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Carbon taxation and firm behaviour in emerging economies: Evidence from South Africa

Author

Listed:
  • Johannes Gallé
  • Rodrigo Oliveira
  • Daniel Overbeck
  • Nadine Riedel
  • Edson Severnini

Abstract

This paper provides the first comprehensive analysis of how firms in emerging economies respond to carbon taxation, leveraging detailed administrative data from South Africa—a potential trailblazer for other developing countries with limited state capacity amid the growing global push for carbon pricing. We examine the dynamic impacts of the carbon tax on firm-level outcomes—such as profits, sales, capital, and labour inputs—across manufacturing and mining firms, which are key sectors in the context of the carbon tax.

Suggested Citation

  • Johannes Gallé & Rodrigo Oliveira & Daniel Overbeck & Nadine Riedel & Edson Severnini, 2025. "Carbon taxation and firm behaviour in emerging economies: Evidence from South Africa," WIDER Working Paper Series wp-2025-33, World Institute for Development Economic Research (UNU-WIDER).
    • Handle: RePEc:unu:wpaper:wp-2025-33
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    Keywords

    Carbon pricing; Carbon tax; Firm performance; Employment;
    All these keywords.

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