Carbon tax: Kenya to charge motorists ‘traffic jam fee’ to curb emissions

Under the plan, the government seeks to introduce a fee on automobiles driven in zones marked as heavy traffic areas

By Tony Malesi
Published: Friday 24 February 2023
Nine out of 10 people in Kenya’s major cities and key towns are exposed to air pollution beyond the global health standards set by WHO. Representative photo: iStock.__

Motorists in Kenya will soon start paying a traffic congestion charge as part of the government’s plan to reduce carbon emissions if a proposal from the treasury to protect the environment is adopted.

Manufacturers with production plants that emit carbon significantly are also targeted. Such units will be slapped with a new tax for every tonne of carbon emitted.

Also read: Ghana wants fewer polluting old cars on the road. But it’s going about it the wrong way

The move is part of government efforts to reduce air pollution and traffic jams amid rising global concerns about climate change, according to a policy document from the country’s finance ministry.

Under the plan, the government seeks to introduce a ‘traffic jam fee’ on automobiles driven in zones marked as heavy traffic areas like Nairobi’s Central Business District and other major cities and towns like Mombasa, Kisumu, Nakuru and Eldoret.

“The government is exploring and developing a congestion charging scheme in major cities in a bid to protect the environment and as a source of revenue for greening the energy sector, among others,” read the document titled The National Green Fiscal Incentives Policy Framework.

In 2021, the World Health Organization (WHO) estimated 19,000 people die each year in Kenya due to air pollution. Some 70 per cent of pollution levels is recorded in the capital city, Nairobi, noted United Nations Environment Programme (UNEP).

Besides exacerbating the climate crisis, nine out of 10 people in Kenya’s major cities and key towns are exposed to air pollution beyond the global health standards set by WHO.

This trend threatens the global economy. It is slowly but surely reducing life expectancy through chronic diseases such as asthma and impacting the developmental potential of unborn babies. 

Also read: Why we need better data on clean fuel coverage to tackle air pollution

Kenya’s minister for energy committed to a carbon reduction of 32 per cent by 2030 at the 27th Conference of Parties (COP27) to the United Nations Framework Convention on Climate Change, promising a raft of measures to encourage clean energy transition.

The country is following in the footsteps of South Africa, developed countries and major cities across the globe that have introduced or are planning to unveil the traffic congestion charge.

New York City, which has the most congested traffic jams in the US, will become the first major global city to introduce the traffic jam charge after London, which introduced it in 2003. New York plans to introduce a congestion charge of up to $23 per day, while London charges a fee of £15 per day.

The move is coming amid environmental complaints that Kenya has been importing too many ‘old’ cars, which are now a major contributor to air pollution in major cities. Official data and statistics show the country’s registered vehicles more than doubled in the last five years to 4.35 million in 2021.

The Kenyan government believes the carbon tax, which has been gaining traction worldwide, is a perfect catalyst for hastening the switch to clean energy.

This will also promote the ‘polluter-pays-principle,’ where polluters are made responsible for bearing the costs of managing or preventing resultant environmental damage.

Also read: Improving mobility for clean air: Why cities fall short of their goals

Businesses must be responsible or be slapped with a carbon tax for excessive greenhouse gas emissions. Such tax will be levied per tonne of carbons emitted, stated the treasury document.

“We plan to explore the viability and design of a carbon tax because this will both cost-efficiently reduce greenhouse gas emissions, health complications and provide a revenue stream to help the government meet its broader financial objectives,” the document added.

The ministry believes correct carbon pricing will send the right signal to markets and private investors and force them to go green in all their endeavours.

The initiative is at its final planning stages and what now remains is to design the carbon tax in the national budget and make decisions on the rates, who will pay and how to allocate the revenues raised in future.

Across the world, more than 40 governments have implemented some form of carbon tax. In Africa, only South Africa has a similar programme. The country charges R46 for every tonne of carbon emitted. Ethiopia, like Kenya, is planning a similar programme to fight against air pollution.

Carbon taxes in developed countries are slightly high and range between approximately $25-$100 per tonne of emission. In 2020, China, the world’s largest and most notorious emitter, pledged to reduce its carbon emissions to near zero around 2060.

Also read: 70 years on from London’s Great Smog, we still need cleaner air to protect health

Between 2022 and 2030, Kenya’s total greenhouse gas emission from electricity generation, forestry, energy demand, agriculture, transportation, waste and industrial processes is projected to increase to 100 or 143 million tonnes of carbon dioxide.

In 2030, experts projected the highest amount of toxic emissions would come from electricity generation, followed closely by agriculture and transportation.

Kenya’s finance ministry is concerned that investors are quickly shifting to clean assets and the country, which is an anchor state in the region, risks reducing its attractiveness to foreign direct investment (FDI).

Kenya is among the largest recipients of FDI across Africa, totalling $1.3 billion in 2019, according to a report by the UN Conference on Trade and Development.

The biggest share of FDI was directed to information and communications technology, healthcare and the extractive sector, especially oil exploration and production. Almost a third was put into climate-related investments, mostly in the renewable energy sector.

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