CARBON TAXATION, RENEWABLE ENERGY ADOPTION AND SOCIO ECONOMIC DEVELOPMENT: THE NEED FOR AN INTEGRATIVE APPROACH

The escalating risks and disastrous consequences of the rapid increase in carbon emission over the years has prompted international organisations including the United Nations and the World Health Organisation to advocate for nations to adopt carbon emission reduction policies such as carbon tax and renewable energy adoption. However, for developing countries, the pathway to achieving low to zero carbon emissions has been challenging as these nations contend with limited fiscal capacities, institutional weakness and competing socio-developmental priorities. This paper is a desk-based review of literature with the objectives of examining whether carbon taxes engender the adoption of renewable energy in developing countries that are also faced with the challenge of poverty alleviation, and analyze how developing countries balance environmental sustainability through carbon taxation and renewable energy adoption without undermining socio-economic development. This paper recommends that low-income countries adopt harmonious and inclusive approaches that enable them achieve their carbon emission targets without compromising socio-economic development by appropriately re-cyclyng carbon tax revenue, integrating, mapping and analyzing policies, and application of ex-ante simulation modelling.