Drivers will be Charged Daily Congestion Fee,Fight Against Pollution

If a government proposal to safeguard the environment is implemented, drivers will pay a traffic congestion charge and businesses would be punished with a new levy for every tonne of carbon generated from their facilities.

In an effort to reduce traffic jams and air pollution, the Treasury revealed its plans for the daily variable toll in a policy document made available to the public on Tuesday.

According to the plan, the State is pushing for the implementation of a congestion charge, which would be levied on vehicles traveling through regions designated as having significant traffic, such the central business district.

A new carbon tax will be imposed on businesses, particularly manufacturing facilities, to incentivize them to reduce emissions.

Kenya will adopt the traffic congestion fee in the same way as significant cities that have already done so or are planning to do so.

After London, which implemented the fee in 2003, New York, which has the US’s worst traffic, will be the first significant city to do the same.

The US city will introduce a congestion charge of up to $23 (Sh2, 863) a day late while London charges a fee of £15 (Sh2, 300) per day.

“The government will explore the development of a congestion charging scheme in the cities, as a source of revenue for greening the sector,” says the document labelled the National Green Fiscal Incentives Policy Framework.

The amount of the congestion fee that will be levied on drivers in urban areas like Nairobi, Mombasa, Kisumu, Eldoret, and Nakuru is not indicated in the Treasury document.

According to official figures, Kenya had 4.35 million registered automobiles in 2021, more than doubling from the previous five years.

The Treasury believes that a carbon price, which is becoming more popular around the world, will expedite the transition to sustainable energy and advance the “polluter pays” principle, which mandates that polluting companies pay for managing or preventing environmental damage.

An example of a fine that firms must pay for excessive greenhouse gas emissions is a carbon tax. Typically, this tax is assessed per tonne of carbon dioxide released.

“Recognising the ability of carbon taxes to both cost-efficiently reduce greenhouse gas emissions and also to provide a revenue stream that can be used to meet broader government objectives, the government will explore the viability and design of a carbon tax in Kenya,” says the Treasury.

“Correct carbon pricing will send a right signal to markets and private investors which is pivotal in creating an enabling environment for private investment.”

The budget’s carbon tax will need to be designed, its rate will need to be determined, who will be required to pay it, and how the money earned will be distributed, according to the Treasury.

Globally, more than 40 nations have put in place some type of carbon pricing.

Locally, South Africa has enacted a carbon tax of R46 (Sh330) per tonne of carbon emissions, and Ethiopia is considering a similar measure.

Richer nations often impose a carbon tax of around $25 (Sh3, 100) per tonne of emissions, with some reaching as high as $100. (Sh12, 450).

According to the Treasury, Kenya will look into ways for businesses to lower their carbon tax obligations by acquiring offsets from domestic forestry projects through an emissions trading market.

China, the greatest carbon emitter in the world, made a commitment in 2020 to bring carbon emissions to zero by 2060.

Between 2022 and 2030, Kenya is expected to produce between 100 and 143 million tons of carbon dioxide in total as a result of forestry, electricity generation, energy use, transportation, agriculture, industrial operations, and trash.

The production of energy would emit the most emissions in 2030, closely followed by transportation and agriculture.

According to the Treasury, investors are quickly switching from risky to safe investments, and Kenya runs the risk of losing its appeal to foreign direct investment (FDI).

In 2030, emissions from energy production would be the highest, followed by agriculture and transportation.

Kenya runs the risk of losing its appeal to foreign direct investment as investors quickly transition from risky to safe projects, according to the Treasury (FDI).