Minister Gigaba to line up Eskom for carbon tax

SOE’s in for carbon tax on climate response….

Public enterprises minister Malusi Gigaba, without mentioning carbon tax specifically, has launched a climate change policy framework for state-owned enterprises (SOEs) that seeks to align their climate response with the United Nations Global Compact (UNGC) on carbon emissions.   South Africa is a signatory to the UNGC and to the ten  UNGC principles which include human rights, labour, climate response and anti-corruption.

Principle seven states that business should support a precautionary approach to environmental challenges; principle eight says the signatory will undertake initiatives to promote greater environmental responsibility; and principle nine encourages the development and diffusion of environmentally friendly technologies. Minister Gigaba enumerated these.

The UN’s ten principles we are to follow

The minister said, “The UNGC calls companies everywhere to voluntarily align their operations and strategies with the ten universally accepted principles in areas  which include greenhouse gas emissions”.

The minister’s statement is featured  on SA government’s news site, and quotes the minister as stating , amongst other things, that it was “strategic” for South African business corporations to align their operations with  UNGC and their principles.

In aligning the newly launched policy framework for  state owned enterprises along similar lines, he says government will develop a detailed strategic plan in relation to climate change that includes “green economy considerations in operational decisions”.

The minister referred to four key design principles informing the policy framework, including the need for SOEs to focus on the overlap between commercial, economic, developmental and environmental objectives whilst carefully managing areas where these objectives conflict.

SOEs include…….

It emerged during the debate that certain state-owned enterprises (SOEs) have already endorsed the global compact, which, according to SAnews were, Denel, Transnet, Eskom, SAA, Broadband Infraco, Safcol and SA Express.

This agreement with UNGC appears to be one of the “global agreements which finance minister Pravin Gordhan referred to in his parliamentary budget vote speech when he gave his reasons for proposing a carbon tax, one of these and the main reason being to “change behaviour towards emissions”.     This  is also the keynote point of the recent treasury updated Carbon Tax Policy Paper out for public comment and which follows the much earlier discussion paper of 2010, “Reducing Greenhouse Gas Emissions: The Carbon Tax Option”.

“Recycling” of carbon tax rather

Minister Pravin Gordhan told parliamentarians recently that the “full earmarking” (or ring fencing) of specific tax revenue streams are not in line with sound fiscal management practices.     However, the efficient recycling of revenue, his deputy Cecil Morden said, was if mechanisms for structural adjustment revising greenhouse gas mitigation (GHG) is to be possible.   Morden said, ” A carbon tax will be introduced as part of a package of interventions to ensure that the primary objective of GHG mitigation is achieved”.

Public enterprises minister Malusi Gigaba’s recent speech therefore presumably means that he has every intention of following the minister of finance’s speech in making Eskom pay carbon tax, or as Cecil Morden said, “mechanisms for structural adjustment revising greenhouse gas mitigation”.

 

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