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Johannesburg - Government’s plans for a carbon tax could cause huge damage to tourism and the aviation industry.
Giovanni Bisignani, chief executive of the International Air Transport Association (Iata), sent an open letter to Finance Minister Pravin Gordhan in which he asked Gordhan to reject a planned proposal for a new carbon tax in South Africa.
Bisignani, who represents airlines responsible for 94% of global air traffic, said a carbon tax would seriously harm South Africa’s competitiveness – both as a tourist destination and potential investment destination.
In addition, the air transport industry in South Africa and its associated industries would suffer serious damage. All that carbon taxes do is to significantly increase transport costs with little or no benefit to the environment, he said.
Bisignani pointed out that South Africa’s geographic location makes it a high carbon dioxide emission destination.
South Africa depends on long-distance air transport to stay in contact with the rest of the world, he said. Its tourism industry has grown by 6% a year since 1994 and it makes an 8.2% contribution to the country’s gross domestic product.
To tax air transport further could very seriously impair the benefits from tourism. The resultant damage could be much worse than the corresponding potential benefit offered by the tax, he said.
Last month Treasury announced it was working on plans for the carbon tax. The details are expected to be announced in the 2012 budget address.
The original discussion document, entitled Reducing Greenhouse Gas Emissions: The Carbon Tax Option, was first presented to the public in December 2010.
One of the recommendations is for Treasury to be able to introduce a tax of up to R75 per tonne on carbon dioxide emissions.
Gordhan said initiatives to reduce greenhouse gas would not only combat the dangers of global warming but also offer great potential in terms of job creation and the reduction of costs in our economy.
But the feeling is that government is under pressure to keep its promises to combat climate change.
At the United Nations Convention on Climate Change in Denmark in 2009 South Africa had, for instance, offered to cut its greenhouse gas emissions by 34% by 2020. The new tax may be one way government hopes to achieve this.
A tax on carbon dioxide emissions could however have a larger, direct impact on the consumer.
Eskom, which mainly uses coal to generate electricity, is a huge emitter of carbon dioxide and could be heavily taxed under a new tax system. This could hike electricity prices considerably.
Meanwhile, Bisignani claimed the international airline industry was doing more than its share to combat greenhouse gas emissions.
He said an agreement had already been reached in terms of which the industry would release 1.5% less greenhouse gas a year until 2020.
A decision has also been taken to ensure that net greenhouse gas emissions by the industry will not increase after 2020.
Thirdly, a target has also been set to reduce the industry’s total net carbon dioxide emissions to 50% of the 2005 level by 2050.
- Sake24
For business news in Afrikaans, go to Sake24.com.
Giovanni Bisignani, chief executive of the International Air Transport Association (Iata), sent an open letter to Finance Minister Pravin Gordhan in which he asked Gordhan to reject a planned proposal for a new carbon tax in South Africa.
Bisignani, who represents airlines responsible for 94% of global air traffic, said a carbon tax would seriously harm South Africa’s competitiveness – both as a tourist destination and potential investment destination.
In addition, the air transport industry in South Africa and its associated industries would suffer serious damage. All that carbon taxes do is to significantly increase transport costs with little or no benefit to the environment, he said.
Bisignani pointed out that South Africa’s geographic location makes it a high carbon dioxide emission destination.
South Africa depends on long-distance air transport to stay in contact with the rest of the world, he said. Its tourism industry has grown by 6% a year since 1994 and it makes an 8.2% contribution to the country’s gross domestic product.
To tax air transport further could very seriously impair the benefits from tourism. The resultant damage could be much worse than the corresponding potential benefit offered by the tax, he said.
Last month Treasury announced it was working on plans for the carbon tax. The details are expected to be announced in the 2012 budget address.
The original discussion document, entitled Reducing Greenhouse Gas Emissions: The Carbon Tax Option, was first presented to the public in December 2010.
One of the recommendations is for Treasury to be able to introduce a tax of up to R75 per tonne on carbon dioxide emissions.
Gordhan said initiatives to reduce greenhouse gas would not only combat the dangers of global warming but also offer great potential in terms of job creation and the reduction of costs in our economy.
But the feeling is that government is under pressure to keep its promises to combat climate change.
At the United Nations Convention on Climate Change in Denmark in 2009 South Africa had, for instance, offered to cut its greenhouse gas emissions by 34% by 2020. The new tax may be one way government hopes to achieve this.
A tax on carbon dioxide emissions could however have a larger, direct impact on the consumer.
Eskom, which mainly uses coal to generate electricity, is a huge emitter of carbon dioxide and could be heavily taxed under a new tax system. This could hike electricity prices considerably.
Meanwhile, Bisignani claimed the international airline industry was doing more than its share to combat greenhouse gas emissions.
He said an agreement had already been reached in terms of which the industry would release 1.5% less greenhouse gas a year until 2020.
A decision has also been taken to ensure that net greenhouse gas emissions by the industry will not increase after 2020.
Thirdly, a target has also been set to reduce the industry’s total net carbon dioxide emissions to 50% of the 2005 level by 2050.
- Sake24
For business news in Afrikaans, go to Sake24.com.
