New environment protection regime coming into place {writer: Piet Coetzer}

South Africa’s environmental protection legislation has been beefed up considerably, with amendments to two key laws having come into force during September this year. In the process, the fines applicable in the case of certain transgressions have risen to well over R1 million.

This is but one of the factors presently in play which would see a new urgency introduced to the way in which South Africa deals with the challenges posed by climate change.

In the run-up to the United Nations talks in December, debate on whether incentives or taxes should be used in chasing targets has begun, and the process to put overall policy in place is on the go.

Besides increased penalties, the amendments to environment legislation have also widened the range of environmentally damaging behaviour or practices that are criminalised.

The latest amendments also bring South African legislation and penalties for environmental crimes on par with practices in the developed world.

The changes follow on an extensive process of review of applicable legislation by the Department of Water and Environmental Affairs.

It is now a punishable offence to cause damage to the environment, and people who do not fulfill their obligations could be criminally prosecuted. Fines of up to R1m or a jail sentence of one year could be imposed.

In the case of the transgressions under the National Environment Management Act, the Air Quality Act, the Act on Protected Areas and Biodiversity, maximum fines have been increased to R5m, or five years in jail.

In the case of repeat offenders, maximum fines and jails sentences have climbed to R10m, or 10 years in jail.

On the front of emission control and efforts to decrease South Africa’s carbon footprint, a debate is raging between experts on whether the government, in terms of its tax regime, should use the ‘carrot’ or the ‘stick’ approach to persuade companies to reduce their carbon emissions.

Certain legislative mechanisms will have to be put in place if the upcoming talks on a new international agreement on reducing greenhouse gas (GHG) emissions, scheduled for early December this year in Copenhagen, are to be successful in formulating acceptable targets.

If South Africa should commit to a carbon emission reduction plan, the government could follow one of two routes to reduce the country’s carbon footprint: It could decide on either a carbon tax or a cap-and-trade system.

Carbon taxes affect the price of emissions and let the market determine the quantity of emissions. With a cap-and-trade system, the government sets the quantity of emissions and then allows the market to determine the price through trading or auctions of “carbon credits”.

Some experts argue that the cap-and-trade system, which is incentive-based, is the way to go for South Africa. Not only would it provide an incentive to reduce carbon emissions, but it would also incentivise the development of and change to environmentally friendly new technologies.

Others are of the opinion that at this stage, the tax approach is more appropriate, since it would avoid potential big cost fluctuation and would not require additional regulatory bodies and can be administrated by existing tax-collecting infrastructure.

It is also possible that a regime combining the two approaches could be developed, where taxes are introduced for those companies that do not take up the incentive option.

There are also fears that the tax approach could lead to a situation where the cost on non-compliance with emission targets is passed on to the end consumer and thus not actually penalising the non-compliant company.

On the front of the development of new ‘clean’ technologies, a recent report by the Global Climate Network found that there is strong interest in clean technology in South Africa.

However, the report entitled “Development and Transfer of Clean/Low Carbon Technologies in South Africa” does state that “there is a need to scale up the clean-technology market according to a national clean-technology road map, developed by different stakeholders and fostering a enabling policy and legislative environment to optimise investment – public, private and international – and the timely commercialisation of scientific research”.

The process that should deliver such an enabling environment over the next two years or so, has begun. The country’s National Climate Change Response Policy is set to be developed by the end of 2010.

The related fiscal, legislative and regulatory package is expected to be implemented by 2012.