National Treasury deputy-director general Dr Ismail Momoniat
Photo by: Creamer Media's Simone Liedtke
Appropriate action to help transition the South African economy onto a low-carbon growth path, as articulated in the National Development Plan, is needed, says National Treasury deputy director-general Dr Ismail Momoniat.
Speaking at a Carbon Tax Colloquium hosted by the South African National Energy Association, on Thursday, he stated that “business as usual” was no longer an option.
Momoniat noted that, in order to operate in a carbon constrained economy over the medium to long term, South Africa’s newly implemented Carbon Tax is, and will continue to be, “an important instrument as part of the broader package of mitigation policy measures” under the National Climate Change Response Policy.
The policy was set out to help South Africa achieve its Nationally Determined Contributions (NDC) in a cost-effective manner and nudge the economy onto a sustainable growth path.
Ratification of the 2015 Paris Agreement only emphasises the realities that countries have to prepare for, Momoniat said.
With the Carbon Tax having been implemented from June 1, he said a review of the impact of the tax would be conducted after at least three years of implementation, taking into account the progress made to reduce greenhouse-gas emissions in line with South Africa’s NDC commitments.
Touching on what industry could expect in the short term, Momoniat said the revised draft regulation on carbon offsets, which was published for further consultation in November 2018, was currently being finalised.
Additionally, the trade exposure regulation, which specifies the allowances for sectors and subsectors, would be published shortly for public comment and finalisation. The emissions intensity benchmark regulation was also expected shortly, he added.
Momoniat further mentioned that, as much as global action would be required – through the likes of the Paris Agreement and the Kyoto Protocol – to deal with climate change, national action “will be critical” in limiting the temperature rise to only 1.5 °C above pre-industrial levels.
In effect, alongside the Carbon Tax and various global agreements, he stated that “steeper reductions in emissions from the energy sector, with increased efforts channelled towards cleaner, renewable energy alternatives, are required”.
While action is urgently needed, Momoniat warned that it should not “come at the expense of economic growth”.
“It is crucial that we scale up our efforts to grow our economy in a manner that decouples economic growth from environmental damage – climate action does not require economic sacrifice.”
With climate change considered by some to be biggest crisis facing humankind, Momoniat averred that the next two to three years were a “critical window” as this was when policy and investment decisions would be taken that would shape action over the next 10 to 15 years.