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Ministry of Finance is developing a National Green Taxonomy to optimize climate finance by guiding environmentally beneficial investments. As part of the Inclusive Green Economy program, civil servants are receiving training on green policies and environmental taxes, including proposals to integrate carbon credits and renewable energy into Uganda’s development plans.

The Climate Finance Unit at Uganda’s Ministry of Finance is currently developing a National Green Taxonomy aimed at guiding the effective utilization of climate finance.

A National Green Taxonomy is a classification framework that identifies investments and activities contributing to environmental objectives. By assisting investors in targeting projects with positive impacts on climate, environment, and social issues, green taxonomies play a crucial role in addressing environmental challenges.

Dr. Peter Babyenda, a Policy Engagement Specialist for the Inclusive Green Economy (IGE) program and lecturer at Makerere University’s School of Economics, highlighted Uganda’s implementation of some environmental taxes as a positive step toward environmental protection.

Together with Makerere University lecturer Dr. John Sseruyange, Dr. Babyenda facilitated a retreat for civil servants involved in the IGE program. This capacity-building initiative, funded by the Swedish International Development Cooperation Agency (Sida) through the Environment for Development (EfD) Global Hub at the University of Gothenburg, aims to strengthen the skills of senior civil servants.

During the retreat, Dr. Babyenda discussed various green economy issues, including existing taxes such as the environmental levy on older vehicles.

“This tax aims to reduce pollution and discourage the importation of older cars; however, it has primarily served as a revenue source rather than meeting its intended objectives,” he stated.

Proposal for Carbon Credits

Dr. Babyenda advocated for the introduction of carbon credits or a carbon tax as additional measures to mitigate carbon emissions. A carbon tax, a specific type of environmental levy, is charged based on the carbon content of goods, designed to lower greenhouse gas emissions by increasing the cost of fossil fuels.

Environmental taxes, which target activities with adverse environmental impacts, are financial charges imposed on polluters to generate revenue while reducing environmental harm. Examples of environmental taxes include levies on noise pollution, waste management, and emissions to air and water.

On Friday, October 25, 2024, IGE fellows gathered at Glory Summit Hotel in Hoima City to assess the progress and achievements of the IGE capacity-building program since its inception in 2021.

Dr. Babyenda noted that the knowledge and insights gained through training and peer exchanges have equipped fellows to apply these lessons in their work, including contributing proposals for the upcoming National Development Plan IV.

“We can make Uganda green without leaving anyone behind. That is the essence of an inclusive green economy,” he stated.

During the discussions, the fellows shared their advocacy efforts for incorporating IGE proposals into the National Development Plan IV, emphasizing renewable energy solutions such as solar power and mini-grids in remote rural areas. The civil servants gained valuable knowledge about the green economy, which they are now applying in policy development and their everyday responsibilities.

Dr. Sseruyange encouraged the fellows to collaborate with researchers in the green economy field and to partner with institutions and organizations focused on environmental protection and sustainability.