Côte d’Ivoire launches ambitious carbon tax plan for green future

Côte d’Ivoire is taking a bold step forward in environmental policy with the unveiling of a groundbreaking national strategy focused on carbon emission taxation. Spearheaded by the Ministry of Economy, Finance and Budget, this ambitious initiative aims to curb the rise in greenhouse gas emissions while accelerating the transition to a more sustainable economy.

Addressing climate and economic challenges head-on

The strategic document reveals that the country’s robust economic recovery post-Covid has unfortunately led to a significant increase in carbon emissions. Between 1990 and 2024, Côte d’Ivoire’s carbon intensity rose from 0.15 to 0.18 tonnes per thousand dollars of GDP. This trend stems primarily from heavy reliance on fossil fuels, rapid industrial growth, expanding transportation networks and agricultural practices that generate substantial emissions.

Government officials emphasize the immediate economic threat posed by climate change. Rising temperatures, erratic rainfall patterns and escalating environmental risks are already severely impacting key sectors, particularly agriculture—a cornerstone of employment and GDP.

Aligning with global climate commitments

This reform underscores Côte d’Ivoire’s commitment to fulfilling its international climate obligations. Under its updated Nationally Determined Contribution (NDC 3.0), the country aims to cut greenhouse gas emissions by 33.07% independently, and up to 74% with international support, by 2035.

The initiative is also part of broader reforms agreed upon under the International Monetary Fund’s Resilience and Sustainability Facility (RSF). Developing a locally tailored carbon tax system represents a critical component of these efforts.

Building on existing environmental levies

The report highlights that Côte d’Ivoire already implements several fiscal tools aimed at environmental protection. These include taxes on petroleum products and energy, targeted environmental levies and fees in the forestry and mining sectors.

However, their primary function has been revenue generation, with limited impact on driving a low-carbon economy. The new strategy seeks to amplify the incentive effect of green taxation, encouraging both businesses and households to adopt more sustainable practices.

A progressive and socially conscious carbon tax

The upcoming carbon tax will primarily target fossil fuels, with butane gas exempted. Early modeling suggests this policy could deliver substantial reductions in CO₂ emissions.

For instance, an initial tax of $8 per tonne of CO₂ could cut emissions by approximately 0.2 million tonnes. Raising the rate to $50 per tonne could potentially reduce emissions by 1.2 million tonnes.

While acknowledging that the reform may initially push up fuel prices and exert slight pressure on economic growth, authorities plan to mitigate these impacts by reallocating tax revenues strategically.

Reinvesting tax proceeds for sustainability and equity

Revenue generated from the carbon tax will be prioritized for expanding universal electricity access nationwide. A portion of these funds may also subsidize gas or solar cookstoves, helping reduce dependence on charcoal.

The strategy includes direct support for vulnerable households, funding for green job creation and professional retraining programs in sectors affected by the ecological transition. Additionally, incentives will be introduced for low-emission vehicles, featuring tax benefits, targeted exemptions and the expansion of charging infrastructure.

Phased rollout for long-term impact

The strategy will be implemented in stages from 2026 to 2035. The first phase, covering 2026 and 2027, will focus on establishing the necessary legal, institutional and technical frameworks.

The second phase, from 2028 to 2029, will see the carbon tax take effect at a modest initial rate. The final phase, through 2035, will focus on gradual consolidation of the mechanism, followed by evaluation and fine-tuning.

Through this comprehensive approach, Côte d’Ivoire aims to balance economic growth, social equity and environmental stewardship, aligning with global climate imperatives.