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Triple dividends of water consumption charges in South Africa
Author(s) -
Letsoalo Anthony,
Blignaut James,
de Wet Theuns,
de Wit Martin,
Hess Sebastiaan,
Tol Richard S. J.,
van Heerden Jan
Publication year - 2007
Publication title -
water resources research
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.863
H-Index - 217
eISSN - 1944-7973
pISSN - 0043-1397
DOI - 10.1029/2005wr004076
Subject(s) - computable general equilibrium , dividend , agriculture , consumption (sociology) , poverty , natural resource economics , economics , agricultural economics , water scarcity , yield (engineering) , irrigated agriculture , water use , water resource management , environmental science , geography , economic growth , microeconomics , ecology , social science , materials science , archaeology , finance , sociology , biology , metallurgy
The South African government is exploring ways to address water scarcity problems by introducing a water resource management charge on the quantity of water used in sectors such as irrigated agriculture, mining, and forestry. It is expected that a more efficient water allocation, lower use, and a positive impact on poverty can be achieved. This paper reports on the validity of these claims by applying a computable general equilibrium model to analyze the triple dividend of water consumption charges in South Africa: reduced water use, more rapid economic growth, and a more equal income distribution. It is shown that an appropriate budget‐neutral combination of water charges, particularly on irrigated agriculture and coal mining, and reduced indirect taxes, particularly on food, would yield triple dividends, that is, less water use, more growth, and less poverty.