Redistributing environmental tax revenue to reduce poverty in South Africa : the cases of energy and water

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Authors

Van Heerden, J.H. (Jan Horn), 1957-
Blignaut, James Nelson
Chitiga-Mabugu, Margaret
Gerlagh, Reyer
Hess, Sebastiaan
Tol, Richard S.J.
Horridge, Mark
Mabugu, Ramos
De Wit, M.P. (Martinus Petrus)
Letsoalo, Anthony

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Volume Title

Publisher

Faculty of Economic and Management Sciences University of Pretoria

Abstract

South Africa, as an upper middle-income, resource-intensive developing country with an open economy, has to find innovative ways to combat poverty, promote economic growth and reduce the intensity of resource use, simultaneously. One option is to explore the plausibility of achieving a double dividend by levying a tax on water and energy and recycling the revenue back to the economy by allowing for a reduction in other forms of taxation. According to the double dividend theory it is possible, under some conditions, to achieve both environmental and economic objectives. We investigated such a possibility in the South African economy using an integrated economy/environment CGE model and found that it is indeed possible to achieve such double dividend benefits. Given the prevailing economic and environmental contexts, government should actively search for ways to achieve such dividends.

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Keywords

South African economy, Environmental tax revenue, Poverty, Economic growth, Energy, Water

Sustainable Development Goals

Citation

Van Heerden, J, Blignaut, J, Mabugu, M, Gerlagh, R, Hess, S, Tol, RSJ, Horridge, M, Mabugu, R, De Wit, M & Letsoalo, T 2006, 'Redistributing environmental tax revenue to reduce poverty in South Africa : the cases of energy and water', South African Journal of Economic and Management, vol. 9, no. 4, pp. 537-552. [http://www.journals.co.za/ej/ejour_ecoman.html]