Sunday, April 14, 2024

Green fiscal policies in climate change governance


Climate change is a pressing issue affecting Kenya today. This has posed a threat to the economy, environment and human well-being. Green fiscal policy is an important tool which seeks to use fiscal instruments to mitigate and adapt to climate change. The Green Fiscal Policy Framework aims to guide the Kenyan economy towards a green development path that is low in carbon emissions and resilient to climate change impacts by utilizing a range of fiscal instruments.

In order to mitigate climate change, green fiscal policy is essential. Reducing greenhouse gas emissions that cause global warming is essential. Using taxes and subsidies can encourage organizations and people to embrace greener technologies and lessen their carbon footprint. For instance, carbon taxes put a price on carbon emissions and encourage companies to use greener, lower-carbon technologies. They also provide income that governments can utilize to pay for climate change adaptation and mitigation initiatives.

The adoption of renewable energy sources including wind, solar, and geothermal power is one of the main goals of the green fiscal strategy. With more than 600 MW of installed capacity, Kenya is one of East Africa’s leading producers of geothermal energy. It has also made major strides in the development of wind and solar power. To promote the expansion of the renewable energy sector, the government has implemented a number of fiscal incentives, including tax exemptions and duty-free imports. In order to encourage investment in renewable energy projects, the government has also created feed-in tariffs, which offer fixed pricing to producers of renewable energy.

The promotion of energy conservation and efficiency is a key component of green fiscal policy. Energy is in great demand in Kenya, and it is anticipated that this need would rise sharply over the next few years. The government has established several fiscal policies to promote energy efficiency in order to solve this issue, including tax incentives for the use of energy-efficient technologies and the use of energy management systems. To further encourage consumers to select energy-efficient products, the government has introduced energy efficiency labelling programs that provide details on the energy efficiency of equipment and appliances.

The green fiscal policy strives to advance environmentally friendly transportation. Around 24% of Kenya’s overall emissions come from the transportation sector, which is a significant source of greenhouse gas emissions. To address this difficulty, the government has enacted several measures to promote sustainable transportation, such as tax incentives for the importation of hybrid and electric vehicles, the construction of mass transit networks, and the promotion of non-motorized transport.

The role of the green fiscal policy in climate change mitigation and adaptation in Kenya is not limited to the promotion of renewable energy, energy efficiency, and sustainable transportation. Aside from enacting taxes on deforestation and promoting sustainable agriculture, the government has also established economic measures to support sustainable land use practices. The government has also implemented financial measures to encourage adaptation to the effects of climate change, such as the creation of insurance programs for smallholder farmers and the promotion of infrastructure that is climate resilient.

Green fiscal policy has the ability to support Kenya’s efforts to mitigate climate change and adapt to it, but there are a number of issues that need to be addressed. Lack of resources and capacity to effectively implement and enforce green fiscal policies is one of the main issues. The lack of knowledge and comprehension of the advantages of green fiscal policies among stakeholders, including legislators, enterprises, and consumers, is another problem. It is crucial to enhance funding for stakeholder involvement, public education, and capacity building in order to solve these issues.

By increasing the resilience of communities and ecosystems, green fiscal policies are also essential for adapting to climate change. To help Kenyans better adapt to climate change, the government has established a number of green fiscal policies. Almost 70% of Kenya’s workforce is employed in agriculture, which is the country’s main industry. The government has implemented a number of initiatives, including the promotion of climate-smart agriculture, to increase the agricultural sector’s resilience to climate change. Climate-smart agriculture involves using farming methods that improve production, mitigate the effects of climate change and minimize GHG emissions.

In conclusion, the role of green fiscal policy in climate change mitigation and adaptation cannot be overstated. It provides the necessary incentives to encourage businesses and individuals to adopt cleaner technologies, reduce their carbon footprint, and adopt sustainable land use practices. As the effects of climate change become more severe, the Kenyan government needs to adapt to the changing environment. This can include investing in infrastructure that is more resilient to extreme weather events or providing support to communities that are most at risk. They can finance these efforts by use of taxes and subsidies.

Dr. Edward Mungai
Dr. Edward Mungai
The writer, Dr. Edward Mungai, is a global sustainability expert. He is the Lead Consultant and Partner at Impact Africa Consulting Ltd (IACL), a leading sustainability and strategy advisory in Africa. He is also the Chief Editor at Africa Sustainability Matters. He can be contacted via

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