Background
As climate change and its associated impacts continue to surge, countries seek to explore holistic and cost-effective solutions to reduce the emissions of greenhouse gases (GHG). Carbon pricing is one of the prominent policy instruments being largely promoted in many countries as a cost-effective tool for curbing GHGs worldwide in recent years.
In this study, carbon pricing explicitly refers to carbon tax and emission trading system (ETS):
- A carbon tax involves levying a fee based on the quantity of greenhouse gases emitted.
- An emission trading system (also known as cap-and-trade) establishes a maximum threshold (a cap) for overall emissions and permits companies to trade emission allowances.
The surge in interest in carbon pricing has happened as countries have developed Nationally Determined Contributions (NDCs) under the Paris Agreement. They are in search of cost-effective solutions to achieve their GHG emissions reduction targets and more broadly to achieve low carbon growth, in line with Long-Term Low Emission Development Strategies.
Although such instruments have a history of being utilized by developed economies, their effectiveness and benefits have encouraged developing countries across the globe to explore and adopt carbon pricing to limit their GHG emissions.
Despite the opportunities promised by carbon pricing to regulate GHG emissions, the potential of climate-smart fiscal policy tools is not often considered by African countries' climate governance frameworks.
Scope of the study
- Take stock of carbon pricing initiatives in the West African region
- Assess potential opportunities for carbon pricing in the region, based on national circumstances and context
- Assess market drivers that can potentially create need for carbon pricing measures
- Assess domestic arrangements and critical infrastructure for the implementation of carbon pricing in West African countries
Download the report
A Synthesis Report: Carbon Pricing Approaches in West Africa.
