Pollution: Morocco is not among major carbon emitters, according to OECD

Morocco is only one of the major carbon emitters, according to a new report by the Organisation for Economic Co-operation and Development (OECD) on energy consumption and sustainable development in fifteen emerging and developing economies, unveiled Monday.

Entitled โ€œTaxing Energy Consumption for Sustainable Development: Opportunities for Tax Reform and Energy Subsidies in Selected Emerging and Developing Economiesโ€, the report examines energy taxation in Morocco, Cรดte dIvoire, Egypt, Ghana, Kenya, Nigeria and Uganda, Philippines, Sri Lanka Lanka, Costa Rica, Dominican Republic, Ecuador, Guatemala, Jamaica and Uruguay.

โ€œNone of them are among the big carbon emitters,โ€ said the OECD, in a statement, while welcoming the fact that all of these countries โ€œhave shown an interest in tax and energy subsidies reform by participating in the Coalition of Finance Ministers for Climate Action or the Coalition for Leadership on Climate Action. carbon pricing, or recent reforms.โ€

The report notes that developing countries could raise badly lacking government revenues and at the same time reduce emissions and air pollution by making better use of energy taxes and reducing fossil fuel subsidies.

It also notes that well-designed energy and carbon taxes can support efforts to improve domestic revenue mobilization.

While revenue potential varies across countries, it appears that those examined in the report could raise on average about 1% of GDP in government revenues if they apply a carbon pricing on fossil fuels of EUR 30 per tonne of CO2, notes the Paris based international organisation.

โ€œReform of energy taxation and subsidies is key to achieving the triple objective of decarbonization, domestic resource mobilization and access to affordable energy,โ€ it is stressed, noting that at a time when developing and emerging economies must fight to get out of the Covid-19 crisis with far fewer tax revenues than advanced economies, they have an โ€œinterestโ€ in introducing better designed energy taxes and targeted support measures for small households.

In the 15 countries surveyed, the tax/GDP ratio is on average only 19%, compared to 34% in the OECD, the report notes, noting that โ€œnone of them apply explicit carbon pricingโ€.

In four of the fifteen countries, the cost of energy subsidies is even higher than the product of energy taxes.

According to the report, a decrease in subsidies, which tend to benefit rather affluent consumers, and better tax design could provide additional revenue, allowing for more targeted aid to improve access to energy and make it more affordable.

In the 15 countries surveyed as a whole, 83% of energy-related CO2 emissions are exempt from taxation. In the 44 OECD and G20 countries studied in the Taxing Energy Use 2019 report, some 70% of these emissions are fully tax-exempt, indicating that โ€œall countries need to better take into account the adverse effects of energy consumption in tax policy.โ€