How will the Carbon Tax affect mobility in S.Africa?
It is a new year filled with promise and new opportunities to address our rising climate challenges! Having spent the holiday at my rural village in the Eastern Cape, South Africa has made me realise how much climate change is impacting our local communities from food production to transportation. However the biggest observation has been on how people move between the various cities and towns in response to these new realities of persistent drought and extreme weather patterns. This is probably the driest Christmas I have ever experienced at home since I was a child. Even though the people that live in my village have done little to contribute towards these rising climate challenges they will be the first ones to be impacted by them (as I have already observed this first hand during my holiday).
As a wake up call to these new realities the South African government is introducing a new legislation in response to the rapid climate risks that have heightened by the large emitters of green houses gases (GHGs) — the Carbon Tax becomes effective on the 1 June 2019. This is also a follow up in response to a commitment that was made by the country in 2016 as part of the global agreement on climate change that was decided in Paris in December of that year. In terms of that agreement, SA made commitments — one of which is to reduce greenhouse gas emissions up to 42% by 2025.
The carbon tax act states that any person — a partnership, trust, community, municipal entity or public listed entity — who conducts an activity which results in the emission of greenhouse gases above the allowed threshold will have to pay the carbon tax. The tax is an addition to corporate tax, but only applies to companies which undertake an activity which exceeds the threshold of carbon emissions allowed for that activity.
The good news is that the Carbon Tax comes at a time where there has been some positive strides being made towards a low carbon economy by the early adopters who are now fully entrenched in their green business journeys and the carbon tax should not punish these persons and entities as they are already pursuing a low carbon pathway.
While some of us still enjoy the simple pleasures of walkable and cyclable cities, greener mobility technologies are increasingly playing a vital role in improving people’s movement across cities and towns. Electric vehicles (EVs) and hybrids are expected to be an integral part of the future of transport and energy in the green built environment — specifically with the deployment of charging stations in residential, commercial and retail developments — which may offer vehicle-to-grid (V2G) virtual storage for renewable energy. Today, electric vehicle batteries store incredible amounts of energy that can be discharged quickly, safely, and smoothly — giving electric vehicles (EVs) instant acceleration, responsive handling, and fast recharging times.
The rising demand for batteries for EVs is also driving their price down and this promises to result in a market for repurposed EV batteries for use in the storage of solar energy in buildings.
A growing trend is the increasing consumer awareness towards the negative effects of pollution that is caused by traditional transportation system such as internal combustion engines (ICEs).
Carbon emissions are calculated according to the amount of carbon content that is in a liter of petrol or diesel divided by the vehicle’s fuel economy.
The only bad news will be faced by those that have been slow to respond to the realities of climate change and these entities have historically been the largest emitters of GHGs. The bill sets the tax at R120 per ton of carbon dioxide which is just over $8.50 per ton of carbon dioxide.
In fact, cities around the world, especially in Europe, have begun to shun ICEs in favour of boosting air quality for residents. It anticipated that South Africa will follow in this low carbon pathway as it been laden out in South Africa’s Green Transport Strategy that was launched in November 2018.
What implication does this knowledge trend for the automotive industry? For starters it has awakened this industry to the growing consumer needs for cleaner and greener transport. A recent study that was done by Deloitte has highlighted that the majority (55%) of SA consumers are still looking to traditional Original Equipment Manufacturers (OEMs)for answers to boost air quality for city residents. Major OEM are joining the green revolution and South Africa is getting ready to embrace this revolution.
There are quite a few Electric Vehicles (EVs) that are already in South Africa — these include the BMW i3, Nissan Leaf, Jaguar I -Pace, Audi e-tron. Current charging infrastructure is growing, but stations are few and far between, and mostly situated in large cities however with more electric vehicles being introduces this should stimulate a demand for charging stations as well. The other challenges has been the high costs that are associated with these electric vehicles.
One major insight has been that the growing interest towards hybrid cars has been driven by the rising cost of fuel and growing aversion to petrol and diesel engines. OEMs such as Toyota are already entrenched in the hybrid market already having the largest market share globally, with the hybrids proving to me more popular in the US, Europe and Asian markets currently.
With the rising costs of fuel combined with the impeding carbon tax the business case for mobility switch has become made stronger by these recent policy and economic developments.
However Greener modes of Transport never a green city make which is why these early adopters need to balance these good deeds in other effective areas namely: extreme energy efficiency supported by gradual phasing in of small-scale renewable energy in their areas of operation, water efficiency through the effective use of water tanks in office buildings and assembly plants, etc. Understandably there is a capital cost involved in this however there is policy support for energy efficiency and demand side projects, which can alleviate the implementation costs associated with adopting energy efficiency and demand side interventions.
An example of the support energy efficiency has in policy is the potential extension of the Section 12L energy efficiency tax incentive in South Africa and the Energy Efficiency and Demand Side Management (EEDSM) program also implemented in South Africa.
Green Cafés in Support of Green Mobility
The Green Building Design Group team is planning a host of Green Cafés that aim to shift the thinking in society through its interaction with green mobility. Why Mobility? Well mobility connects us all to — our places of work, to the food we consume and for most of us our families in distant locations.
Please send us a mail if you are interested in participating in these in 2019. These will take place throughout Southern Africa!
Green Building Design Group (GreenBDG) is the partner of choice in the creation of an adaptive and inclusive green economy in Africa. We create an adaptive and inclusive green economy in the following ways: Thought Leadership dialogue on transforming the green economy with over 40 years combined team experience Driving and Influencing Policy Implementation through direct access to the construction regulatory bodies, provincial and municipal governments Structured Mentorship of industry participants through combined training and capacity building programmes directly aimed at industry participants namely via the following engagements: Green Cafés + Net Zero Hackathon + Energy and Water Performance Certificates 2. Energy + Water Efficiency Buildings standards programmes 3. Green Economy Monitoring & Evaluation assessments 4. Climate Change Adaptation programmes
Website: https://www.greenbdg.co.za/
Contact me on: songo@greenbdg.co.za
