The role of tax instruments in reducing emissions from electricity generation in selected developing countries : a comparative study

Dippenaar, Mareli (2014-12)

Thesis (MAcc)--Stellenbosch University, 2014.

Thesis

ENGLISH ABSTRACT: There is not a single country in the world that remains unaffected by climate change, caused, inter alia, by the emission of greenhouse gases (emissions). Urgent change is therefore needed and government intervention is necessary. There are many different government approaches and instruments that can be used to reduce the emissions from electricity generation and frequently a combination of instruments will be most effective. One such measure is tax instruments. The effective use of tax instruments could stimulate investment in renewable energy, energy efficiency or research and development relating to these fields and could indirectly contribute to the reduction of emissions associated with electricity generated from coal and other non-renewable sources. A comparison is drawn across selected developing countries (South Africa, Brazil, China and India) that face similar climate change challenges to determine the primary focus of the countries in applying tax instruments to reduce their emissions from electricity generation (i.e. supply or demand; incentives or disincentives; direct or indirect taxes; and renewable energy, energy efficiency or research and development). The comparison also serves to determine whether the South African government’s use of tax instruments is in line with that of the comparative countries. It was found that the tax instruments in South Africa and India focus almost equally on the supply and demand of electricity, while the tax instruments in China focus on the demand side and those in Brazil place slightly more emphasis on the supply side. The primary focus in all the countries studied appears to be the use of incentives, rather than disincentives. The focus of their tax incentives appears to fall equally on the use of direct and indirect taxes, with the exception of South Africa, where hardly any indirect tax incentives are used. Furthermore, there seems to be an almost equal focus on renewable energy, energy efficiency and research and development in the countries studied, with the exception of China, where the number of tax instruments specifically aimed at energy efficiency significantly exceeds the number of instruments specifically aimed at renewable energy and research and development. Based on the findings, Brazil does not use tax instruments to target energy efficiency. A number of tax instruments were identified which the South African government could also consider in an attempt to contribute to the reduction of emissions from electricity generation.

AFRIKAANSE OPSOMMING: Daar is nie ʼn enkele land in die wêreld wat onaangeraak is deur klimaatsverandering, wat, onder andere, deur die vrystelling van kweekhuisgasse (vrystellings) veroorsaak word, nie. Dringende verandering is dus nodig en staatsingryping word genoodsaak. Daar is heelwat verskillende benaderings en instrumente wat die staat kan aanwend om die vrystellings wat deur elektrisiteitsopwekking veroorsaak word, te verminder en dikwels sal ʼn kombinasie van instrumente die effektiefste wees. Een so ʼn maatreël is belastinginstrumente. Die effektiewe gebruik van belastinginstrumente kan investering in hernubare energie, energiedoeltreffendheid of navorsing en ontwikkeling met betrekking tot hierdie velde stimuleer en kan indirek bydra tot die vermindering van vrystellings wat met die opwekking van elektrisiteit uit steenkool en ander nie-hernubare bronne verband hou. ʼn Vergelyking word getref tussen uitgesoekte ontwikkelende lande (Suid-Afrika, Brasilië, China en Indië) wat aan soortgelyke klimaatsverandering-uitdagings blootgestel is, om te bepaal waar die lande se primêre fokus in die toepassing van belastinginstrumente om vrystellings uit die opwekking van elektrisiteit te verminder, lê (d.w.s. vraag of aanbod; aansporings of ontmoedigings; direkte of indirekte belastings; en hernubare energie, energiedoeltreffendheid of navorsing en ontwikkeling). Die vergelyking word ook getref om te bepaal of die Suid-Afrikaanse regering se gebruik van belastinginstrumente in lyn is met dié van die vergelykende lande. Dit is bevind dat die belastinginstrumente in Suid-Afrika en Indië feitlik eweveel fokus plaas op die vraag en aanbod van elektrisiteit, terwyl die belastinginstrumente in China op die vraag-kant fokus en dié in Brasilië effens meer klem op die aanbod-kant plaas. Die primêre fokus in al die lande wat bestudeer is blyk die gebruik van aansporings, eerder as ontmoedigings, te wees. Die fokus van hul belastingaansporings blyk eweveel op die gebruik van direkte en indirekte belastings te wees, met die uitsondering van Suid-Afrika waar daar feitlik geen indirekte belastingaansporings gebruik word nie. Daarbenewens blyk daar feitlik eweveel fokus op hernubare energie, energiedoeltreffendheid en navorsing en ontwikkeling in die lande wat bestudeer is te wees, met die uitsondering van China waar die getal belastinginstrumente wat spesifiek op energiedoeltreffendheid gemik is, die getal instrumente wat spesifiek op hernubare energie en navorsing en ontwikkeling gemik is, beduidend oorskry. Gebaseer op die bevindings, gebruik Brasilië geen belastinginstrumente om energiedoeltreffendheid te teiken nie. Daar is ʼn aantal belastinginstrumente geïdentifiseer wat die Suid-Afrikaanse regering ook kan oorweeg in ʼn poging om by te dra tot die vermindering van vrystellings uit die opwekking van elektrisiteit.

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