Somewhat against expectations, the National Treasury announced the implementation date for the proposed South African carbon tax in the recent budget. Given the long (and continuing) delay in the release of an update on the National Treasury’s carbon tax discussion paper issued in December 2010 (the update was originally due to be released in November 2011), it was feared that the process to implement a carbon tax had lost steam. A firm implementation date for the carbon tax, however, was announced during the recent Budget Speech. Even though time lines have slipped somewhat (the 2012 Budget Review indicated that a carbon tax would be put in place during the 2013-2014 fiscal year), South Africa is now firmly on track to have a carbon tax implemented on the first of January 2015.

In my last blog post (November 2012), I mentioned that public awareness of carbon taxes (crudely approximated by the frequency of Google searches) has been declining steadily since the run-up to the implementation of the CO2 vehicle emissions tax in September 2010. This despite the potentially much larger impact of a broad-based carbon tax on consumers and the wider economy, the publication of a National Treasury discussion document on the issue in December 2010, and the inclusion of carbon tax design features and an implementation timeframe in the 2012 Budget Review.

This blog considers whether the announcement of a firm implementation date has had any impact on public interest and awareness. The updated graph below shows that it has not. Despite steady increases in interest since the beginning of the year, there were still fewer Google searches relating to a carbon or CO₂ tax in the wake of the announcement of the date in February 2013 than there were at any time between the announcement of the implementation date and the actual implementation of the CO₂ vehicle emissions tax (February and September 2010 respectively).

Source: Google Trends

This is not entirely unexpected given the differing length of the periods between the announcement and the published implementation dates of the two taxes. The CO₂ vehicle emissions tax was to be implemented within the fiscal year covered by the Budget in which the announcement was made, whereas the broad-based carbon tax is to be implemented towards the end of the following fiscal year.

More interestingly, the uptick in interest in the months following the Budget announcement each year has become increasingly smaller since 2011. At present, then, it would seem that the general public is still viewing the imposition of a broad-based carbon tax as less likely now than it did in 2010. This may change once the National Treasury releases its pending policy paper. But since the previous discussion paper did not lead to much general interest in the possibility of a carbon tax, substantial public engagement is probably required to avoid the backlash that may accompany the general realisation that a carbon tax is upon us. [i]