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THE SMART NEWS SOURCE | Feb 10 2010 10:59 | LAST UPDATED Feb 10 2010 10:59
Business | Economy

Greening the budget

FARANAAZ PARKER - Feb 11 2009 00:00
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Greenies should approve Manuel's environmental fiscal reforms, which include incentives for efficient energy use and clean development projects.

The Budget Review notes that with South Africa's greenhouse gas emissions ranking in the top 20 in the world, and the country responsible for almost half of Africa's emissions, the issue deserves a domestic policy response.

"We propose taking further steps to encourage energy efficiency and reduce harmful emissions, some of which have tax implications," said the minister.

These steps include:
  • Tax incentives encouraging investment in energy-efficient equipment;

  • Tax exemptions for primary emission reduction credits
  • ;
  • An adjustment to excise duties on motor vehicles to account for carbon emissions; and

  • An increase in the international air passenger departure tax.
  • In addition, the levy on plastic bags increases from three cents to four cents per bag and incandescent light bulbs will incur an environmental levy of R3 per bulb at the manufacturing level and on imports. The plastic-bag levy is expected to generate R15-million in budget revenue while the incandescent light bulb levy generates an additional R20-million.

    A price on efficiency
    To support investment in energy-efficient equipment, the budget proposes the use of market-based instruments. Existing legislation allows for a "three year 50:30:20 percent accelerated depreciation allowance for investments in renewable energy and biofuels production". For companies that can provide certified documentary proof of resulting energy efficiencies, the budget proposes an additional allowance of up to 15%.

    "It is important, furthermore, that we should encourage South African companies to take advantage of the clean development mechanism established in the Kyoto Protocol," Manuel said. This mechanism allows for the issuing of certified emission reductions (CERs) in recognition of progress made in reducing greenhouse gas emissions.

    To encourage private-sector uptake of the clean development mechanism, the budget proposes that income derived from the disposal of primary CERs be tax exempt or subject to capital gains tax rather than income tax.

    Policy measures in the transport sector are aimed at promoting fuel efficiency, limiting the number of vehicles on the road and encouraging the use of public transport, the Budget Review states. Complementing this is an increase in taxes on petrol and diesel, which will rise by 40,5 cents and 41,5 cents per litre respectively.

    To encourage improvements in fuel efficiency, existing ad valorem excise duties on motor vehicles will include CO2 emissions as an environmental criteria as of March 1 2010.

    CONTINUES BELOW


    From October 1 2009, international air passenger departure taxes will increase from R120 to R150 per passenger on international flights and from R60 to R80 on flights to South African Customs Union member states. Presumably, this is meant to offset the carbon footprint associated with flight.
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    The normally sober and well-judged Treasury Department has made some decisions that rely almost wholly on political propaganda, and not on economics or science.

    And, these will be costly and harmful steps.

    Despite the reports of the IPCC, and the propaganda put out by Mr Gore, it has NOT been scientifically shown that CO2 is causing increases in temperature to any degree that is harmful to mankind.

    And even if it were true, there is no attempt to demonstrate what actual effect or benefit could arise from the proposed tax measures.

    We do not need more expensive cars - this harms our economy, and the costs added create no benefit for the environment. We do not need to throw away tax revenue on a system of carbon credits that is so open to fraud and manipulation as to make arms dealing seem angelic by comparison. And while there may be merit in raising the prices of energy-inefficient bulbs (for reasons unrelated to carbon), why is there no corresponding subsidy of energy-efficient bulbs?

    Let's hear the evidence cited before costlyy and damaging taxes are imposed. Or, are these just convenient ways to squeeze money from an unsuspecting puiblic?
    Mike Atkins on February 12, 2009, 6:04 am
    @ Mike Atkins.

    The IPCC, which has concluded that human beings are pumping damaging amounts of carbon dioxide into the atmosphere, represents some of the very finest scientific minds on the planet, and the overwhelming consensus of the world's climatologists.

    Even without their conclusion, common sense suggests that if you take very large amounts of something that's been underground for milennia (carbon in the form of fossil fuels) and start adding it in large quantities to the atmosphere, there are going to be consequences.

    You, however, are telling us that despite the evidence produced in extraordinary detail by the IPCC, there is "no scientific proof" for climate change. Just what would constitute scientific proof, then, in your books, if anything?

    We do know that Exxon and other oil companies, just like the tobacco companies, have spent extraordinary amounts of money producing pseudo-scientific propaganda to try to confuse the public.

    http://www.greenpeace.org/usa/campaigns/global-warming-and-energy/exxon-secrets

    It would seem that either you're an Exxon troll, or you've allowed yourself to be duped by those who are.
    David Le Page on February 14, 2009, 12:50 am
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