As fuel use increases, should Govt consider raising carbon tax?

Jeffrey Gogo Climate Story
Fuel consumption in Zimbabwe soared by about 70 percent between January and February, to an estimated 141 million litres of diesel and 114 million litres of petrol per month. Government blamed the increase on speculation and other things. In climate terms, however, this was actually an expansion in the emission of carbon dioxide (CO2), a potent climate-warming gas.

With 1 000 gigatonnes of CO2 equivalent as per 2009 data, transport already generates about four percent of the total greenhouse gases emissions in Zimbabwe — the fourth largest emitting industry in the country.

No doubt, these figures may have doubled over the past decade, as the national vehicle population, which climbed 50 percent to 1,2 million at the end of 2014, continues to swell.

By our own calculations, the surge in fuel use during the first two months of this year would have released an additional 262 million kg of carbon dioxide equivalent on the average per month CO2 emissions from the transport sector alone.

This is not taking into account the fuel inefficiencies of used Japanese cars that flood Zimbabwe’s roads or the high polluting airline industry. Second-hand cars have been accused of generating more emissions per kilometre travelled because of poor fuel efficiency.

The expanded fuel consumption is thus evidently dangerous not only to the natural environment, but also to Zimbabwe’s limited foreign currency reserves, needed to import diesel and petrol at a scale of a few billion dollars each year.

But, perhaps, this is only one way of looking at this vicious, complex situation. The other is to acknowledge that the country is already in a good position with the existing tax on carbon, if it truly intends to use that to curb emissions growth — something that Government has routinely defaulted on in the last 20 years.

Since 2001 when Zimbabwe started to put a price on carbon for fuel, ostensibly to curb greenhouse gases emissions, petrol and diesel consumption has expanded rapidly ever since. To drive on the roads, Zimbabwean motorists have to pay RTGS3 cents per litre of petrol, and per litre of diesel, for the pollution they cause, according to tax collector Zimra.

That’s about $13 per tonne of carbon dioxide emissions equivalent (CO2e) for petrol, and $11 per tonne of CO2 emissions for diesel. However, this is substantially lower than what is actually needed to achieve the global temperature targets agreed at Paris in 2015.

To do that, prices would have to rise to between $40/tCO2e – $80/tCO2e, says the World Bank’s State and Trends of Carbon Pricing 2017 report. Obviously, authorities would be asking too much were motorists required to pay for carbon at global market prices, particularly in a depressed economy like Zimbabwe’s.

But the idea is that of compensation. Therefore, Government must expand the fuel taxes and align them with carbon dioxide emissions, by how much, we don’t know.

There is unused potential here – since 2001, the carbon tax rates in the country have barely increased in real terms. It started off as quarterly payments, which didn’t quite clearly reflect the frequency of travel, which is the frequency of carbon emissions, and later changed to the current system, which forces frequent travellers to pay more for the pollution they generate.

The only real problem is that the Government has no genuine reason to do this.

Having diverted carbon income to other needs, it will have to convince motorists on the need to raise the tax.

This is not money that’s been used exclusively to control emissions outside of the transport sector, much less within the sector itself, say, by developing sustainable transport systems that significantly use less energy. Zimbabwe’s public transport system largely remains a jungle.

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