A risk management strategy to identify and prioritise factors affecting industry’s carbon tax liability
Abstract
The proposed South African carbon tax system forms part of an
extensive structure of strategies aimed at addressing the main
challenges of climate change. The system is, however, complex,
with various concerns and uncertainties. Industries therefore need
to adapt positively in order to ensure their sustainability and
competitiveness. This paper presents a risk management strategy
for industries to identify and prioritise potential factors affecting
the cost of carbon tax. The risk management strategy consists of
five phases: 1) establishing the concept, 2) identifying the
associated risks, 3) analysing the risks, 4) evaluating the risks, and
5) managing the risks according to relevant international or national
standards. The risks are effectively prioritised by evaluating the
individual severity, likelihood, and correctability of each risk. The
strategy is applied to case studies in the iron and steel,
ferrochrome, and cement industries. The combined carbon tax
exposure for these case studies is about R453 million. A discussion
of the results reveals that the risk management strategy can be used
effectively to identify and prioritise carbon tax-associated risks,
and further mitigate the potential tax liabilities Die voorgestelde Suid-Afrikaanse koolstofbelastingraamwerk vorm
deel van ʼn uitgebreide struktuur van strategieë wat bedoel is om
die hoof uitdagings van klimaatsverandering aan te spreek. Dié
raamwerk is egter kompleks, met verskeie bekommernisse en
onsekerhede. Industrieë moet dus positief aanpas om hul
volhoubaarheid en mededingendheid te verseker. Hierdie artikel
bied ʼn riskobestuur-strategie aan vir industrieë wat hul potensiële
faktore, wat die koolstofbelasting kan beïnvloed, wil identifiseer.
Hierdie strategie bestaan uit vyf stappe: 1) vestiging van die konsep,
2) identifisering die gepaardgaande risiko’s, 3) analisering van
hierdie risiko’s, 4) evaluering van die risiko’s en 5) bestuur van die
risiko’s volgens relevante internasionale en nasionale standaarde.
Die risiko’s is effektief geprioritiseer deur die individuele erns,
waarskynlikheid, en korrigeerbaarheid van elk te evalueer. Die
strategie is toegepas tot gevallestudies in die yster-en-staal-,
ferrochroom-, en sementindustrieë. Die gekombineerde
koolstofbelasting blootstelling vir hierdie gevallestudies is ongeveer
R453 miljoen. ʼn Bespreking van die resultate toon dat dié
risikobestuur-strategie gebruik kan word om hierdie risiko’s te
identifiseer en te prioritiseer om sodoende verdere belasting-
implikasies te verminder.
URI
http://hdl.handle.net/10394/32828http://sajie.journals.ac.za/pub/article/view/2046/866
https://doi.org/10.7166/29-3-2046
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- Faculty of Engineering [1123]