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
| Field | Value | |
| Title | The economic and environmental effects of a carbon tax in South Africa: A dynamic CGE modelling approach | |
| Creator | Van Heerden, Jan Blignaut, James Bohlmann, Heinrich Cartwright, Anton Diederichs, Nicci Mander, Myles | |
| Description | The economic and environmental effects of a carbon tax in South Africa: A dynamic cge modelling approachSouth Africas 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 Pretorias Department of Economics. The model shows that the carbon tax has the capacity to decrease South Africas 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 Africas 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. | |
| Publisher | AOSIS Publishing | |
| Date | 2016-12-09 | |
| Identifier | 10.4102/sajems.v19i5.1586 | |
| Source | South African Journal of Economic and Management Sciences; Vol 19, No 5 (2016); 714-732 2222-3436 1015-8812 | |
| Language | eng | |
| Relation |
The following web links (URLs) may trigger a file download or direct you to an alternative webpage to gain access to a publication file format of the published article:
https://sajems.org/index.php/sajems/article/view/1586/657
https://sajems.org/index.php/sajems/article/downloadSuppFile/1586/547
https://sajems.org/index.php/sajems/article/downloadSuppFile/1586/548
https://sajems.org/index.php/sajems/article/downloadSuppFile/1586/549
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