Senegal submitted its Nationally Determined Contribution at the beginning of this year 2021 and in an effort to safeguard the global commons, the country identified carbon pricing as one of the instruments to consider in reducing GHG emissions.
Through the Collaborative Instruments for Ambitious Climate Action (Ci-ACA) which aims ‘to assist Parties in the development of carbon pricing approaches for implementing their Nationally Determined Contribution (NDC) under the Paris Agreement and foster Cooperation’; Senegal was the first country in the sub-region to be assisted through capacity-building workshops, national consultations and analytical assessment on country specific options for the adoption of carbon pricing instruments in the first phase of the initiative which ran from 2017 to the first half of 2019.
Through that initiative, RCC Lomé funded a consortium of consultants to conduct a study on the opportunity for introducing carbon pricing at the domestic level in Senegal. The Senegalese and international experts identified a carbon tax, particularly on large greenhouse gas emitters, as the most appropriate instrument. The possibility to apply a carbon tax jointly with the use of emission reduction units was also considered. A preference for a revenue-neutral carbon tax was expressed. The following sectors were identified as priorities for the application of a carbon tax: Electricity generation; Heavy industry, including cement manufacturing; The oil and gas sector; Solid and liquid waste.
Based on this study and the results of the validation workshop, various activities are being undertaken with various stakeholders to help Senegal assess risks and opportunities in implementing carbon pricing instruments.
With the second phase of the initiative which began in September 2019, Senegal is being supported through a consultancy study on carbon tax. This follow-up in-depth study will focus to develop a detailed proposal and assess the risks and opportunities from the introduction of carbon pricing, identify and address potential risks regarding economic competitiveness.
The study was launched on December 23rd, 2020 through a virtual inception workshop and several meetings and consultations with stakeholders are being conducted. In addition, consultants have been laying the groundwork for modelling and much background research and preparation are already complete.
The virtual workshop on the development of scenarios took place on March 30th, 2021 and brought together stakeholders from various backgrounds and sectors including government officials, ministry representatives and private sectors to identify the best carbon tax scenario that works best for Senegal. The Government of Senegal was represented by the Chief of staff of the Ministry of Environment and Sustainable Development who opened the workshop.
Several scenarios were suggested by consultants with the one of a carbon tax with poverty reduction drawing the most interest because poverty reduction is one of the Senegalese government’s goals. Through this scenario, the carbon tax collected will be given back to poor households while aiming at attaining the universal access to energy.
Carbon pricing is a straightforward approach for addressing GHG emissions as it puts a price on carbon creating an incentive for investments into more climate friendly solutions. This second phase of the CIACA initiative has been focusing on three main pillars: ‘deepening’ which builds on recommendations from the first phase; ‘fostering regional collaboration’ and ‘expanding to new countries’ among which Ghana and Nigeria.
The initiative led by the Mitigation Division at the UNFCCC Secretariat is implemented through the UNFCCC Regional Collaboration Centres.
