Experts cast doubt on Ghana’s Carbon Tax
KUMASI (Eco Media) — Ghana has become the third African country to introduce a carbon tax known as the “Emission Levy,” following in the footsteps of South Africa and Mauritius. Starting February 1, 2024, the Ghana Revenue Authority (GRA) has commenced the implementation of the Emissions Levy Act of 2023. This Act imposes a levy on carbon dioxide equivalent emissions from internal combustion engine vehicles.
A carbon tax is a form of environmental taxation aimed at reducing the emission of greenhouse gases, particularly carbon dioxide (CO2), into the atmosphere.
It is designed to internalize the external costs of carbon emissions, accounting for the societal and environmental costs associated with climate change that are not reflected in the market price of goods and services.
According to the government, the purpose of the tax is to promote the use of eco-friendly technologies and green energy, improve environmental management, and control general levels of air and water pollution locally by imposing a levy on carbon dioxide equivalent emissions from specified sectors and emissions from internal combustion engine vehicles in the country.
However, environmental experts in the West African nation are casting doubt on the effectiveness of the carbon tax.
Awula Serwah, Esq., the founder of Eco-Conscious Citizens, expressed concerns about the lack of transparency regarding the utilization of the levy funds.
“In principle, we are not against any levy directly addressing environmental issues. The problem is that the emissions levy in its current form appears to be focused on revenue generation. It is clear about the levy for different vehicles, but it is not clear or transparent about where the monies will go and how they will be used to address environmental conservation and climate change,” she stated.
Activists say the reasons for the introduction of the tax are different from reality. For years, activists and the government have been at loggerheads over declassifying some forest reserves, increasing illegal mining that pollutes water bodies, and proposing mining in the Atewa Forest Reserve as part of a loan agreement with the Chinese government.
“If the government truly wants to protect the environment, it should know that it does not end only with emissions. There are other activities, like Galamsey and improper waste management, plaguing us. The government must revoke Li 2462 to protect our forest reserves that absorb carbon from the atmosphere, ban single-use plastics that serve as a major constraint to our waste management, and embark on constant civic education to effect behavioural change in citizens,” said Glory Emmanuella Appiah, acting National Coordinator, Ghana Youth Environmental Movement.
Thousands of people are exposed to toxic emissions daily. Picture: MAXWELL OCLOO
Ghana depends on fossil fuels (a non-renewable energy source) in all its sectors, with many renewable energy resources, including solar, wind, biomass, hydropower, tidal, and wave power, yet to be tapped into.
With little renewable energy infrastructure, it will be impossible for a total transition into renewable energy, a situation Emmanuella Doreen Kwofie, Esq., Director for Legal Affairs at Grandhedge International, said ought to have been addressed to an appreciable level before imposing a levy on emissions.
“It doesn’t make sense that we have not set up alternatives for citizens to use, and then we are imposing a levy. You impose a levy when you have provided the people with options, and they still choose to use vehicles powered by carbon dioxide. If the people say, ‘OK, I don’t want to pay this levy; I want another option,’ what is the other available option? We don’t have that,” she said.
Despite being one of the world’s lowest emitters of greenhouse gas (GHG) emissions, contributing only 0.07% of global GHG emissions, its carbon dioxide (CO2) emissions have increased from 2.5 million tonnes in 1972 to 23.6 million tonnes in 2021, representing an average annual growth rate of 5.29%.
Read: Climate change will cause an increase in prices of goods, study shows
The “Emission Levy” is projected to generate approximately Four Hundred and Fifty-One Million Cedis (GHC 451,000,000), equivalent to Thirty-six million, two hundred ninety-three thousand, two hundred twenty-one dollars ($36,293,221) for the 2024 fiscal year. The revenues will be paid into the consolidated Fund to support government expenditures.
“There has to be a clear allocation of the funds generated from this levy. That is, where is this fund going? It shouldn’t go into the general national coffers, where it’s used to pay salaries. All money generated from the emission levy should be invested in providing the country with alternatives so that in the next few years we’ll have a solid infrastructure and the people can smoothly transition,” explained Doreen.
“We have valid concerns about fairness and accountability. The government must be very transparent with the funds generated from this levy by rendering bi-annual or annual accounts,” added Emmanuella.
Between 2013 and 2017, Ghana received $776.5 million from international donors to address climate change. In 2023, the World Bank’s Forest Carbon Partnership Facility (FCPF) paid the country $4,862,280 million for reducing 972,456 tons of carbon emissions through sustainable cocoa farming.
Some experts, like Serwah, want the levy to be paused until there is a broader stakeholder consultation and clarity on how the money will be used.
“There should have been a consultation before the levy was passed. We believe the Emissions Levy should be paused until there is a broad stakeholder consultation and clarity on where monies will go and how monies collected will be used to address specific environmental conservation issues and climate change,” she said.
By: Ibrahim Khalilulahi Usman, Eco Media.
0 Comments