With the introduction of carbon tax, Malawi will become the third country in the Sadc Region to take the route of carbon pricing as one way of reducing its carbon footprint. The other countries are Zimbabwe and South Africa.
Although our carbon footprint is negligible, we nonetheless bear the biggest brunt of global warming. Talk about persistent flooding; unbearable heat waves; siltation in the Shire River; electricity load shedding etc. All these are after effects of the climate change monster coming as a result of greenhouse gas emission from mainly the developed world. This is why some countries from the developing world are beginning to take up initiatives towards mitigation and adaptation to climate change, including coming up with innovative ways of raising resources to support green projects.
For example, the green bond market is now pretty advanced in South Africa and beginning to take root in other African countries such as Nigeria and Kenya. Organisations are able to raise funds through issuing of green bonds to fund specific green projects or to scale up climate adaptation efforts. The issuers are required to disclose the type of green project(s) they are financing and to submit all information to relevant independent agencies for monitoring purposes.
When he announced the introduction of carbon tax, Minister of Finance, Economic Planning and Development Joseph Mwanamvekha said the aim is “to broaden our tax base” which apparently is very narrow. By that, it means the promotion of green environment is a secondary objective. The minister defended this position saying government is already doing enough to fight climate change. To him it is okay for government to collect funds under the alias of financing green projects and to use it for a different purpose as long as “we are already doing enough to fight climate change”. Now this is a problem.
The concept of carbon tax is meant to exclusively de-motivate greenhouse gas emission into the environment. It is a ‘green tax’ in that it promotes a green, sustainable and safer environment. A comprehensive compendium linking ‘green tax’ to ‘green projects’ must therefore be made available for the public to know the type of green projects that are benefiting from funds harvested as ‘carbon tax’.
It is morally wrong and pure cheating to collect ‘green tax’ without a corresponding profile of direct beneficiaries in green projects. In marketing, making false claims about promoting green projects and a sustainable environment when you are not is greenwashing, also known as cheating. In other ways it is window-dressing aimed at blindfolding stakeholders that you are engaged in green efforts when the opposite is true. What government did to introduce ‘carbon tax’ is a very positive development, but it spoiled the party the next moment when the minister said the purpose of the tax is merely to broaden the tax base.
There ought to be an independent ‘green directorate’ whose mandate should be to monitor, and track funds raised through this carbon pricing mechanism to ensure that they are tied to sustainable green projects. The idea of using the Malawi Revenue Authority (MRA) as a vehicle for collecting carbon tax must also be interrogated. In as much as MRA is the principal government agency for collecting taxes, it may not be wholly competent on issues of ‘green taxes’.
Apart from this, the history of MRA is also not inspiring, particularly about its vulnerability to partisan politics. Collecting carbon tax and depositing the funds in Account Number One is a bad idea because chances of the money getting lost in the maze of Capital Hill are very high, and of ending up in the bottomless pockets of political fat cats are even higher.
In South Africa and Zimbabwe, carbon tax is mainly collected from petroleum products. It helps to shift the burden of environmental damage back to those who are responsible for it. The timing of this tax is also not good. How do you introduce a badly communicated; badly conceptualised; badly constituted tax regime at a time when the country is erupting all around due to political unrest? Yes, the tax idea is good but the whole implementation framework ought to be comprehensively reworked quickly.