Thursday, February 22

Institute of Climate and Environmental Governance Raises Concerns Over Emission Levy Implementation

The Institute of Climate and Environmental Governance (ICEG) has expressed apprehension over the implementation of the emission levy, which came into effect on February 1, 2024. The institute raised concerns about the lack of clarity regarding the management of the potential revenues generated by the levy to support climate transition efforts.

ICEG acknowledged the economic impact the emission levy may have on motor vehicle owners, reducing their disposable income. Industries reliant on high-emission fossil fuels are also expected to experience increased operational costs. Despite these challenges, the institute emphasized the importance of the levy for Ghana’s energy transition agenda in achieving net-zero targets and aligning with environmental objectives and socio-economic well-being.

However, ICEG voiced its concerns about the government’s commitment beyond imposing the levy to invest the expected revenue in financing green infrastructure. The institute highlighted the absence of a stated portfolio in the Act for utilizing the revenue to support energy transition efforts, raising the risk of potential mismanagement and diversion of funds.

ICEG disagreed with the taxation approach on motor vehicles, buses, and coaches, arguing that different vehicles emit varying levels of CO2 based on factors such as the year of manufacture and maintenance regime. The institute proposed a progressive tax structure that considers the emission levels of vehicles, promoting equity and fairness.

Furthermore, ICEG recommended that the proceeds from the levy should not be deposited into the Consolidated Fund but rather into a dedicated Emission Fund. This approach, it argued, would establish a proper accountability mechanism to ensure the judicious allocation of funds generated. The institute also urged the government to implement the levy gradually, allowing time to establish necessary institutional infrastructure for effective implementation and revenue utilization.

ICEG encouraged the adoption of eco-friendly vehicles by instituting rebates and incentives for owners of low-emission vehicles. The institute’s recommendations aim to strike a balance between environmental sustainability, economic considerations, and social equity as Ghana embarks on its emission reduction initiatives.