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Carbon pricing and industrial policy in South Africa

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  • BRENT CLOETE
  • GENNA ROBB

Abstract

Economic instruments to mitigate climate change alter the relative cost structures of sectors within economies and between economies. This will lead to structural changes within economies benefiting less carbon-intensive goods and services. One area of government policy that is particularly important in this context is industrial policy, which aims to facilitate structural changes in economies towards higher-productivity activities. To ensure that industrial policy places South Africa on a low-carbon growth path, it needs to start favouring less carbon-intensive industries. Industrial policy must align with the use of economic instruments to mitigate climate change in South Africa in order to ensure the implementation of appropriate industrial strategies for a carbon-constrained world. This interplay between carbon pricing and industrial policies in South Africa is investigated by considering, on the positive side, the opportunities created by climate change and, on the negative side, the potential impact of carbon pricing on industrial competitiveness. Climate change considerations can be successfully incorporated into industrial policy in order to move South Africa towards a sustainable low-carbon growth path. Several suggestions for modifying policy are made. This will ensure that the economic costs of carbon pricing are minimized while potential long-term competitiveness advantages are maximized.

Suggested Citation

  • Brent Cloete & Genna Robb, 2010. "Carbon pricing and industrial policy in South Africa," Climate Policy, Taylor & Francis Journals, vol. 10(5), pages 494-510, September.
    • Handle: RePEc:taf:tcpoxx:v:10:y:2010:i:5:p:494-510
    DOI: 10.3763/cpol.2010.0104
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    References listed on IDEAS

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    1. Ricardo Hausmann & Dani Rodrik & Charles F. Sabel, 2008. "Reconfiguring Industrial Policy: A Framework with an Application to South Africa," CID Working Papers 168, Center for International Development at Harvard University.
    2. Harald Winkler and Andrew Marquard, 2007. "Energy Development and Climate Change: Decarbonising Growth in South Africa," Human Development Occasional Papers (1992-2007) HDOCPA-2007-40, Human Development Report Office (HDRO), United Nations Development Programme (UNDP).
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    Cited by:

    1. Jun-Yi Zheng & Wan-Gang Lv & Jie Shen & Mei Sun, 2022. "Study on the Impact of the Healthy Cities Pilot Policy on Industrial Structure Upgrading: Quasi-Experimental Evidence from China," Sustainability, MDPI, vol. 14(20), pages 1-18, October.
    2. Shengli Dai & Weimin Zhang & Yingying Wang & Ge Wang, 2022. "Examining the Impact of Regional Development Policy on Industrial Structure Upgrading: Quasi-Experimental Evidence from China," IJERPH, MDPI, vol. 19(9), pages 1-18, April.

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