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Researchers explore the potential of carbon taxation in Ghana and Nigeria

Researchers from EfD Ghana and EfD Nigeria are embarking on a project aiming to tackle climate change while fostering economic growth. Titled Understanding the Incentives and Obstacles to effective Carbon Tax Regimes in West African Countries, the project seeks to shed light on the incentives and hurdles surrounding carbon taxation in West Africa, with a specific focus on Ghana and Nigeria.  It is led by EfD Ghana’s Monica Lambon-Quayefio.

Carbon pricing, including mechanisms such as carbon taxes (which levy a fee on carbon emissions) and emission trading schemes (ETS, which involves trading permits to emit carbon), has long been recognized as a useful tool in the global fight against greenhouse gas emission. However, despite its potential, its adoption in Africa has been limited. The project aims to address this gap by examining the history of fossil fuel reforms, such as fuel subsidies, in Nigeria and Ghana. It seeks to understand carbon market registries in both countries, analyze the potential for carbon taxes, and identify strategies to enhance policy effectiveness.

"Effective carbon pricing is crucial for mitigating climate change and fostering sustainable development in West Africa. By bringing together stakeholders from Ghana and Nigeria, we aim to facilitate cross-country learning and pave the way for informed policy decisions," says Monica Lambon-Quayefio.

Facilitating policy engagement and shared learning

The project's primary aim is to facilitate knowledge exchange between policymakers and researchers regarding past fossil fuel reforms and carbon market regimes in Ghana and Nigeria. Ghana has successfully completed the deregulation of its downstream sector, whereas Nigeria has only just embarked on this journey and is grappling with the challenges stemming from the recent removal of fuel subsidies. Under the project, stakeholders in Nigeria will have the opportunity to draw lessons from Ghana’s experiences. Additionally, energy sector stakeholders from both countries will gain access to new research insights valuable for advancing the development of effective pricing schemes and strategies.

Beyond fostering dialogue between policymakers and shared lessons, the multi-country project also seeks to enhance collaboration among researchers. By leveraging expertise from multiple EfD centers, the project seeks to generate robust evidence tailored to the socio-economic contexts of Ghana and Nigeria. These anticipated benefits align with the objectives of EfD’s strategy to increase collaboration among countries to achieve better policy harmonization.

Researchers will strengthen capacity and networks

In addition to its societal impact, the project holds significant benefits for the participating researchers. Through engagements with policymakers and collaboration across borders, researchers will have the opportunity to expand their networks, enhance their policy engagement skills, and contribute to meaningful change in their respective countries.

"This collaborative effort underscores the importance of interdisciplinary research and cross-border cooperation in addressing complex environmental challenges. We hope that our findings will not only inform policy decisions but also contribute to building a more sustainable future," says Monica Lambon-Quayefio.

The project team also includes NwaJesus Anthony Onyekuru, Chizoba Oranu, Rexford Asiama, Ezebuilo Ukwueze, and Chinasa Onyenekwe of EfD Nigeria. It also draws on the expertise of other EfD researchers including Thomas Sterner of EfD Global Hub.


By Vicentia Quartey

News | 14 February 2024