A Proactive Response to Climate and Economic Imperatives
The Ivorian government is preparing to implement a landmark environmental policy by developing a pioneering national strategy for taxing carbon emissions. Spearheaded by the Ministry of Economy, Finance, and Budget, this major initiative aims to halt the rise of greenhouse gas (GHG) emissions and accelerate the shift toward a more environmentally sustainable economy.
The strategic document highlights a concerning trend: Côte d’Ivoire’s robust post-Covid economic growth has been accompanied by a significant increase in carbon emissions. The carbon intensity of the Ivorian economy has risen from 0.15 to 0.18 tonnes per thousand dollars between 1990 and 2024. This increase is largely driven by a heavy reliance on fossil fuels, the expansion of the transport sector, growing industrialization, and agricultural practices that produce substantial emissions.
Leaders have underscored the direct threat that climate change poses to the national economy. Rising temperatures, altered rainfall patterns, and heightened environmental risks are already having a severe impact on various sectors, particularly agriculture, a cornerstone of employment and gross domestic product in Côte d’Ivoire.
A Strategy Aligned with International Commitments
This reform demonstrates Côte d’Ivoire’s dedication to fulfilling its international climate pledges. As part of its Nationally Determined Contribution (NDC 3.0), the nation has set a goal to independently reduce its greenhouse gas emissions by 33.07%, with a potential reduction of up to 74% with international support by 2035.
This initiative is also integrated with reforms agreed upon with the International Monetary Fund (IMF), particularly under the Resilience and Sustainability Facility (RSF). The development of a carbon tax system specifically tailored to Côte d’Ivoire’s economic and social circumstances is a key component of these measures.
Limitations of the Existing Fiscal Framework
The report acknowledges that various environmental fiscal tools are already in place in Côte d’Ivoire. These include levies on petroleum products and energy, targeted environmental taxes, and royalties applied to the forestry and mining sectors.
However, their primary function has been to generate public revenue, with only a modest influence on the transition to a low-carbon economy. The new strategy seeks to amplify the incentive effect of ecological taxation, thereby encouraging both businesses and households to adopt more sustainable and environmentally friendly practices.
A Progressive and Socially Responsible Carbon Tax
The forthcoming carbon tax will primarily target fossil fuels, with an exemption for butane gas. Simulations conducted during the study indicate that such a measure could lead to a substantial decrease in CO₂ emissions.
For instance, an initial tax of $8 per tonne of CO₂ could result in a reduction of 0.2 million tonnes of emissions. By raising this tax to $50 per tonne, the potential reduction could reach 1.2 million tonnes.
Ivorian authorities recognize that this reform may initially lead to higher fuel prices and exert some pressure on economic growth. To mitigate these effects, the government plans to establish a mechanism for reallocating the funds collected through this tax.
Recycling Revenue for Household Support and Green Transition
The funds generated by the carbon tax will be prioritized for financing universal access to electricity throughout the country. A portion of this revenue could also be used to subsidize gas or solar cookstoves, helping to reduce dependence on charcoal.
The plan also includes direct assistance for the most vulnerable households, as well as funding for the creation of green jobs and professional retraining programs in sectors affected by the ecological transition.
Furthermore, the strategy incorporates incentives for low-emission vehicles, including tax advantages, specific exemptions, and the deployment of necessary infrastructure, such as charging stations.
A Phased Implementation Strategy
The application of this strategy will be rolled out gradually from 2026 to 2035. The first phase, from 2026 to 2027, will be dedicated to establishing the required legal, institutional, and technical framework.
The second phase, spanning 2028 to 2029, will mark the concrete implementation of the carbon tax, starting with a measured initial rate. Finally, the third phase, extending to 2035, will involve the gradual consolidation of the mechanism, followed by a period of evaluation and adjustment.
Through this comprehensive approach, Côte d’Ivoire aims to harmonize its economic growth with social justice and environmental protection, thereby responding to the global climate emergency.
