The Focus Of Tax Instruments In Reducing Emissions From Electricity Generation In Selected Developing Countries

Abstract

The objective of the study was to determine the primary focus of selected developing countries (four BRICS countries; namely, Brazil, China, India and South Africa) in applying tax instruments to reduce their emissions from electricity generation. The focus of tax instruments could be on supply or demand; incentives or disincentives; direct or indirect taxes; and renewable energy, energy efficiency or research and development in these fields. It was found that the tax instruments in SouthAfrica 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 application of incentives, rather than disincentives and the focus of their tax incentives appears to fall equally on the application of direct and indirect taxes, with the exception of South Africa where hardly any indirect tax incentives are applied. 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 apply tax instruments to target energy efficiency.

Tax Instruments Applied In Selected Developing Countries To Reduce Emissions From Electricity Generation Recommendations For South Africa

“…The objective of this study is to identify areas for possible improvement or expansion of the tax instruments that are applied in South Africa to indirectly contribute to the reduction of emissions from the generation of electricity, by comparing it to the tax instruments applied for a similar purpose in certain other developing countries (China, Brazil and India). The rationale for comparing South Africa to these countries is set out in Dippenaar (2014).…”