Browsing by Author "Heerden, Jan van"

Now showing 1 - 3 of 3
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    Counting the cost of drought induced productivity losses in an agro-based economy: The case of Uganda
    (Economic Research Southern Africa (ERSA), 2016) Kilimani, Nicholas; Heerden, Jan van; Bohlmann, Heinrich; Roos, Louise
    Climate variability can affect economies directly through its impact on agricultural output, and indirectly, through its effect on the activi- ties of down-stream industries and household welfare. This paper uses a Computable General Equilibrium model with a disaggregated agricultural sector to analyse the impact of a drought on the Ugandan economy. The losses were assessed with respect to GDP, agricultural output, employ- ment, the trade balance and household consumption. The drought effects were shown to vary by sector. The fall in employment within the agricul- tural industries was less compared to the output losses. At a macro level, exports declined, while at a household level, the terms of trade gains mit- igated part of the potential welfare losses thereby reducing consumption, but to a lesser degree. The findings indicate that a drought can cause substantial losses to the economy. The need for targeted interventions to mitigate such drought impacts is therefore critical.
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    Economy-wide impact of drought induced productivity losses
    (Disaster Prevention and Management: An International Journal, 2018) Kilimani, Nicholas; Heerden, Jan van; Bohlmann, Heinrich
    The purpose of this paper is to investigate how a drought which initially affects agricultural productivity can ultimately affect an entire economy. The study aims to assess the magnitude of the impact as well as highlight key issues that can inform the implementation of drought mitigation programmes. Design/methodology/approach – The paper presents the literature on the economic impact of drought and uses a computable general equilibrium model where productivity shocks are applied to the agricultural industries following which the resulting impacts on the rest of the sectors of the economy are obtained. Findings – The findings show that the key macroeconomic variables, namely, real GDP, industry output, employment, the trade balance and household consumption are negatively affected by the drought shock. Practical implications – The results point to the fact that in the absence of drought mitigation mechanisms, the occurrence of even a short drought as modelled in this paper can impose substantial socioeconomic losses. Originality/value – First, a general equilibrium framework which uses climate and economic data when evaluating the social-economic impacts of drought is used. Most studies employ partial equilibrium analysis in analysing drought impacts on specific sectors or crops within a limited geographical area. Others use global or multi-regional models which impose averages on the observed impacts. The current study provides valuable insights on the potential damage which droughts can impose on a single economy. This gives a basis for decision making to support drought mitigation policies and programmes.
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    Water taxation and the double dividend hypothesis
    (Water Resources and Economics, 2015) Kilimani, Nicholas; Heerden, Jan van; Bohlmann, Heinrich
    The double dividend hypothesis contends that tax policies which are aimed at protecting the environment can potentially yield other benefits for the economy. However, empirical evidence of the potential impacts of environmental taxation in developing countries is still limited. This may be partly due to the limited use of environmental tax policies in economic and environmental management in many of these countries. This paper seeks to contribute to the literature by exploring the impact of a water tax in a developing country context, with Uganda as a case study. Policy makers in Uganda are exploring ways of raising revenue by taxing environmental goods such as water. Whereas their primary focus is to raise revenue, this study is aimed at demonstrating how taxes on environmental goods can potentially yield other benefits beyond addressing a country's fiscal needs. This study employs a computable general equilibrium model to shed light on the impact of a water tax policy when a tax is accompanied by a plough-back scheme of the same magnitude. We seek to establish whether a water tax policy that is accom- panied by a revenue plough-back scheme can induce more growth, employment and industry output. Whatever the degree of regressivity resulting from the tax, it is possible to design a policy that benefits the economy. The policy was also checked for sustainability using a long-run water demand scenario. The results show that water demand remains more or less on the same trajectory and in fact, a higher level of dividends is realized.