The Acceptability of the Use of Carbon Taxes for Climate Change Mitigation in Kenya: a Political Economy Assessment

Abstract

Sustainable economic growth in Kenya is threatened by her vulnerability to climate change. Incidentally, the major contributors to Gross Domestic Product growth in Kenya are also the highest greenhouse gas emitters. This raises questions on the efficiency of the current models to foster long-term prosperity and green growth to achieve Vision 2030. A policy that would put an appropriate price on carbon can therefore be considered as a viable solution to decouple emission growth from economic growth. Empirical research data for the same in various countries build the case for a well-designed carbon tax, the essence of which is to provide an incentive for the polluters themselves to find the best way to reduce emissions, rather than having a central authority determine how pollution reduction should be done. A political economy approach of analysis was taken to investigate the acceptability of a carbon tax introduction in Kenya within the existing regulatory and institutional framework for climate change mitigation. Extensive policy document review was conducted and structured interviews were performed to gather expert opinions on the carbon tax acceptability within the existing national circumstances of the country. A comprehensive stakeholder analysis was used to determine beneficiaries and non-beneficiaries and map out interests and influences that would determine successful implementation. A PESTELI (Political, Economic, Socio-cultural, Technological, Environmental, Legal and Industrial) framework analysis was used to draw out specific external factors that would influence policy uptake. It was found that hesitation in acceptability was derived from the lack of sufficient information available on policy operations and subsequent impacts both of which can be addressed by comprehensive impact analysis and full engagement of all stakeholders. Transparency of fiscal objectives the policy is aimed at achieving in the design and formulation stages is necessary to enhance acceptability. The perception of unfairness in the choice of taxation as a suitable carbon dioxide pollution regulator was mollified by the suggestion that revenue reimbursement will be earmarked to green spending. A mixed approach policy was recommended.