Green Taxes in Africa: Opportunities and Challenges for Environmental Protection, Sustainability, and the Attainment of Sustainable Development Goals

Abstract

Discussions on the impact of climate change and ways of protecting climate change impact driven by environmentally unfriendly activities have taken the center stage of global development agendas. The importance of environmental sustainability is also reflected in the 2030 Sustainable Development Goals (SDGs). Green taxes have become pivotal to protecting the environment, revenue generation and achievement of the SDGs. Through a critical literature review, this paper explores the opportunities and challenges associated with green taxes with respect to revenue mobilization, protection of the environment and delivery of the SDGs. The paper gives an insight to green taxes, exploring the motives of green taxes and the possible implications for environmental sustainability, sustainable development, and attainment of the SDGs in the African context. Fossil fuels such as coal, crude oil and natural gases are fundamental sources of energy for African countries. Therefore, the continent faces a dilemma of how to ensure green economic growth, reduce environmental and climate change problems, and at the same time foster effective revenue mobilization. The review established that while green taxes can provide an opportunity for green transformation policy reforms and boost revenue mobilization to stimulate inclusive and sustainable growth and economic recovery from the COVID-19-induced economic recession, the taxes can increase inequality, heighten the cost of energy, and increase energy poverty for those dependent on fossil fuel for energy. The lack of affordability and access would compromise SDGs such as 7 and 1 (access to clean energy and poverty reduction, respectively). The taxes could lead to a disjointed value chain with consumers disadvantaged and an increase in black market activities as people seek cheaper but unsafe alternatives, indirectly increasing the social costs such as health risks and challenges, poverty, and unemployment.

Study on the Spatial and Temporal Evolution of High-Quality Development in Nine Provinces of the Yellow River Basin

“…Their study assessed the compliance of Ecuadorian power generation companies with the sustainable development goals. Mpofu [33] argued that green taxes have become key to achieving the sustainable development goals and that green taxes can provide opportunities for green transition policy reforms in African countries, but that green taxes can increase inequality and raise energy costs.…”

A Panel Analysis Regarding the Influence of Sustainable Development Indicators on Green Taxes

“…In response to this immense pressure, countries are applying a variety of economic tools to achieve sustainable economic development and environmental conservation goals. Among these, green taxes have become the most significant and prosperous financial instrument in climate change and the fight for environmental conservation [1][2][3]. According to several authors, they are also known as environmental taxes, eco-taxes, climate taxes, ecological taxes, and environmental taxes [1,4,5].…”

“…Among these, green taxes have become the most significant and prosperous financial instrument in climate change and the fight for environmental conservation [1][2][3]. According to several authors, they are also known as environmental taxes, eco-taxes, climate taxes, ecological taxes, and environmental taxes [1,4,5].…”

“…For example, energy taxes include those levied on products used in the transportation sector and electricity generation, such as natural gas and fossil fuels, among others. A part of policy initiatives, i.e., green taxes, aims to achieve certain environmental objectives, such as encouraging the adoption of cleaner and cost-effective energy sources, promoting sustainable industry and greener initiatives and behaviors, as well as discouraging the use of certain energy sources [1,18,19]. The specialized literature of recent years has highlighted that taxes related to the environment or energy can be considered as a double dividend for the government.…”

Do Energy Consumption and CO2 Emissions Significantly Influence Green Tax Levels in European Countries?

“…In response to this immense pressure, countries have applied a variety of tools to achieve sustainable development and environmental conservation goals. Even though various instruments are available to governments, green taxes have become the most significant and used financial instrument in the fight against climate change and environmental conservation [5].…”