TRIPLE DIVIDENDS OF WATER CONSUMPTION CHARGES IN SOUTH AFRICA

Anthony Letsoalo, James Blignaut, Theuns de Wet, Martin de Wit, Sebastiaan Hess, Richard Tol and Jan Van Heerden ()

No FNU-62, Working Papers from Research unit Sustainability and Global Change, Hamburg University

Abstract: The South African government is exploring ways to address water scarcity problems by introducing a water resource management charge on the quantity of water used in sectors such as irrigated agriculture, mining and forestry. It is expected that a more efficient water allocation, lower use and a positive impact on poverty can be achieved. This paper reports on the validity of these claims by applying a computable general equilibrium model to analyse the triple dividend of water consumption charges in South Africa: reduced water use, more rapid economic growth, and a more equal income distribution. It is shown that the appropriate, budget-neutral combination of water charges, particularly on irrigated agriculture and coal mining, and reduced indirect taxes, particularly on food, would yield triple dividends.

Keywords: water scarcity; water charges; triple dividend; poverty alleviation; computable general equilibrium model (search for similar items in EconPapers)
JEL-codes: O13 Q25 (search for similar items in EconPapers)
Pages: 32 pages
Date: 2005-04, Revised 2005-04
New Economics Papers: this item is included in nep-afr, nep-agr, nep-cmp and nep-dev
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (21)

Published, Water Resources Research, 43, W05412

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