African leaders bank on carbon taxes to raise climate finance

Monday September 11 2023

3D illustration of traffic sign showing Carbon tax. PHOTO | SHUTTERSTOCK


African leaders are eyeing a new “sin” tax on global emitters as a way of raising money from those who pollute the environment.

The Nairobi Declaration – the culmination of the three-day Africa Climate Summit held this week in Kenya – called on the global community to support Africa’s push for carbon taxation to “provide affordable and accessible finance for climate positive investments at scale.”

The leaders also demanded that other world leaders implement “a mix of measures that elevate Africa’s share of carbon markets” in similar efforts to improve the bloc’s access to climate finance.

Kenyan President William Ruto said both carbon taxes and carbon credits have the potential of providing the continent with the resources they need for climate change mitigation but are still underdeveloped and untapped.

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“To be able to unlock the resources that we need to be able to drive these new investment and financing opportunities, especially for green energy, we believe it is time to have a conversation about carbon tax,” President Ruto said.


“We have the carbon sinks that serve the world, cleans our environment, acts as sequestration of carbon that is produced by others, but we get nothing from it. It’s not anywhere in our balance sheets.”

Carbon credits provide a way for people and organisations in richer countries to pay those in poorer countries to offset the excess carbon dioxide they emit into the atmosphere through their economic and daily activities.

Carbon taxes, on the other hand, seek to impose levies on “fossil fuel trade, maritime transport and aviation”, according to the document adopted by all the continent’s leaders at the end of the summit.

Civil society organisations have, however, criticised the effectiveness of both carbon credits and carbon taxes in tackling climate change, claiming both tools will only continue to worsen the problem.

A report published last week ahead of the summit by Power Shift Africa and a group of NGOs called on the leaders to quash the Africa Carbon Markets Initiative formed at COP27 last year to advance the continent’s participation in the global carbon markets, terming it a “distraction from Africa’s real interests and priorities for development.”

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“Carbon markets assume that western companies will continue to emit huge quantities of greenhouse gases in the coming decades, purchasing carbon credits to ‘offset’ these emissions,” read the report.

“But there is no room for the illusion of offsets in a world that has vastly exceeded safe levels of climate pollution and where polluting companies ought to be aiming for real zero emissions, not net zero, as fast as possible.”

Nairobi-based Tunisian development economist Fadhel Kaboub also argues that the concepts of carbon taxes and carbon credits are both “inherently flawed” as they assume a continued emission by top emitters to source revenues to mitigate climate change or address its impact on African populations.

“It means that in order for us to reach the scale of financing necessary, we would want these polluters to be bigger, more powerful, more profitable companies so we can tax a little bit of their profits to fund climate action,” he told The EastAfrican.