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The Real Cost Of Going Clean: The Potential Impact Of South Africa’S 2016 Carbon Tax On Agricultural Production

Author

Listed:
  • Partridge, Andrew
  • Cloete-Beets, Leanne
  • Barends, Vanessa

Abstract

From 2016, South Africa will implement a carbon tax. The study analyzed the design of the tax and utilized a Computable General Equilibrium model to estimate the impact that the tax will have on the Agricultural Sector. The results suggest that the direct impact on the sector will be minimal; however, there are significant indirect impacts. These indirect impacts occur through the rising prices of intermediate inputs which experience more significant direct impacts of the tax. The study then dissected the indirect impacts to highlight what the key effects on the sector are likely to be. It was found that certain products will be severely hit, especially starches, dairy, sugar, fish, fruits and vegetables, meat, and forestry. While there is a key cause for concern, if the right courses of action are taken, then there is evidence to suggest that the negative impact of the shock can be significantly offset.

Suggested Citation

  • Partridge, Andrew & Cloete-Beets, Leanne & Barends, Vanessa, 2015. "The Real Cost Of Going Clean: The Potential Impact Of South Africa’S 2016 Carbon Tax On Agricultural Production," Professional Agricultural Workers Journal (PAWJ), Professional Agricultural Workers Conference, vol. 3(1), pages 1-13.
    • Handle: RePEc:ags:pawjal:236896
    DOI: 10.22004/ag.econ.236896
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    References listed on IDEAS

    as
    1. Thurlow, James & van Seventer, Dirk Ernst, 2002. "A standard computable general equilibrium model for South Africa," TMD discussion papers 100, International Food Policy Research Institute (IFPRI).
    2. Channing Arndt & Rob Davies & Konstantin Makrelov & James Thurlow, 2013. "Measuring the Carbon Intensity of the South African Economy," South African Journal of Economics, Economic Society of South Africa, vol. 81(3), pages 393-415, September.
    3. Devarajan, Shantayanan & Go, Delfin S. & Robinson, Sherman & Thierfelder, Karen, 2009. "Tax policy to reduce carbon emissions in south Africa," Policy Research Working Paper Series 4933, The World Bank.
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