Carbon tax to lower emissions: The likely impact of carbon emissions tax on households in South Africa
| Jurisdiction | South Africa |
| Author | Siweya, N. |
| Pages | 211-227 |
| Published date | 16 February 2021 |
| DOI | https://doi.org/10.47348/AMTJ/2021/i1a12 |
| Date | 16 February 2021 |
211
CARBON TAX TO LOWER EMISSIONS: THE LIKELY IMPACT
OF CARBON EMISSIONS TAX ON HOUSEHOLDS IN SOUTH
AFRICA
LA TAXE CARBONE POUR LA REDUCTION DES EMISSIONS:
L'IMPACT PROBABLE DE LA TAXE SUR LES EMISSIONS DE
CARBONE SUR LES MÉNAGES EN AFRIQUE DU SUD
IMPOSTO DE CARBONO PARA MENORES EMISSÕES:
O PROVÁVEL IMPACTO DO IMPOSTO DE EMISSÕES DE
CARBONO NAS FAMÍLIAS NA ÁFRICA DO SUL
Nkhensani Siweya*
JEL Classification: E62, F42, H20, H23, Q28, Q43
https://doi.org/10.47348/AMTJ/2021/i1a12
ABSTRACT
The South Af rican government, along w ith other count ries, has sign ed the Paris
Agreement to com mit to lowerin g carbon dioxid e emissions. This has led to the
introduction of c arbon tax in dif ferent countries to comba t global warming. T he
Mexican gove rnment was the first to introdu ce carbon ta x amongst the emer ging
economies ba ck in 2014, while the Argenti ne government implement ed carbon tax in
January 2018. The S outh Africa n government followed suite and int roduced carbon
tax effec tive 5 June 2019. Households are e xpected, howe ver, to be weighed dow n
by the levy as t he carbon fuel levy will be i mplemented at 9 and 10 cents per litr e on
petrol and diesel re spectively. The impact on strained ho useholds’ income is expected
to emanate fro m the already high fuel prices, which have been on a ri sing trajector y
since the begin ning of 2019.
Keywords: carbon, emissions, households, tax
RÉSUMÉ
s’engager à réduire les émi ssions de dioxyde de carbon e. Cela a conduit à l’introduction
d’une taxe carbon e dans différents pays po ur lutter contre le récha uffement climatiqu e.
Le gouvern ement mexic ain a été le premie r à introduire la taxe c arbone parmi les
économies ém ergentes en 2014, tandis que le gouverne ment argentin a ré cemment
mis en œuvre un e taxe carbon e à compter de janv ier 2018. Le gouvern ement sud-
africain a fa it de même et introduit une taxe sur le car bone qui est entrée en vigueur
le 5 juin 2019. On s’attend à ce que la taxe pèse su r les ménages, pu isque la taxe
sur le carburant c arbonique se ra appliquée à 9 et 10 centim es par litre d’essence et
de diesel respec tivement. L’impact sur le revenu à r ude épreuve de s ménages dev rait
* Functional Analyst: Economist, South African Revenue Service (SARS): nsiweya@sars.gov.za.
(2021) 1 AMTJ 211
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212 AFRICAN MULTIDISCIPLINARY TAX JOURNAL
provenir des pr ix déjà élevés du carburant, qui son t sur une trajectoir e ascendante
depuis le début d e 2019.
Mots-clé s: carbone, émissions, ménages, taxe
ABSTRATO
O governo sul- africano assino u o Acordo de Paris, juntamen te com outros países, para
se compromete r a reduzir as emissões de dióxido de carbo no. Isto levou à introd ução
do imposto sobre o car bono em diferent es países para co mbater o aquecimento global.
O governo mex icano foi o prim eiro a introduzir o imposto sobre o carbono entre
as economias emergentes em 2014, enquanto o governo argentino implementou
recentemen te o imposto sobre o car bono a partir de Ja neiro de 2018. O governo sul-
african o também acompanhou e introduziu o i mposto sobre o carbono, que entrou em
vigor a partir de 5 d e Junho de 2019. Prevê-se que os agregados familiares seja m
abrangidos pela ta xa, uma vez que a taxa sobre os combustí veis de carbono deverá ser
aplicada a 9 e 10 cêntim os por litro na gasolina e no gasóleo, re spectivamente. Espera -
se que o impacto no re ndimento das fa mílias já em dif iculdades se agra ve devido aos
elevados preços dos combustíveis, que t êm estado numa traje ctória asc endente desde
o início de 2019.
Palavra s-chave: carbono, emissõe s, agregados familiares, impostos
I INTRODUCTION
The world is facin g global warmi ng, which is considered the bigg est risk
facing humankind yet. It is caused by air pollution, the burning of fossil
fuels and littering. Parryet a l (2017) found that there was an increase
in mortality rates due to air pollution in 2010, with Chi na, Poland
and Egypt having the h ighest mortalit y rates. Amongst these countries,
China has the highest average level of pollution concent ration. The
high outdoor air pollution in China is on the back of coal that is used
as a source of energy. South Africa wa s among the lowest along with
Brazil, Chile and Australia. Althoug h it was the lowest, the country
needs to take action now and take charge of the situation before it
worsens. The mortality rate in South A frica is below 100 per million
compared to China where it exceeds 900 deaths per m ill ion people
(Parr y et al, 2017).
Globally, several countries united to combat pollution across the
world and in their respective countr ies. The United Nations indicated
that in ‘December 2015, members of the United Nat ions Framework
Convention on Climate Change’ reached an agreement to sustain lower
carbon emissions through different instr uments. Since the adoption
in 2015, 197 countries had signed the agreement in November 2019.
According to Pearce (1990), carbon tax and tradeable carbon emission
permits are required to reduce emission. The BP Statistical Review
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