The economic and environmental effects of a carbon tax in South Africa : a dynamic CGE modelling approach

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dc.contributor.author Van Heerden, J.H. (Jan Horn), 1957-
dc.contributor.author Blignaut, James Nelson
dc.contributor.author Bohlmann, Heinrich R.
dc.contributor.author Cartwright, Anton
dc.contributor.author Diederichs, Nicci
dc.contributor.author Mander, Myles
dc.date.accessioned 2017-01-13T05:40:17Z
dc.date.available 2017-01-13T05:40:17Z
dc.date.issued 2016
dc.description This paper was an update of a December 2010 paper on the same topic. en_ZA
dc.description.abstract South Africa’s National Treasury released its Carbon Tax Policy Paper in May 2013. The paper proposed a R120/tCO2-equiv. levy on coal, gas and petroleum fuels. Here, we model the possible impacts of such a tax on the South African economy using the computable general equilibrium (CGE) 53-sector model of the University of Pretoria’s Department of Economics. The model shows that the carbon tax has the capacity to decrease South Africa’s greenhouse gas (GHG) emissions by between 1 900MtCO2-equiv. and 2 300MtCO2-equiv. between 2016 and 2035. The extent of emissions reductions is most sensitive to the rate at which tax exemptions are removed. Recycling of carbon tax revenue reduces the extent of emissions reductions due to the fact that economic growth is supported. The manner in which carbon tax revenue is recycled back into the economy is therefore important in terms of the extent of emissions reductions achieved, but not as significant as the influence of different exemption schedules. The model shows the carbon tax to have a net negative impact on South Africa’s gross domestic product (GDP) relative to the baseline under all exemption regimes and all revenue recycling options assessed. The negative impact of the carbon tax on GDP is, however, greatly reduced by the manner in which the tax revenue is recycled. Recycling in the form of a production subsidy for all industries results in the lowest negative impact on GDP. en_ZA
dc.description.department Economics en_ZA
dc.description.librarian am2016 en_ZA
dc.description.sponsorship The World Bank’s Partnership for Market Readiness on Climate Change Mitigation programme en_ZA
dc.description.uri http://www.sajems.org en_ZA
dc.identifier.citation Van Heerden, J, Blignaut, J, Bohlmann, H, Cartwright, A, Diederichs, N & Mander, M 2016, 'The economic and environmental effects of a carbon tax in South Africa : a dynamic CGE modelling approach', South African Journal of Economic and Management Sciences, vol. 19, no. 5, pp. 714-732. en_ZA
dc.identifier.issn 1015-8812 (print)
dc.identifier.issn 2222-3436 (online)
dc.identifier.other 10.17159/2222-3436/2016/v19n5a3
dc.identifier.uri http://hdl.handle.net/2263/58498
dc.language.iso en en_ZA
dc.publisher University of Pretoria, Department of Economics en_ZA
dc.rights © 2016 The Authors. Published under a Creative Commons Attribution Licence. en_ZA
dc.subject Carbon tax en_ZA
dc.subject Economic effects en_ZA
dc.subject Environmental effects en_ZA
dc.subject South Africa (SA) en_ZA
dc.subject CGE modelling en_ZA
dc.subject Computable general equilibrium (CGE) en_ZA
dc.subject Greenhouse gas (GHG) en_ZA
dc.subject Gross domestic product (GDP) en_ZA
dc.subject University of Pretoria general equilibrium model (UPGEM) en_ZA
dc.title The economic and environmental effects of a carbon tax in South Africa : a dynamic CGE modelling approach en_ZA
dc.type Article en_ZA


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