Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/108003
Authors: 
Arndt, Channing
Davies, Rob
Gabriel, Sherwin
Makrelov, Konstantin
Merven, Bruno
Salie, Faaiqa
Thurlow, James
Year of Publication: 
2014
Series/Report no.: 
WIDER Working Paper 2014/135
Abstract: 
We link a bottom-up energy sector model to a recursive dynamic computable general equilibrium model of South Africa in order to examine two of the country's main energy policy considerations: (i) the introduction of a carbon tax and (ii) liberalization of import supply restrictions in order to exploit regional hydropower potential. Our results suggest substantial reductions in the country's greenhouse gas emissions when these two policy changes are jointly implemented (relative to business-as-usual baseline scenario). Moreover, the two policies impose essentially no cost to economic growth, although there is a 1 per cent reduction in employment. From our analysis we conclude that a regional energy strategy, anchored in hydropower, represents a potentially inexpensive approach to reducing emissions in South Africa. Moreover, combining carbon taxes with a removal of import restrictions lessens the burden of adjustment on politically sensitive and economically important sectors.
Subjects: 
integrated bottom-up model
the integrated MARKAL-EFOM system
computable general equilibrium
carbon tax
South Africa
JEL: 
O55
Q43
Q47
Q49
ISBN: 
978-92-9230-856-8
Document Type: 
Working Paper

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