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The impact of the COVID-19 enforced lockdown and fiscal package on the South African economy and environment: a preliminary analysis

Published online by Cambridge University Press:  07 September 2021

Margaret Chitiga-Mabugu Open the ORCID record for Margaret Chitiga-Mabugu [Opens in a new window] ,
Martin Henseler Open the ORCID record for Martin Henseler [Opens in a new window] ,
Ramos Mabugu Open the ORCID record for Ramos Mabugu [Opens in a new window]  and
Helene Maisonnave Open the ORCID record for Helene Maisonnave [Opens in a new window]
Margaret Chitiga-Mabugu
Affiliation:
University of Pretoria, Pretoria, South Africa
Martin Henseler
Affiliation:
Thünen Institute of Rural Studies, Braunschweig, Germany Partnership for Economic Policy (PEP), Nairobi, Kenya EDEHN – Equipe d'Economie Le Havre Normandie, University of Le Havre Normandie, Le Havre, France
Ramos Mabugu
Affiliation:
Sol Plaatje University, Kimberley, South Africa
Helene Maisonnave*
Affiliation:
EDEHN – Equipe d'Economie Le Havre Normandie, University of Le Havre Normandie, Le Havre, France
*
*Corresponding author. E-mail: [email protected]
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Abstract

This paper offers a quantitative assessment of the impacts of the COVID-19 pandemic-induced lockdown and government fiscal plan, containing ‘green’ elements on the economy and the environment of South Africa. The analysis uses a dynamic computable general equilibrium model operationalised using a social accounting matrix coupled with a greenhouse gas balance and emissions data. We find that while the economy is harshly impacted by the pandemic in the short term, the government fiscal package ameliorates and cushions the negative effects on poor households. Importantly, an adaptation of the fiscal package towards a ‘greener’ policy achieves the same economic outcome and reduces unemployment. Carbon dioxide emissions decrease in the short run due to economic slowdown. This improvement persists until 2030. These results can be used as decision support for policy makers on how to orient the post COVID-19 policies to be pro-poor and pro-environment, and thus, ‘build back better and fairer’.

Keywords

COVID-19environmental impactCGEinequalitySouth Africa

JEL classification

C68: Computable General Equilibrium Models H30: General O44: Environment and Growth
Type
Research Article
Information
Environment and Development Economics , Volume 27 , Issue 3 , June 2022 , pp. 209 - 222
Copyright
Copyright © The Author(s), 2021. Published by Cambridge University Press

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