SUNConferences, 29th Annual Conference of SAIIE

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A RISK MANAGEMENT STRATEGY TO IDENTIFY AND PRIORITISE FACTORS AFFECTING INDUSTRY’S CARBON TAX
Janine Booysen, Walter Booysen, Marius Kleingeld

Last modified: 2018-10-17

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 need to positively adapt 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 (in millions) for these case studies are approximately R10 112. A discussion of the results revealed that the risk management strategy can be used to effectively identify and prioritise carbon tax associated risks and furthermore mitigate the potential tax liabilities.