Expert analysis of carbon tax proposal for BUSA
Genesis was appointed by Business Unity South Africa (BUSA) to provide expert analysis and input in a review of the National Treasury’s discussion document regarding the possible implementation of a carbon tax intended to internalise environmental costs and reduce emissions.
Within the context of national targets for the reduction of carbon emissions - and the potential cost implications of these for business - the challenge for all stakeholders at this time is to design policies that are sound but nevertheless appropriate to and optimal for the economy.
The project team’s experience in regulatory policy design, its knowledge of the policy environment, its understanding of the economic incentives of market players, and its grasp of local and international market dynamics was critical in establishing a balanced view that cut through the complexities involved.
The team’s analysis focused on two assumptions. Firstly, the assumption that one cannot design carbon policies without a broader recognition of other environmentally focused policies and planning mechanisms, which also take account of carbon and related issues. Secondly, the assumption that, while administrative simplicity is important when designing a tax, this should not be achieved at the expense of the competitiveness of South Africa industries if this is unnecessary.
Since this process, the carbon tax proposal has been refined and adjusted by the National Treasury, and Genesis has continued to provide input into carbon tax debates.