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Budget: Coal still gets more support than clean

Posted by Laura Grant on February 16, 2009
Posted in Business, Renewable energy

coal-fired-plantEnvironmental organisation WWF South Africa has welcomed the taxes targeting “unsustainable spending” in this year’s Budget, but says that the government needs to help to reduce the cost of sustainable alternatives by providing renewable energy with the same finance support it gives to fossil fuel.

The group describes as “very positive moves” the carbon tax on new vehicles, which means that people who buy the most fuel-efficienct vehicles will pay less tax; the increase in the fuel levy; the levy on inefficient incandescent light-bulbs; the tax breaks for investments in energy efficiency; and the clarity on tax exemption for carbon credits, which encourages the generation of carbon credit and greenhouse gas savings, but not speculation in carbon credit.

But the government has agreed to guarantee R176-billion worth of debt for the national power utility, Eskom, in order to reduce the cost of finance for its R343-billion investment, most of which will go towards financing massive new coal power stations.

Peet du Plooy, WWF’s Trade and Investment Advisor in South Africa, says: “It would not be reasonable in a country that pursues climate leadership, to exclude the renewable energy sector from the same much-needed finance support that government is extending, via Eskom, to investment in fossil fuel infrastructure.”

“WWF does not support the planning basis for the present Eskom expansion, or the selection of conventional coal technology as a result of such planning. However, if this public investment were accepted as a ship that’s already sailed, there is still a case to be made that the same provisions should also be available to guarantee the finance of clean, renewable energy,” says Du Plooy.

Motor vehicle manufacturing, airlines and mining, “some of the most environmentally risky industries”, have also received support worth billions of rands in this year’s Budget, the WWF points out in a statement.

Photo by Arnold Paul, licensed under Creative Commons Atr

The organisation also says that the R6.4 billion that will be made available for public transport, roads and rail infrastructure would be made more sustainable if the money were “channelled more towards public transport and rail infrastructure rather than roads”.

Du Plooy also said that: “A tax on emissions-intensive industries like private cars or fossil-fuelled electricity, should be balanced with incentives for job-intensive, low-emissions alternatives like public transport and renewable energy.”

Source: WWF

Photo by Arnold Paul licensed under Creative Commons Attribution ShareAlike 2.5

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