A carbon taxation regime covering carbon tax on fossil fuel, maritime transport, and aviation could generate additional funds to support the Africa energy transition.
Thats the view of Claver Gatete, executive secretary of the Economic Commission for Africa (ECA), who was speaking on the sidelines of a dialogue on carbon markets and development at the tenth Africa Regional Forum on Sustainable Development in Addis Ababa, Ethiopia recently.
If combined with other policy measures, carbon tax could help to mitigate those residual emissions that cannot be addressed by carbon credit markets or subsidies and technologies. Such a tax could allow countries to improve responses to their commitments to contribute to reducing climate instability, said Gatete.
With reference to ECAs preliminary studies in exploring the benefits of carbon tax, he noted that carbon tax in the global supply chains could allow countries like Egypt and Ethiopia to reap substantial revenues that could be reallocated to research and development in aviation and marine transport.
ECA studies also indicate that investing in nature-based solutions in African countries could generate up to $82 billion annually at a price of $120/tCO2 equivalent.
Renewable energy and carbon sinks from forests and other ecosystems are indeed a great potential that countries should harness to generate additional revenues and support the ongoing efforts to build climate- and disaster-resilient green and blue economies. This would enable the countries to make more progress towards their sustainability goals, said Gatete.
Highlighting the importance of decarbonising economies and expanding revenue streams through clean energy, Albert Muchanga, Commissioner for Economic Development, Trade, Industry and Mining at the African Union Commission, said decarbonising economies through carbon taxation was crucial to address the climate crisis. However, strong engagement with stakeholders at national and global level is necessary for success.
In her contribution to the discussion, Ahunna Eziakonwa, regional director, United Nations Development Programme(UNDP),said climate carbon credits had the potential to address the financial challenges the continent was facing but favourable deals and ensuring resources were directed towards development initiatives were crucial to ensure that climate action in Africa was effective and sustainable.
Implementing the carbon tax requires evidence-based analysis and engagement with stakeholders including policymakers, investors and civil society organisations, she said.
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