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Carbon taxes can have a significant effect on emissions.
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”The time is right to implement carbon taxes”

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A report published by the renowned think tank Brookings features one section called Recipe for a green recovery: Carbon taxes. “We have been preaching about carbon taxes for decades, but we think that the post-covid recovery is the time when they will finally get a real impact”, says Gunnar Köhlin, one of the four co-authors.

Brookings Africa Growth Initiative publishes a yearly report called Foresight Africa.  This report aims to capture the top priorities for the region in the coming year, offering recommendations for African and global stakeholders for creating and supporting a strong, sustainable, and successful Africa.

Focus on post-covid recovery

This year the focus is, not surprisingly, on recovering after the pandemic. This will, as in the rest of the world, call for powerful measures. Although this will be costly and painful, it also provides an opportunity to steer towards a more sustainable economy.

“The governments need to raise money and rebuild their countries with the right incentives. By implementing carbon taxes, you raise money and get an opportunity to encourage growth by for instance investing in renewable energy”, comments Gunnar Köhlin, professor at Environment for Development at the University of Gothenburg.

Rich people pay most

There is a widespread misconception that carbon taxes hit hardest against poor people. The authors can, however, show that the case is really the opposite – it’s people with high incomes who pay most for the carbon taxes.

“A tax is not like a price increase from a foreign oil company. The tax stays in the country and should be used to the benefit of all citizens – in particular the poor”, explains Thomas Sterner, professor of environmental economics at the University of Gothenburg and co-author of the report. 

Discourages fossil industry

Carbon taxes depress the demand for imported oil, which keeps the price low, which is good for importers and bad for the oil-exporting industry.

“That will most likely discourage the fossil industries to develop new oil fields and mines,” says Thomas Sterner.

The authors of Recipe for a green recovery: Carbon taxes are: Gunnar Köhlin, Ira Dorband, Jan Christoph Steckel, and Thomas Sterner

Read the section on carbon taxes

Read the full report Foresight Africa 2021