Project Info
Project Description
Environment and Sustainability focuses on evidence that addresses climate change, natural resource management, and sustainable development. Interventions promoting environmental protection, resilience, and equitable growth, support decision-makers to design and implement policies that balance ecological sustainability with social and economic priorities. The aim is to understand what works to protect ecosystems, build resilience, and promote equitable growth.
Through rigorous evidence synthesis, this theme supports decision-makers in designing policies and programs that balance ecological integrity with social and economic priorities. It highlights interventions that foster environmental protection, responsible resource use, and climate adaptation.
By connecting knowledge across disciplines and regions, the theme contributes to a more informed and integrated approach to sustainability—one that recognises the interdependence of people, planet, and prosperity.
Carbon Pricing Interventions in East Africa: A Rapid Evidence Assessment
FUNDER: FCDO
Background
Carbon pricing assigns a cost to CO₂ emissions, accounting for their environmental and economic impacts, such as climate change and health risks. This policy aligns with the “polluter pays” principle, ensuring polluters bear the costs of emissions. Imposing a fee or tax reduces carbon-intensive product output and encourages a shift to cleaner energy sources. The policy’s effectiveness depends on market elasticity and the reinvestment of tax revenues into renewable energy and social programmes. While carbon pricing increases the cost of emitting goods, prompting producers to minimise waste and lower production, the financial burden is shared between consumers and producers based on their sensitivity to price changes.
Approach
The rapid evidence assessment (REA) on carbon pricing interventions in East Africa examines the effectiveness of direct and indirect carbon pricing interventions in reducing carbon emissions and their socio-economic impacts. It also explores barriers to implementing these interventions and offers practical recommendations for policymakers. We utilised a comprehensive search strategy, gathering studies from diverse sources, which resulted in 16 records being included. A meta-analysis of 12 studies was conducted, synthesising 119 effect sizes to evaluate the effectiveness of carbon tax interventions.
What we found
The studies, which focused on a few countries in East Africa, including Uganda, Kenya, Tanzania, and Ethiopia, revealed that carbon pricing interventions in the region effectively reduce CO₂ emissions and generate significant revenue. However, their impacts on energy consumption, income distribution, and GDP are modest and context-dependent.
Six studies examined the impact of carbon pricing on CO₂ emissions and found a large decrease, suggesting that these interventions effectively reduce greenhouse gases. Three studies explored the effect of carbon pricing interventions on revenue generation and reported large increases in revenue, indicating that these interventions can significantly boost government revenue. Two studies investigated the distributional impact of carbon pricing, revealing a moderate and positive effect, indicating that carbon pricing interventions may help reduce income inequality by having a progressive effect, benefiting lower-income groups more than higher-income groups. The impact on GDP is slightly negative, indicating limited economic growth benefits, while the effects on income and expenditure are small and positive but statistically insignificant. Five studies focused on energy consumption, showing a small negative overall effect, indicating a modest reduction in energy use.
The two process evaluations provide key insights into overcoming barriers to carbon pricing in East Africa. They emphasise the importance of targeted revenue allocation to increase public support, enhanced institutional coordination, and mobilised funding and expertise to implement carbon pricing strategies effectively.
Most of the studies reviewed were rated with medium confidence, and there was substantial variability in studies on carbon pricing. This highlights the need for standardised research methods and explicit assumptions.
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Lead Author – Dr Ashrita Saran
