Fighting Co2 Pollution and Poverty While Promoting Growth: Searching for Triple Dividends in South Africa

22 Pages Posted: 18 Nov 2005

See all articles by Jan van Heerden

Jan van Heerden

University of Pretoria - Department of Economics

Reyer Gerlagh

Tilburg University - Tilburg University School of Economics and Management

James Blignaut

University of Pretoria - Department of Economics

Mark Horridge

Monash University - Department of Economics

Sebastiaan Hess

VU University Amsterdam - Institute for Environmental Studies (IVM)

Ramos Emmanuel Mabugu

Financial and Fiscal Commission

M. Chitiga

University of Pretoria - Department of Economics

Date Written: March 8, 2005

Abstract

A CGE model of South Africa is used to find the potential for a 'double or triple dividend', if the revenues raised from an energy related environmental tax are recycled into households and industry through lowering existing taxes. Four environmental taxes and three revenue-recycling schemes are compared. The environmental taxes are (i) a tax on greenhouse gas emissions, (ii) a fuel tax, (iii) a tax on electricity use, and (iv) an energy tax. The four taxes are constructed such that they have a comparable effect on emissions. The revenue is recycled through either (i) a direct tax break on both labour and capital, (ii) an indirect tax break to all households, or (iii) a reduction in the price of food. A triple dividend is found when any one of the environmental taxes is recycled through a reduction in food prices.

Keywords: CO2, Poverty, Double-dividend, CGE, Environmental tax

JEL Classification: D58, H21, O10

Suggested Citation

van Heerden, Jan and Gerlagh, Reyer and Blignaut, James and Horridge, Mark and Hess, Sebastiaan and Mabugu, Ramos Emmanuel and Chitiga, Margaret Mabugu, Fighting Co2 Pollution and Poverty While Promoting Growth: Searching for Triple Dividends in South Africa (March 8, 2005). PREM Working Paper No. 05-02. Available at SSRN: https://ssrn.com/abstract=849245 or http://dx.doi.org/10.2139/ssrn.849245

Jan Van Heerden (Contact Author)

University of Pretoria - Department of Economics ( email )

Physical Address Economic and Management Sciences
Pretoria, Gauteng 0002
South Africa

Reyer Gerlagh

Tilburg University - Tilburg University School of Economics and Management ( email )

P.O. Box 90153
Tilburg, 5000 LE
Netherlands

James Blignaut

University of Pretoria - Department of Economics ( email )

Physical Address Economic and Management Sciences
Pretoria, Gauteng 0002
South Africa

Mark Horridge

Monash University - Department of Economics ( email )

Wellington Road
Centre of Policy Studies
Clayton, Victoria 3
Australia
+61 3 990 52464 (Phone)

Sebastiaan Hess

VU University Amsterdam - Institute for Environmental Studies (IVM) ( email )

De Boelelaan 1115
Amsterdam, 1081 HV
Netherlands
+31 20 5989550 (Phone)

HOME PAGE: http://www.ivm.falw.vu.nl/People/index.cfm/home_file.cfm/fileid/D9EF4567-29E3-49B2-97667C99A5728DB1/

Ramos Emmanuel Mabugu

Financial and Fiscal Commission ( email )

South Africa

Margaret Mabugu Chitiga

University of Pretoria - Department of Economics ( email )

Lynnwood Road
Hillcrest
Pretoria 0002
South Africa

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