In a continuous effort to explore creative financing options to develop Africa’s green economy, African Development Bank (AfDB) staff members attended training on environmental fiscal reform (EFR) between 4 and 6 October in Tunis, Tunisia. EFR refers to a range of taxation and pricing measures that governments can use to raise fiscal revenues while furthering environmental goals. Hosted by the Deutsche Gesellschaft fuer Internationale Zusammenarbeit (GIZ), the workshop explained the main elements of EFR (taxes, fees and subsidies), and how they can work together and with other financing instruments and mechanisms in a coherent way to achieve environmental and social impacts. Legal and governmental issues were discussed along with ways to identify windows of opportunity for EFR based on country needs. Trainers offered an action plan to trigger an EFR discussion process and subsequent implementation of EFR policy and instruments.
EFR includes the reduction and/or restructuring of environmentally harmful subsidies, as well as taxes on natural resource exploitation, low resource efficiency, or pollution. EFR have the potential to directly address resource efficiency and environmental problems that threaten the livelihoods and health of the poor. It can free up economic resources or generate additional revenues to finance access of the poor to water, sanitation and electricity services and restructure the economy towards higher resource efficiency and green development.