Integration of Carbon Tax and Carbon Budgets in South Africa

This paper provides recommendations for combining the carbon budget with the carbon tax to support delivery of South Africa’s emissions reduction targets beyond 2020. Vivid’s analysis involved comparing four categories of policy alignment options, including layering, ‘tax enforces budget’ option, hybrid options with trading and differential instruments, across eight core principles such as emissions reduction effectiveness, emissions certainty, cost-effectiveness, polluter pays principle, equitable treatment, distributional issues, feasibility and simplicity, and sensitivity to international competition.