South Africa will implement a new carbon tax starting June 1st, becoming one of a small number of nations to require polluters to pay for their emissions. The country’s carbon tax is not particularly onerous in its first phase, with a price of US$8.34 per tonne of CO2 equivalent, and with tax breaks in place that will further reduce that amount in practice. However, it represents a step forward.
Carbon taxes are believed to be an effective economic mechanism for driving companies to reduce their emissions. The UK put in place its carbon price floor in 2013, which set an effective price of carbon at around US$25, the country’s emissions began to fall rapidly. To date, 25 countries have put in place carbon taxes, with many more cities and states adding measures.
[Source: World Bank]
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