The South African government has proposed a carbon tax to reduce the country's greenhouse gas (GHG) emissions. If implemented, the tax would come into force in 2015, and apply to direct GHG emissions resulting from fuel combustion, gasification and other industrial processes. The government aims to reduce GHG emissions by 34 percent by 2020 and 42 percent by 2025, below the business-as-usual trajectory, subject to the provision of adequate financial, technological and capacity-building support by developed countries.
The proposed tax rate is R120 per ton of carbon dioxide equivalent initially, increasing 10 percent every year until 2019. However certain sectors will be entirely exempt, and others will benefit from a tax free threshold ranging from 60 to 85 percent. There has been strong pushback to the tax from business and opposition parties, who consider a carbon tax inappropriate given South Africa's monopolistic energy sector and currently weak economy. In May 2013, the National Treasury published a Carbon Tax Policy Paper for public comment, and is currently considering responses. If the policy proceeds, the next step will involve publishing draft legislation.