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

dc.contributor.authorVan Heerden, J.H. (Jan Horn), 1957-
dc.contributor.authorBlignaut, James Nelson
dc.contributor.authorBohlmann, Heinrich R.
dc.contributor.authorCartwright, Anton
dc.contributor.authorDiederichs, Nicci
dc.contributor.authorMander, Myles
dc.contributor.emailjan.vanheerden@up.ac.zaen_ZA
dc.date.accessioned2017-01-13T05:40:17Z
dc.date.available2017-01-13T05:40:17Z
dc.date.issued2016
dc.descriptionThis paper was an update of a December 2010 paper on the same topic.en_ZA
dc.description.abstractSouth 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.departmentEconomicsen_ZA
dc.description.librarianam2016en_ZA
dc.description.sponsorshipThe World Bank’s Partnership for Market Readiness on Climate Change Mitigation programmeen_ZA
dc.description.urihttp://www.sajems.orgen_ZA
dc.identifier.citationVan 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.issn1015-8812 (print)
dc.identifier.issn2222-3436 (online)
dc.identifier.other10.17159/2222-3436/2016/v19n5a3
dc.identifier.urihttp://hdl.handle.net/2263/58498
dc.language.isoenen_ZA
dc.publisherUniversity of Pretoria, Department of Economicsen_ZA
dc.rights© 2016 The Authors. Published under a Creative Commons Attribution Licence.en_ZA
dc.subjectCarbon taxen_ZA
dc.subjectEconomic effectsen_ZA
dc.subjectEnvironmental effectsen_ZA
dc.subjectSouth Africa (SA)en_ZA
dc.subjectCGE modellingen_ZA
dc.subjectComputable general equilibrium (CGE)en_ZA
dc.subjectGreenhouse gas (GHG)en_ZA
dc.subjectGross domestic product (GDP)en_ZA
dc.subjectUniversity of Pretoria general equilibrium model (UPGEM)en_ZA
dc.titleThe economic and environmental effects of a carbon tax in South Africa : a dynamic CGE modelling approachen_ZA
dc.typeArticleen_ZA

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