Cyril Ramaphosa signs Carbon Tax Act to reduce greenhouse emission, fight climate change

President of South Africa, Cyril Ramaphosa has recently inked into an agreement of the Carbon Tax Act as a fresh bid to combat climate change.

The Carbon Tax Act, which comes into effect from June 1, 2019, is designed to reduce greenhouse gas emissions in a sustainable, cost-effective and affordable manner, according to the National Treasury. The Act gives effect to the polluter-pays-principle for large emitters and helps to ensure that firms and consumers take the negative adverse costs into account in their future production, consumption and investment decisions, according to the Treasury, as reported by Xinhua.

Under the Act, firms are incentivized toward adopting cleaner technologies over the next decade and beyond. The carbon tax will initially only apply to scope 1 emitters in the first phase. The first phase will be from June 1, 2019 to December 31, 2022, and the second phase from 2023 to 2030.

The design of the carbon tax also offers significant tax-free emission allowances ranging from 60 to 95 percent in the first phase. The country has been criticized for its over-dependence on coal.

A review of the impact of the tax will be conducted before the second phase, after at least three years of implementation of the tax, and will take into account the progress made to reduce GHG emissions in line with South Africa's Nationally Determined Contributions commitments. "Climate change represents one of the biggest challenges facing humankind," the Treasury said, Xinhua noted.

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