Integrated water and economic modelling of the impacts of water market instruments on the South African economy.

Book Title: NA
Year Published: 2008
Month Published: NA
Author: Heerden, J. H. van ; Blignaut, J. ; Horridge, M.
Book Group Author: NA

A static computable general equilibrium model of South Africa is adapted to compare new taxes on water demand by two industries, namely forestry, and irrigated field crops. Comparisons are made with respect to both the short and the long run, in terms of three target variables, namely (i) the environment; (ii) the economy; and (iii) equity. Since the taxes on the two industries do not raise the same amount of revenue, the target variables are calculated per unit of real government revenue raised by the new taxes (also referred to as the marginal excess burdens of the taxes). The model results are robust for moderate values of the water elasticity of demand in the two industries, in both the long and the short run. The tax on irrigated field crops performs better in terms of all three the target variables in the short run. In the long run the tax on irrigated filed crops is better in terms of water saving, but reduces real GDP and the consumption by poor households.

Pages: 105 - 116
Volume: 66
Number: 1
Journal: Ecological Economics
Journal ISO: NA
Organization: NA
Publisher: NA
ISSN: 0921-8009

economic impact, forestry, irrigated farming, irrigationwater, markets, models, sustainability, taxes, water allocation, waterpolicy, water use, South Africa, Southern Africa, Africa South ofSahara, Africa, Developing Countries, Threshold Countries, AnglophoneAfrica, Commonwealth of Nations, taxation, Agricultural Economics(EE110), Forestry Economics (EE112) (New March 2000), Natural ResourceEconomics (EE115) (New March 2000), Policy and Planning (EE120),Investment, Finance and Credit (EE800), Soil Water Management(Irrigation and Drainage) (JJ800) (Revised June 2002) [formerly SoilWater Management], Forestry, Forest Products and Agroforestry (General)(KK000), Water Resources (PP200)

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