Cost of SA exports to rise on EU shipping tax

The 27-member EU as a bloc is SA's biggest trading partner. Annual two-way trade between the two regions generates R400bn.

SA's free-trade deal with the EU has resulted in tariffs being removed on 98% of SA's goods exported to the EU. In return, SA is expected to do away with tariffs on 86% of EU imports by next year.

The Pretoria-based state agency, the South African Maritime Safety Authority, indicates that merchandise trade accounts for half of SA's gross domestic product and that 98% of this trade is conducted by sea.

At loggerheads of EU aviation tax

SA is one of 21 countries that are already at loggerheads with the EU on an aviation tax to become effective on 1 January. The tax on all airlines flying through the EU's airspace has been introduced as part of bold measures to reduce carbon emissions.

A "road map" will be unveiled by the EU at the United Nations (UN) conference on climate change in Durban. The action plan includes lobbying UN members to sign a commitment to have a legal agreement on climate change signed by 2015.

"The tax will raise the cost of imports into the EU for all trading partners, but the incidence will depend on how the tax is designed," Draper said.

Roeland van de Geer, the EU's envoy to SA, said on Friday shipping and aviation contributed "significantly" to carbon emissions, which the bloc wanted to limit.

"That is why we are quite persistent that a shipping and aviation tax must be included in any deal that hopes to limit carbon emissions."

The EU believes a second commitment period on the Kyoto Protocol without a legal clause will be "useless" and not assist with measures to limit the damage caused by carbon emissions.

SA, as host of the conference, is pushing for a second commitment period on the protocol.

Molewa 'optimistic' compromise will be reached

Water and Environmental Affairs Minister Edna Molewa, the leader of SA's delegation, is optimistic that a compromise will be reached to institute plans to curb carbon emissions by the end of the negotiations on December 9.

SA will also have to address the concerns of fellow Brics members China and India on measures to mitigate climate change. Both countries are reluctant at this stage to adopt ambitious plans on carbon emissions that will limit plans to undertake large-scale industrial projects.

A report released on Friday by the UN Environment Programme said that fast action on short-lived climate forces would not be able to keep global temperatures from rising by less than 2°C by the end of the century, unless governments acted decisively on the principal greenhouse gas, carbon dioxide.

"A package of 16 measures could, if fully implemented across the globe, save close to 2,5 million lives a year, avoid crop losses amounting to 32 million tons annually, and deliver near-term climate protection of about half a degree Celsius by 2040," the report said.

Analysts predict Africa will be the continent most at risk from climate change in the absence of a global agreement that will force nations to implement policies to keep temperature change at less than 2°C.

Source: Business Day via I-Net Bridge