The dividends from a revenue neutral tax on coal in South Africa T.J. De Wet

South Africa is a significant contributor towards CO2 pollution on the African continent and authorities have started to examine different approaches available to manage the country’s extensive resource base. In this regard, a concern towards sustainable development in South Africa is the current levels of carbon dioxide (CO2) pollution in the country. Because the country is endowed with a significant portion of the world’s coal reserves, this natural resource is used relatively cheaply to supply in more than 75 percent of the country’s energy needs. Even higher on the list of social preferences in South Africa, is the problem of unemployment. Because the country has a high unemployment rate (28%), which has been the subject of numerous research and policy debates in the country, the notion of a possible “double dividend” that currently features strongly within the European research agenda could also be applicable to the South African market and the possibility of the achievement of such a benefit should be investigated. The attainment of a double dividend would allow the South African government to reduce CO2 emissions while the environmental tax revenue could be used to reduce the cost of labour, and thus decrease unemployment