How an electricity tax will affect the South African economy

27 September 2009
Publication Type: Policy Brief
JEL Code: L94, Q4, Q48, Q58

An electricity tax imposed at the point of production in South Africa would reduce carbon dioxide emissions, albeit at the expense of a slight pullback in overall economic output, consumption and investment.

According to researchers R. Seymore, P.D. Adams, M. Mabugu, J.H. van Heerden and J. Blignaut, an electricity tax pegged at 2c/kWh the tax would shave a marginal 0,28% off South Africa’s GDP. The good news is that the abatement in carbon dioxide emissions in the electricity sector, as well as in the economy in general, would translate into a broader financial benefit of nearly R2bn.

Research Brief 10
1 September 2009

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