The Economic Implications of Introducing Carbon Taxes in South Africa

Theresa Alton, Channing Arndt, Rob Davies, Faaiqa Hartley, Konstantin Makrelov, James Thurlow and Dumebi Ubogu

No wp-2012-046, WIDER Working Paper Series from World Institute for Development Economic Research (UNU-WIDER)

Abstract: South Africa is considering introducing carbon taxes to reduce greenhouse gas emissions. We evaluate potential impacts using a dynamic economy-wide model linked to an energy sector model. Simulation results indicate that a phased-in carbon tax that reaches US$30 per ton of CO2 by 2022 achieves the ambitious 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 behaviour, the preferred tax scenario reduces national absorption and employment by 1.2 and 0.6 per cent, respectively, by 2025.

Keywords: Income distribution; Public welfare; Environmental taxation; Unemployment (search for similar items in EconPapers)
Date: 2012
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Citations: View citations in EconPapers (14)

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