Mitigating climate change through carbon pricing: An emerging policy debate in South Africa

Vorster, Shaun; Winkler, Harald; Jooste, Meagan

doi:10.1080/17565529.2011.598367

Cited by 18 publications

(18 citation statements)

References 4 publications

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“…Several studies have examined the consequences of environmental policy on investments in environmental protection technologies (Alton et al 2014;Arguedas & van Soest 2010;Blanco & Rodrigues 2008;Buchner 2007;Chakraborty et al 2004;Hart 2008;Hyder 2008;Knutsson, Werner & Ahlgren 2006;Laurikka 2006;Laurikka & Koljonen 2006;McGilligan, Sunikka-Blankb & Natarajan 2010;Reinaud 2003;Scenario Building Team 2007;Sekar et al 2007;Tyler & Cloete 2015;Vorster et al 2011;Winkler 2007;Winkler & Marquard 2011;Yang & Blyth 2007;Zhao 2003; for an overview of different environmental tax schemes in the European Union and other countries cf. Cansino et al 2010;Markandya et al 2009;National Treasury 2010:43-49, 2013.…”

Section: Background: Financial Evaluation On Imperfect Markets Under mentioning

confidence: 99%

“…Being one of the world's most carbon-intensive economies, 'ranked among the top 20 countries measured by absolute carbon dioxide (CO 2 ) emissions' (National Treasury 2010:16, 2013, and based on prior research examining different options and scenarios (Scenario Building Team 2007;Tyler & Cloete 2015;Vorster, Winkler & Jooste 2011;Winkler 2007;Winkler & Marquard 2011), South Africa is on the way to introduce a carbon tax as a Pigouvian measure for the reduction of greenhouse gas (GHG) emissions from 2017. Three tax bases were discussed (National Treasury 2010:30-34, 2013):…”

Section: Introductionmentioning

confidence: 99%

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Unintended possible consequences of fuel input taxes for individual investments in greenhouse gas mitigation technologies and the resulting emissions

Klingelhöfer

2017

SAJEMS

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Background: South Africa is planning to introduce a carbon tax as a Pigouvian measure for the reduction of greenhouse gas emissions, one of the tax bases designed as a fuel input tax. In this form, it is supposed to incentivise users to reduce and/or substitute fossil fuels, leading to a reduction of CO2 emissions.Aim: This article examines how such a carbon tax regime may affect the individual willingness to invest in greenhouse gas mitigation technologies.Setting: Mathematical derivation, using methods of linear programming, duality theory and sensitivity analysis.Methods: By employing a two-step evaluation approach, it allows to identify the factors determining the maximum price an individual investor would pay for such an investment, given the conditions of imperfect markets.Results: This price ceiling depends on the (corrected) net present values of the payments and on the interdependencies arising from changes in the optimal investment and production programmes. Although the well-established results of environmental economics usually can be confirmed for a single investment, increasing carbon taxes may entail sometimes contradictory and unexpected consequences for individual investments in greenhouse gas mitigation technologies and the resulting emissions. Under certain circumstances, they may discourage such investments and, when still undertaken, even lead to higher emissions. However, these results can be interpreted in an economically comprehensible manner.Conclusion: Under the usually given conditions of imperfect markets, the impact of a carbon tax regime on individual investment decisions to mitigate greenhouse gas emissions is not as straight forward as under the usually assumed, but unrealistically simplifying perfect market conditions. To avoid undesired and discouraging effects, policy makers cannot make solitary decisions, but have to take interdependencies on the addressee´s side into account. The individual investor´s price ceiling for such an investment in imperfect markets can be interpreted as a sum of (partially corrected) net present values, which themselves are a generalisation of the net present values known from perfect markets

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Section: Background: Financial Evaluation On Imperfect Markets Under mentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Unintended possible consequences of fuel input taxes for individual investments in greenhouse gas mitigation technologies and the resulting emissions

Klingelhöfer

2017

SAJEMS

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“…3 Nevertheless, Africa remains the most vulnerable to climate change impacts. The continent is least able to cope with climate change and a large number of the poor and the marginalized engage in economic activities that are concentrated in climate sensitive sectors (Houghton et al, 2001;Vorster et al, 2011). It is noteworthy that no country in Africa is currently obliged to meet any specific emission reduction target, due to relatively low levels of GHG emissions.…”

Section: Introductionmentioning

confidence: 99%

“…Compared to other continents in the world, Africa emits low amounts of Green House Gases (GHGs) (African Development Report [ADR], 2012;Akpalu, Arndt, & Matshe, 2015;Vorster, Winkler, & Jooste, 2011). 2 Although the continent's total carbon dioxide (CO 2 ) emissions have increased by about 35% over the last two decades according to recent estimates, the continent's emission per capita is about 13 times less than that of North America (ADR, 2012;IEA, 2012).…”

Section: Introductionmentioning

confidence: 99%

“…The challenge is how to ensure that the continent continues to register high economic growth while pursuing low-carbon development pathways in order to avert potentially damaging future climate impacts (ADR, 2012). 4 Indeed, for carbon abatement strategies to be effective, African nations must jointly address economic development and social welfare or poverty impacts (Garibaldi et al, 2014;Vorster et al, 2011).…”

Section: Introductionmentioning

confidence: 99%

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Public disclosure for carbon abatement: African decision-makers in a PROPER public good experiment

Akpalu

Abidoye

Muchapondwa

et al. 2016

Climate and Development

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A linear public good experiment adopted from Holt and Laury [1997. Classroom games: Voluntary provision of a public good. Journal of Economic Perspectives, 11(4), 209-215.] has been employed to investigate strategic behaviour in pollution abatement among African climate decision-makers. The experiment consisted of three groups, of which groups 2 and 3 received one and two treatments, respectively. The first treatment entailed publicly disclosing the pollution of each member of a group by placing a corresponding colour-coded card in front of each subject, while the second involved the withdrawal of the public disclosure. Group 2 received the first treatment; Group 3 received both the first and second treatments in succession. We found that the untreated group (baseline) polluted more than the two treated groups, and there was no statistically significant difference between the pollution abatement of the two treated groups. These results suggest that public disclosure potentially drives pollution abatement and that its eventual withdrawal does not obliterate abatement behaviour. We did not observe conditional cooperation but average pollution declined over time. Furthermore, individuals who thought it was unfair for Africa to reduce emissions polluted more. We also found that pollution levels differ significantly between males and females.

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A Comparative Analysis of South Africa’s Carbon Pricing Policy in the Power and Energy-Intensive Industries

Makamela,

Ramfol

2024

Springer Proceedings in Business and Economics

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Mitigating climate change through carbon pricing: An emerging policy debate in South Africa

Cited by 18 publications

References 4 publications

Unintended possible consequences of fuel input taxes for individual investments in greenhouse gas mitigation technologies and the resulting emissions

Unintended possible consequences of fuel input taxes for individual investments in greenhouse gas mitigation technologies and the resulting emissions

Public disclosure for carbon abatement: African decision-makers in a PROPER public good experiment

A Comparative Analysis of South Africa’s Carbon Pricing Policy in the Power and Energy-Intensive Industries

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