unity South Africa and the top energy and mining lobbies, also asked the government to push back a considerably higher carbon tax until after 2035.

Such delays would undermine South Africa’s adoption of a significantly lower carbon emission target ahead of last year’s COP26 climate conference and its ambition to reach net-zero status by 2050.

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