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Searching for Triple Dividends in South Africa: Fighting CO2 Pollution and Poverty while Promoting Growth

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Author Info

  • Jan van Heerden
  • Reyer Gerlagh
  • James Blignaut
  • Mark Horridge
  • Sebastiaan Hess
  • Ramos Mabugu
  • Margaret Mabugu

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 to 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 Ð decreasing emissions, increasing GDP, and decreasing poverty Ð when any one of the environmental taxes is recycled through a reduction in food prices.

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Bibliographic Info

Article provided by International Association for Energy Economics in its journal The Energy Journal.

Volume (Year): Volume 27 (2006)
Issue (Month): Number 2 ()
Pages: 113-142

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Handle: RePEc:aen:journl:2006v27-02-a07

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