Making Green Tax Incentives Work: Protecting Revenue While Accelerating the Energy Transition

Governments are increasingly relying on a mix of fiscal, regulatory, and trade and investment measures to drive the green transition, often as part of broader industrial strategies. Among these, green tax incentives have emerged as a key instrument.

The use of green tax incentives raises important questions of policy coherence, effectiveness, and accountability. Recent analysis by IISD indicates that many emerging and developing economies are adapting tax policies to support clean investment and renewable energy deployment. In low-income contexts facing administrative and fiscal constraints, tax incentives may sometimes be perceived as a more feasible option than alternative support mechanisms such as feed-in tariffs. However, poorly designed incentives can also generate revenue losses, fail to attract investment, and opportunities for rent-seeking underscoring the importance of governance, targeting, and monitoring.

International experience suggests that incentives are most effective when embedded within a coherent and mutually reinforcing policy framework. A recent paper on industrial decarbonisation by the Council on Economic Policies (CEP) highlights that such incentives must be aligned with regulatory certainty, sectoral priorities, and robust governance to achieve meaningful emissions reductions. Aligning incentives with national development objectives can further ensure that the green transition strengthens competitiveness, supports industrial upgrading, and expands access to clean energy in an inclusive manner.

In this context, Addis Tax Initiative (ATI), IISD, and CEP convene partner countries and other stakeholders in this session to explore how green tax incentives can deliver maximum impact when integrated into a coherent policy architecture aligned with other instruments such as carbon pricing, performance standards, and wider industrial strategies.

The webinar will highlight the importance of cross-government coordination, bringing together ministries of finance, climate and energy policymakers, and industrial strategy institutions to support the design and implementation of targeted incentives that deliver emissions reductions alongside jobs, competitiveness, and economic development.

The discussion will address three main themes:

1. When and how can green tax incentives support low-carbon and resilient growth while protecting revenue?
2. How do incentives interact with other instruments (e.g., carbon pricing, standards, public finance, and investment policy), and what coordination is needed across government?
3. What lessons can be drawn across country contexts, including differences in incentive design and implementation capacity between high-income and low- and middle-income countries?

The event will take place virtually on June 2, 2026, from 13:00 to 14:30 CEST. The webinar will be delivered in English with simultaneous interpretation in French. Register here by June 1.

The full agenda can be found here.