ISER WEBINAR 2 September 2021 - Will Carbon Tax Policies Reduce Emissions?

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Will Carbon Tax Policies Reduce Emissions?
Will Carbon Tax Policies Reduce Emissions?

A critical stocktaking of recent analyses and policies

The recently released Working Group I report of the Intergovernmental Panel on Climate Change (IPCC), covering recent developments in the physical science of climate change, serves as a stark warning of the environmental dangers humanity faces. The reports of working groups II and III, dealing with action to reduce the harm resulting from climate change, and adapting to a changing climate, will be released in the coming months.
In his recently published ISER working paper, Prof. Martin Gustafsson reviews South Africa's carbon taxes and emission reduction targets aimed at bringing together the knowledge and sources non-specialists such as teachers and journalists may require to understand the complexities around the country's obligations to reduce emissions, and existing policies aimed at achieving this. In the forthcoming ISER Webinar he analyses certain inconsistencies across the various policies and considers the way forward.
 The abstract is below, and the full paper can be read here: 
Read ISER carbon tax paper


DATE: Thursday 2nd September
TIME: 14h15
Professor Martin Gustafsson  
Associate professor, Research on Socio-Economic Policy (ReSEP) group, Department of Economics, Stellenbosch; Visiting Research Fellow, ISER, Rhodes University, South Africa.

Mr Gray Maguire
Carbon Project Manager at Climate Neutral Group, South Africa; Columnist for Business Day Live.

Professor Cyril Nhlanhla Mbatha  
Director, Institute of Social and Economic Research (ISER), Rhodes University
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Attaining emission reduction targets in the South African context largely means implementing the country’s 2019 Carbon Tax Act, which would cover around 86% of all emissions when fully phased in. This paper aims to provide a critical review of key analyses and policies behind these targets and the likelihood of attaining them. It does this by answering three questions. Firstly, can South Africa’s contribution to global targets be considered fair? Viewed broadly, the current arrangement of national targets is unfair insofar as developing countries are expected to curtail emissions at an early stage of development, in ways developed countries did not. Moreover, national targets set in line with the 2015 Paris Agreement as they currently stand are an injustice to future generations, as they are clearly insufficient if the average surface temperature increase is to be kept within two degrees Celsius. Targets need to become more ambitious. South Africa’s targets are relatively unambitious, and rely in part on the argument that exceptional skills constraints slow down mitigation efforts. Secondly, how do South Africa’s mitigation strategies, and specifically its carbon tax, compare internationally? South Africa’s carbon tax rests on a number of modelling exercises, and has been considered exemplary by global organisations for its comprehensiveness and relative simplicity. Thirdly, how likely is it that South Africa will reach its emissions targets? Modelling indicates this is possible if the carbon tax is implemented as envisaged, and that targets can be achieved without any significant loss of income or jobs. In fact, the tax provides opportunities for a net creation of jobs, and new government revenue streams which could be used to tackle the country’s serious income inequalities. There are, however, some risks. The first two years since the tax was promulgated suggest that more transparency and advocacy are needed. Moreover, an official trajectory for the tax rate in future years, as it is phased in, seems necessary to facilitate planning and investments in the public and private sectors.