Economists sound warning over carbon tax

Mail and Guardian 15 August 2012.

Economists have warned that carbon pricing will damage South Africa’s economic growth and global competitiveness.

South Africa’s high dependency on fossil fuel-powered energy has earned it a place among the top 20 carbon emitting countries in the world. In this year’s Budget Speech, Pravin Gordhan announced the implementation of a carbon tax for 2013-2014. A draft policy is being drawn up for public comment.

Carbon pricing was the topic under panel discussion at the Mail & Guardian’s Critical Thinking Forum on Tuesday, hosted by the M&G and BHP Billiton.

Panellists drew a direct link between a carbon tax and rising electricity costs…

(Editorial note. Not sure where the “carbon tax will increase electricity price by 20%”comes from. Eskom’s Grid Emission Factor is about 1 tonne CO2 per MWh at present. So if the carbon tax was R100/tonne CO2, the price of electricity would increase by R100/MWh or R0.10/kWh or about 10% of average domestic tariffs. In practice it would be less because of the rebates the energy intensive industries will be getting.)