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Searching for Triple Dividends in South Africa: Fighting CO2 pollution and poverty while promoting growth

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

Suggested Citation

  • Jan van Heerden & Reyer Gerlagh & James Blignaut & Mark Horridge & Sebastiaan Hess & Ramos Mabugu & Margaret Mabugu, 2006. "Searching for Triple Dividends in South Africa: Fighting CO2 pollution and poverty while promoting growth," The Energy Journal, , vol. 27(2), pages 113-142, April.
    • Handle: RePEc:sae:enejou:v:27:y:2006:i:2:p:113-142
    DOI: 10.5547/ISSN0195-6574-EJ-Vol27-No2-7
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    More about this item

    Keywords

    Air pollution; CO2; poverty; Double-dividend; CGE; Environmental tax; South Africa;
    All these keywords.

    JEL classification:

    • F0 - International Economics - - General

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