In his 2024 Budget Speech, Finance Minister Enoch Godongwana unveiled a series of ambitious sustainability and climate action initiatives aimed at mainstreaming climate finance and fostering a transition towards a greener economy.
In his address, Minister Godongwana underscored the critical role of the National Treasury in mobilising resources and influencing policy to mainstream climate change initiatives.
Recognising the escalating threats posed by climate-related disasters, the government is adopting a multi-layered risk-based approach to manage fiscal risks, supported by various funding instruments such as the Climate Change Response Fund and disaster response grants.
The Treasury is also reviewing disaster response grants to enhance efficiency and incentivise disaster planning and preparedness. A climate-budget tagging framework is also in development to track climate-related expenditures in public budgets, thereby influencing policy and budget decisions.
The government's commitment to sustainability extends to the automotive industry, as outlined in the Electric Vehicles White Paper.
With a vision to transition from internal combustion engine vehicles to electric vehicles by 2035, the strategy includes investment allowances for new investments in electric and hydrogen-powered vehicles, aimed at stimulating production and consumption in South Africa.
The minister highlighted the importance of leveraging public procurement for transformation, citing the passage of the Public Procurement Bill as a significant step forward.
The bill includes measures such as set-asides and pre-qualification to advance persons disadvantaged by unfair discrimination, fostering inclusivity and economic empowerment.
Lastly, Minister Godongwana addressed environmental concerns through adjustments to the carbon tax rates and fuel levies.
With the carbon tax rate set to increase to R190 per tonne of CO2 equivalent and corresponding adjustments to carbon fuel levies for petrol and diesel, the measures aim to incentivise sustainable practices and mitigate environmental impact.
South Africa’s carbon tax came into effect in 2019 and is based on the “polluter pays” principle, incorporating the real cost of GHG emissions into the price of carbon-intensive production activities.
In his 2022 Budget speech, Godongwana extended the first phase of the carbon tax by three years to December 31, 2025, with mandatory carbon budgeting having come into effect from January 1, 2023.
In a nutshell, Minister Godongwana's Budget Speech underscores the government's commitment to fostering resilience, driving economic transformation, and protecting the environment.
IOL Environment