Carbon Taxation in Africa

As a policy design option, carbon taxes can be employed at the upstream or at the downstream level. Downstream carbon taxes adopt a sectoral approach to the pricing of carbon, to the extent that they only capture the externalities associated with the industries enumerated in the law foreseeing such regimes. The reach of these measures is, therefore, narrower, if compared to an upstream carbon tax, and the revenue resource mobilization potential is also more restrained.