At a time when government should be doing “everything possible” to stimulate the South African economy, it would be “terribly ill-advised” to burden the economy further by introducing a carbon tax, Steel and Engineering Industries Federation of Southern Africa (Seifsa) CEO Kaizer Nyatsumba said this week.

Commenting on a joint statement by the departments of Environmental Affairs and Trade and Industry that they were finalising an approach to carbon tax, Nyatsumba said the State appeared more concerned about “squeezing” the economy to generate more tax income than it was about its underperformance and the growing “army” of the unemployed.
He stated that it was inevitable that the introduction of a carbon tax would further stifle the economy and render South Africa even less internationally competitive.

Nyatsumba suggested that South Africa, whose economic outlook had recently been downgraded by ratings agencies and the World Economic Forum, needed to follow the example set by Australia earlier this year, when it repealed its carbon taxes.

“Our view is simple: we cannot afford to constrain the economy even further at a time when more jobs need to be created by introducing a carbon tax when far more developed countries such as the US and Australia have not done so,” said Nyatsumba.

While Seifsa encouraged responsible corporate conduct and supported sustainability, the federation remained firmly of the view that there was no reason for South Africa, which contributed less than 1% of global emissions, to take the lead in climate change mitigation by being one of the few countries to introduce a carbon tax.