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Estimating the economy-wide and redistributive impacts of climate mitigation: Application to South Africa

18th Oct 2023 @ 1:00 pm - 2:00 pm

For our next seminar we will have Faaiqa Hartley discussing how South Africa can achieve its goals with regards to the reduction of carbon emissions. She discusses the insights of such emission policies on poverty and inequality in South Africa.


South Africa is characterized by high levels of poverty and inequality which make a large proportion of the population vulnerable to climate change. At the same time, the country is one of the largest producers of emissions per capita due to its dependence on fossil fuels.

South Africa has committed to the global ambition to reduce emissions. In its Updated Nationally Determined Contribution, South Africa agreed to reduce emissions to between 398-510 Mt CO2-eq and 350-420 Mt CO2-eq, and in the 2050 Low Emissions Development Strategy it has voluntarily committed to reducing emissions to net zero by 2050. Such a transition requires structural changes in the economy which will have implications for households.

This paper builds on previous research assessing the impacts of more ambitious mitigation action in South Africa with the objective of better understanding the redistributive implications of mitigation. The study uses a linked energy-economic model for South Africa to assess the changes needed in the energy system to reach targeted emissions constraints of 9GT and 8GT over the period to 2050; and to assess the economy-wide impacts of these changes in the energy systems. The outputs from the economic model are then linked to an accounting-based microsimulation to assess the impacts on poverty and inequality. We also consider the implications of climate financing to support the energy transition, and the potential retaliatory implications of insufficient mitigation.

The results from the study show that increasing mitigation targets beyond those achieved under a least cost energy plan negatively affects real GDP and poverty. These impacts can however be mitigated through climate financing as it reduces the investment burden otherwise placed on the local economy. Failing to mitigate sufficiently opens the economy up to potential economic costs – these costs can be larger than ambitious emissions reductions without climate financing.

About the presenter:

Faaiqa is a SALDRU Research Officer who also contributes toward ACEIR. She joined SALDRU after having spent 4 years at the Energy Research Centre at the University of Cape Town and 8 years at the National Treasury of South Africa. Her research has centred on developmental issues in Africa, primarily South Africa, with her recent interests including energy transitions, climate change and circular economics. She is proficient in economy-wide modelling techniques, particularly Computable General Equilibrium (CGE) models and has been involved in the development of both the South African General Equilibrium model, SAGE, and the South African linked energy-economic model, SATIMGE. She also collaborates with UNU-WIDER and IFPRI.

This is an in-person event and registration is required to attend.

A light lunch will be served in the School of Economics staff lounge, Middle Campus at 12:30.



18th Oct 2023
1:00 pm - 2:00 pm
Event Category:


Amy Jephthah


UCT School of Economics, 4th Floor Seminar Room
UCT Middle Campus
Cape Town, Western Cape 7700 South Africa
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