Côte d’Ivoire sets bold carbon tax plan for cleaner future

Côte d’Ivoire unveils groundbreaking carbon tax strategy to slash emissions

Côte d’Ivoire is poised to revolutionize its environmental policy with a pioneering national strategy aimed at implementing carbon taxation. Spearheaded by the Ministry of Economy, Finance and Budget, this ambitious initiative seeks to curb greenhouse gas emissions while accelerating the transition toward a more sustainable economy.

Confronting climate and economic challenges head-on

The newly unveiled strategy highlights a stark reality: Côte d’Ivoire’s robust post-Covid economic growth has come at an environmental cost. Between 1990 and 2024, the country’s carbon intensity surged from 0.15 to 0.18 tonnes per thousand dollars of economic output. This alarming trend stems from heavy reliance on fossil fuels, rapid industrialization, expanding transportation networks, and emission-heavy agricultural practices.

Climate change poses a direct threat to the nation’s economic stability. Rising temperatures, erratic rainfall patterns, and escalating environmental risks are already wreaking havoc on critical sectors—particularly agriculture, which remains the backbone of employment and GDP in Côte d’Ivoire.

Aligning with global climate commitments

This carbon tax initiative 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 slash greenhouse gas emissions by 33.07% independently, and up to 74% with international support, by 2035.

The strategy also aligns with key reforms negotiated as part of the International Monetary Fund’s Resilience and Sustainability Facility (RSF). A tailored carbon pricing mechanism, designed to fit Côte d’Ivoire’s unique economic and social landscape, stands at the heart of this transformative policy.

Building on existing environmental levies

Côte d’Ivoire already employs several fiscal instruments targeting environmental protection, including taxes on petroleum products, targeted environmental levies, and royalties in the forestry and mining sectors.

However, these measures have primarily served as revenue streams rather than incentives for low-carbon transitions. The new carbon tax strategy aims to shift this dynamic, compelling businesses and households to adopt greener alternatives through stronger economic signals.

A progressive and socially conscious carbon tax

The proposed carbon tax will primarily target fossil fuels, with liquefied petroleum gas (LPG) excluded to safeguard access for vulnerable households. Modeling suggests substantial emission reductions are achievable. For instance, an initial levy of $8 per tonne of CO₂ could cut emissions by 0.2 million tonnes, while scaling up to $50 per tonne may yield reductions of up to 1.2 million tonnes.

The government acknowledges potential short-term economic trade-offs, including higher fuel prices and modest growth pressures. To mitigate these effects, it plans to recycle tax revenues into targeted social and environmental programs.

Reinvesting carbon revenues for inclusive green growth

Proceeds from the carbon tax will prioritize universal electricity access across Côte d’Ivoire. Additional funds may subsidize gas or solar cookstoves, reducing reliance on charcoal and easing pressure on forest resources.

The strategy also includes direct financial support for low-income households, investments in green job creation, and retraining programs for workers in sectors most affected by the ecological transition. Incentives for low-emission vehicles—such as tax breaks, exemptions, and expanded charging infrastructure—are also part of the plan.

Phased rollout for long-term success

The implementation of this carbon tax strategy will unfold in three distinct phases. From 2026 to 2027, the focus will be on establishing the necessary legal, institutional, and technical frameworks. The second phase, from 2028 to 2029, will see the gradual introduction of the carbon tax at a modest initial rate. The final phase, running through 2035, will focus on consolidation, evaluation, and fine-tuning of the mechanism.

Through this comprehensive approach, Côte d’Ivoire aims to balance economic prosperity, social equity, and environmental stewardship—addressing the urgent demands of the global climate crisis while securing a sustainable future for all.