About the Document
This is a critical literature review published in 2022 by MDPI, written by Favourate Y. Mpofu of the School of Accounting, University of Johannesburg. It examines green taxes (also called environmental, climate or eco taxes) in the African context, with respect to revenue mobilization, environmental protection and the 2030 Sustainable Development Goals (SDGs).
Aims and Context
The review states that governments face a dilemma in ensuring green economic growth, reducing environmental and climate change problems, and fostering effective revenue mobilization, given that fossil fuels are fundamental energy sources for African countries. It sets out to interrogate whether the design and administration of environmental taxes in Africa help attain the double dividend of revenue mobilization and reduced environmentally damaging activities.
Theoretical Framework
The study is built on the double dividend (DD) theory. The text notes there is no consensus on the existence of the DD: the environmental dividend is described as more widely accepted, while the economic dividend is described as contested. The author cites Freire-González, who reviewed 69 simulations from 40 studies and found 55% pointed to a likely double dividend.
Methodology
The paper is a critical literature review with a qualitative approach. Searches of Scopus and Google Scholar used terms such as "Environmental taxes in Africa" and "Green taxes and the Sustainable development goals in Africa". From 150 studies accessed, 60 were found relevant, and snowballing identified 10 additional papers. The review reports 99 papers in total, with the literature reviewed until saturation was reached.
Key Findings
- Green taxes can support revenue mobilization and green transformation, but may increase inequality, energy costs and energy poverty for those dependent on fossil fuels.
- Such taxes could compromise SDG 7 (clean energy) and SDG 1 (poverty reduction), and increase black market activity.
- In Africa, carbon and fuel taxes were the most prevalent, with South Africa, Nigeria and Zimbabwe cited; plastic levies and fuel taxes appeared in Botswana, Zimbabwe and South Africa.
- Environmental taxes were found to be less effective in curbing damage where populations depend heavily on fossil fuels.
Challenges and Implications
The review identifies challenges including weak institutions, low administrative capacity, low tax morale and high dependence on fossil fuels. It also reports possible competitiveness effects, such as the "carbon leakage" described by Braathen and Greene, where businesses may relocate to lower-tax jurisdictions.
Limitations
The author states the review relies mostly on previous studies, so their biases may affect its quality. It is purely qualitative, and no empirical research or primary data collection was conducted.
Why It Matters for Urban and Fiscal Policy
The author presents the work as contributing to the literature on environmental taxes in Africa and to policy and practice on environmental protection, sustainable development and the SDGs. The conclusions call for green taxes to be balanced with other policy instruments and assessed for their rates and structure.