More tax, please!

If you ask me, the new carbon tax is a sloppy piece of green-wash. It’s a quick way for the government to raise an extra R450 million a year. At best it’s a token gesture that makes us look a little more green-minded when decisions are made about where to hold climate conferences and summits. And then it doesn’t even look like the revenues will necessarily be used for green developments or research.

But don’t get me wrong: I think we definitely need a green tax — and one with a lot more teeth at that. Though market fundamentalists are bound to resist any interference with the market whatsoever, it seems to me that a green tax is the most viable and practical way to increase the opportunity costs of relying on fossil fuels. A green tax, as I envisage it, should take us one step closer to paying the full costs of using petrol and diesel — costs like pollution and carbon emissions, which we aren’t paying for now.

So in place of the carbon tax as it stands, I would argue that a fuel levy would have been a better option. Here’s why.

Ideally a green tax should make people think about their reliance on fossil fuels, and create incentives for them to find alternatives where possible — or even develop them in the long run. It would make people more mindful of their carbon emissions, and create an economic incentive for people to reduce those emissions as best they can.

The problem with the current tax is that it does none of this. Firstly because it is a once-off tax incorporated into the overall price of a new vehicle, it’s likely people will just see the carbon tax as they do any other tax and think no further. True, the more CO2 a car emits, the more that particular car is taxed. But this is paid once-off, and though it may cause consumers to purchase a car that emits less CO2 in the first place, the tax has little effect on their future driving habits: whether they drive the car once a month or all day, every day, the tax remains fixed for that particular vehicle.

A fuel levy on the other hand, would mean that the tax you pay is directly related to the amount of fuel you use: the more you drive, or the less efficient your car, the more you end up paying. The benefit is that a fuel levy creates an economic incentive to use less fuel: those who make the effort and cycle to work, move closer to their offices, or set up a car-pool will pay less tax. Purchasing a fuel-efficient car would mean more than just an initial saving, it would mean that fuel-conscious drivers would continue to save in the long run too.

The current tax achieves none of this because it is levied independently of how much you drive, or how much fuel you actually use. Although the tax does mean you’ll pay a lot more for a big 4X4 (about R19 000), once you’ve paid the tax once, there are no more incentives to encourage you to drive more efficiently. The roads will still be jammed full of cars with only one occupant.

Then there is the issue about how the carbon tax revenues are to be used. According to Jabulani Sikhakhane, the National Treasury spokesperson, the tax will be used “to fund general government priorities including various environmental objectives”. I think this is wrong. If the point of the tax is to change consumer habits, and make the national fleet more energy efficient, then surely the tax money should be channelled into developments that make these changes more feasible. It’s no use penalising people because they drive and use cars when public transport is inefficient and impractical.

I think the point is that the tax should empower people, as crazy as that may sound. With a once-off tax, people have very little influence over how much tax they will fork out. But with a fuel levy consumers would have much more control over how much tax they pay — right from the initial choice of which car to buy, through to how often they drive it, and how efficiently they do so.

It’s about making people more aware of the full costs associated with fossil fuels, many of which we currently aren’t made to pay for. We pollute and emit CO2 every time we drive, and yet these costs are left off the balance sheet, and this remains the case with the carbon tax as it stands today.