Robinson, ShermanDevarajan, ShantayananThierfelder, KarenGo, Delfin S.2012-03-192012-03-192009-05-01https://hdl.handle.net/10986/4127Noting that South Africa may be one of the few African countries that could contribute to mitigating climate change, the authors explore the impact of a carbon tax relative to alternative energy taxes on economic welfare. Using a disaggregate general-equilibrium model of the South African economy, they capture the structural characteristics of the energy sector, linking a supply mix that is heavily skewed toward coal to energy use by different sectors and hence their carbon content. The authors consider a "pure" carbon tax as well as various proxy taxes such as those on energy or energy-intensive sectors like transport and basic metals, all of which achieve the same level of carbon reduction. In general, the more targeted the tax to carbon emissions, the better the welfare results. If a carbon tax is feasible, it will have the least marginal cost of abatement by a substantial amount when compared to alternative tax instruments. If a carbon tax is not feasible, a sales tax on energy inputs is the next best option. Moreover, labor market distortions such as labor market segmentation or unemployment will likely dominate the welfare and equity implications of a carbon tax for South Africa. This being the case, if South Africa were able to remove some of the distortions in the labor market, the cost of carbon taxation would be negligible. In short, the discussion of carbon taxation in South Africa can focus on considerations other than the economic welfare costs, which are likely to be quite low.CC BY 3.0 IGOABATEMENTABATEMENT COSTADVERSE EFFECTSAIRAIR POLLUTIONALTERNATIVE ENERGYALTERNATIVE POLICY INSTRUMENTSAPPROACHATMOSPHEREAVERAGE PER CAPITA EMISSIONSBASIC METALSCARBONCARBON CAPTURECARBON CONTENTCARBON DIOXIDECARBON DIOXIDE EMISSIONSCARBON EMISSIONCARBON EMISSIONSCARBON TAXCARBON TAXESCLEAN TECHNOLOGIESCLEANER ENERGYCLEANER TECHNOLOGYCLIMATE CHANGECLIMATE CHANGE STRATEGYCLIMATE POLICYCOALCOAL ENERGYCOAL MININGCONSUMPTION OF PETROLEUMCOST OF ENERGYCPICRUDE OILDEMAND ELASTICITIESDEMAND ELASTICITYDEVELOPED COUNTRIESDISTORTIONARY TAXESDIVIDENDSDOUBLE DIVIDENDECONOMIC ANALYSISECONOMIC IMPACTECONOMIC WELFAREECONOMICSELASTICITIESELASTICITY OF SUBSTITUTIONELASTICITY VALUESELECTRICAL MACHINERYELECTRICITYELECTRICITY SECTOREMISSION DATAEMISSION REDUCTIONEMISSION REDUCTION TARGETSEMISSION REDUCTIONSEMISSION TARGETSEMISSION TRADINGEMISSIONS REDUCTIONENERGY CONSUMPTIONENERGY COSTSENERGY DEMANDENERGY ECONOMICSENERGY EXPENDITUREENERGY EXPENDITURESENERGY INPUTENERGY INTENSITYENERGY INTENSIVEENERGY POLICIESENERGY POLICYENERGY PRICESENERGY PRICINGENERGY PRODUCTIONENERGY RESEARCHENERGY SOURCEENERGY TAXENERGY TAXESENERGY TECHNOLOGIESENERGY TECHNOLOGYENERGY USAGEENERGY USEENVIRONMENTALENVIRONMENTAL ECONOMICSENVIRONMENTAL LAWENVIRONMENTAL POLICYENVIRONMENTAL PROTECTIONENVIRONMENTAL TAXATIONEQUILIBRIUMEQUITY IMPACTSEQUITY IMPLICATIONSEQUIVALENT VARIATIONEXCISE TAXESEXPENDITURE TAXEXTERNALITIESFERROUS METALSFISHERIESFISHINGFORESTRYFOSSILFOSSIL FUELFOSSIL FUEL EMISSIONSFOSSIL FUELSFUEL TAXESGAS SECTORGASOLINEGENERATIONGLOBAL CLIMATE CHANGEGLOBAL GREENHOUSEGLOBAL GREENHOUSE GASGLOBAL GREENHOUSE GAS EMISSIONSGNPGREENHOUSEGREENHOUSE EFFECTGREENHOUSE GASGREENHOUSE GAS EMISSIONSGREENHOUSE GASESHEAVY RELIANCEHIGH UNEMPLOYMENTIMPACTS OF CLIMATE CHANGEIMPERFECT COMPETITIONIMPORTSINCOMEINCOME TAXINELASTIC DEMANDINPUT TAXESINPUT USEINTERMEDIATE GOODSINTERMEDIATE INPUTSINTERNATIONAL ENERGY AGENCYLABOR FORCELABOR MARKETSLEISURELEVEL OF EMISSIONSMACROECONOMICSMARGINAL ABATEMENTMARGINAL COSTMARGINAL PRODUCTMARGINAL TAX RATESMARKET DISTORTIONSMOBILITYMOTOR VEHICLESNATIONAL INCOMENATIONAL INCOME ACCOUNTINGNATURAL GASNATURAL RESOURCESOILOIL CONSUMPTIONOIL IMPORTSOIL PRICEOPTIMAL TAXATIONPER CAPITA INCOMEPETROLEUMPETROLEUM PRODUCTSPOLLUTIONPOLLUTION CONTROLPOWERPOWER SECTORPRICE CHANGESPRICE OF ELECTRICITYPRICES OF ENERGYPRIMARY SOURCESPRODUCERSPRODUCTION FUNCTIONSPRODUCTION OF ENERGYPRODUCTION TECHNOLOGYPRODUCTIVITYPRODUCTIVITY GROWTHPUBLIC EXPENDITURESPUBLIC GOODQUOTASREAL WAGESREBATESRECYCLINGREDUCTION IN CARBONREDUCTION IN EMISSIONSREDUCTION OF EMISSIONSREFINED PETROLEUM PRODUCTSREVENUE RECYCLINGSALES TAXSALES TAXESSAVINGSSINGLE TAXSUBSTITUTION ELASTICITIESSUSTAINABLE DEVELOPMENTTAXTAX CHANGESTAX POLICIESTAX POLICYTAX RATETAX RATESTAX REFORMTAX REVENUETAX SUBSTITUTIONTAXATIONTRANSPORTTRANSPORT EQUIPMENTTRANSPORTATIONUNEMPLOYMENTUTILITIESVALUE ADDED TAXVALUE ADDED TAXESWAGE SUBSIDYWAGESWELFARE EFFECTSWELFARE GAINSWELFARE LOSSWELFARE LOSSESWOOD PRODUCTSWorld Bank10.1596/1813-9450-4933