Presentation template - WWF South Africa

Carbon Pricing (2)• From a policy perspective it is thus important to note that a carbon priceis intended to correct for one for the most significant global marketfailures.• How the revenue raised via a carbon tax (or the auctioning of permitsunder an emissions trading scheme) is used will impact on the overalleconomy of a country as well as the distributional implications and on thecompetitiveness position of trade exposed and energy intensive sectors.• Some form of tax shifting and /or revenue recycling might be appropriate.• Tax shifting implies that the revenue from for example a carbon tax couldbe used to reduce other more distortionary taxes – such a payroll taxes.• Revenue recycling mean that some of the revenue from a carbon taxcould be used to fund initiatives to neutralize the impact on the poor, e.g.free basic electricity, subsidized public transport, subsidized solar heatergeysers, or temporary relief or incentives to industries (e.g. the proposedenergy efficiency savings tax incentive).10