Human relationship with the Earth is inseparable. The role of the Earth as a “Mother” has been in human mythology, religion and life for ages. That the earth has for long sustained and continues to sustain human life is, therefore, indisputable. This relationship of the humans and the Earth has always had a destructive side as human beings have used several of the earth’s resources to live on. More and more today, human economic activities are threatening the Earth’s ecosystem. This threat comes from the fact that the human population has continued to increase, placing increasing demands on natural resources for food, water, energy and space.
Technological advancements, including genetic modification, that humans have made, are becoming detrimental in causing pollution (of land, water and air), global warming, climate change, deforestation, acidic rain and Ozone layer depletion – all with very serious negative consequences in the immediate human environment, the global environment and also overtime. This brief, focuses on Africa’s predicament in dealing with the increasing environmental challenges.
Africa is generously endowed with vast natural resources, rich environments and good climate. These include renewable resources (such as water, forestry, and fisheries) and non-renewable resources (minerals, coal, gas, and oil). The natural resources in Africa dominate many national economies and are central to the livelihoods of the poor rural majority. They are the basis of income and subsistence for large segments of Africa’s population and constitute a principal source of public revenue and national wealth. With the right governance and policy framework, these resources can be important catalyst for growth and development. Sadly, there is evidence to suggest that Africa’s resources are being exploited, mainly for foreign interests. An overwhelming majority of Foreign Direct Investment (FDI) inflows to Africa go into natural resource exploitation. For instance, most of the FDI flows to Angola, Algeria, Sudan, Nigeria, and Gabon for the period 1996-2000 have been directed to oil and gas projects. Similarly, over 50 percent of the flows to South Africa and Tanzania have been going into gold mining. Indeed, the primary sector has been the largest recipient of accumulated FDI flows to Africa, with a 55 percent share. By 2006, about 64 percent of FDI was concentrated in resource-rich countries in Africa .
The reality is that the exploitation of these resources is done in the interest of foreign companies with the connivance of the African elite, with little regard for the environment, let alone the people. The multinational corporations (MNCs) that are engaged in these extractive industries aim to maximise profits . The environmental impact of these activities in the forms of soil erosion, pollution of the air, water and land resources, deforestation, have far reaching effects on the present and future generations.
In his encyclical letter Laudato Si, Pope Francis quotes from Pope Paul VI’s 1971 Pacem in Terris, the lamentation over the unchecked human activity. According to Pope Paul VI, the “ill-considered exploitation of nature, humanity runs the risk of destroying it and becoming in turn a victim of this degradation” with “a tragic consequence” for both humans and nature. This calls for more decisive action to save the planet and the immediate environment in which humans dwell. As the world considers the environmental challenges on which countries show disagreements in terms of their responsibilities and commitments, an increasing urgency arises in terms of the need to reduce the environmental damage. In Africa, this should still recognize the fact that the people and countries continue to rely on the resources of nature. As such there is need to minimize the harm to their livelihoods and economic activities.
A range of tools exist for governments to use to address these environmental challenges, ranging from regulations, information programmes, innovation policies, environmental subsidies and environmental taxes. This brief considers taxes as key in addressing the externalities arising from over-use of resources of nature. These environmental taxes have many important advantages, such as environmental effectiveness, economic efficiency, and the ability to raise public revenue. Again, environmental taxes can be used to address issues of waste disposal, water pollution and air emissions. With emphasis on profits, the markets fail to take environmental impacts into account by incorporating these impacts into prices. Environmental taxes become the best way to reduce the environmental “footprint” as they make businesses “pay” for these damages.
The way the environmental taxes are designed and how they are implemented needs to consider the costs and benefits, in order to be able to attain the expected overall success. As such, levying environmental tax should target the following: the polluting or destructive behaviour, be broad to cover the scope of the environmental damage and commensurate with it, and be credible and its rate predictable in order to motivate environmental improvements through its use. The environmental tax revenues can also contribute to consolidating the overall revenue mobilization and could help to reduce other taxes, like on low income households. Policies should appropriately take care of balancing the incidence of the environmental taxes vis a vis the use of the resources . In the spirit of Laudato Si, environmental taxes should consider the Earth and the need to renew it as it continues to take care of our human needs. Policies governing the levying of these environmental taxes should therefore be guided by ethical principles that value the renewal of the environment above the revenue mobilization interests.