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Publication Details
AFRICAN RESEARCH NEXUS
SHINING A SPOTLIGHT ON AFRICAN RESEARCH
energy
Introducing carbon taxes in South Africa
Applied Energy, Volume 116, Year 2014
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Description
South Africa is considering introducing a carbon tax to reduce greenhouse gas emissions. Following a discussion of the motivations for considering a carbon tax, we evaluate potential impacts using a dynamic economywide model linked to an energy sector model including a detailed evaluation of border carbon adjustments. Results indicate that a phased-in carbon tax of US$30 per ton of CO2 can achieve national emissions reductions targets set for 2025. Relative to a baseline with free disposal of CO2, constant world prices and no change in trading partner behavior, the preferred tax scenario reduces national welfare and employment by about 1.2 and 0.6 percent, respectively. However, if trading partners unilaterally impose a carbon consumption tax on South African exports, then welfare/employment losses exceed those from a domestic carbon tax. South Africa can lessen welfare/employment losses by introducing its own border carbon adjustments. The mode for recycling carbon tax revenues strongly influences distributional outcomes, with tradeoffs between growth and equity. © 2013 The Authors.
Authors & Co-Authors
Alton, Theresa
South Africa, Pretoria
National Treasury
Arndt, Channing
Denmark, Copenhagen
Københavns Universitet
Davies, Rob
South Africa, Pretoria
National Treasury
Hartley, Faaiqa
South Africa, Pretoria
National Treasury
Makrelov, Konstantin
South Africa, Pretoria
National Treasury
Thurlow, James T.
Finland, Helsinki
United Nations University World Institute for Development Economics Research
Ubogu, Dumebi
South Africa, Pretoria
National Treasury
Statistics
Citations: 160
Authors: 7
Affiliations: 3
Identifiers
Doi:
10.1016/j.apenergy.2013.11.034
ISSN:
03062619
Research Areas
Environmental
Study Locations
South Africa