Fighting Co2 Pollution and Poverty While Promoting Growth: Searching for Triple Dividends in South Africa
22 Pages Posted: 18 Nov 2005
Date Written: March 8, 2005
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: Suggested Citation