The Use of Green Tax Incentives for Renewable Energy Deployment in Emerging and Developing Countries

The report examines the use of green tax incentives—such as income tax holidays and import duty relief—to address a USD 2.2 trillion annual investment gap in emerging and developing economies. It argues that while these tools can redirect capital toward climate-aligned projects, profit-based incentives often fail early-stage projects, and poorly designed measures can erode public revenue without generating meaningful investment.

• Emerging and developing economies face a significant annual investment gap of USD 2.2 trillion to fund the energy transition, with private capital predominantly flowing to mature, low-risk markets.
• Profit-based incentives are frequently insufficient for early-stage projects because companies may not yet be profitable; cost-based incentives are more effective at lowering risk and unlocking investment.
• Green tax incentives are most effective when integrated with complementary policies, including national energy plans, power purchase agreements, local content requirements, and affordable financing from development or public banks.

APA

Mataba,, K. (2025). The Use of Green Tax Incentives for Renewable Energy Deployment in Emerging and Developing Countries. International Institute for Sustainable Development. https://www.iisd.org/publications/report/green-tax-incentives-renewable-energy

Chicago

Mataba,, Kudzai. The Use of Green Tax Incentives for Renewable Energy Deployment in Emerging and Developing Countries. International Institute for Sustainable Development, 2025. https://www.iisd.org/publications/report/green-tax-incentives-renewable-energy.

Wikipedia

{{cite report |last1=Mataba, |first1=Kudzai |title=The Use of Green Tax Incentives for Renewable Energy Deployment in Emerging and Developing Countries |publisher=International Institute for Sustainable Development |date=18 September 2025 |url=https://www.iisd.org/publications/report/green-tax-incentives-renewable-energy |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{mataba2025use, author = {Mataba,, Kudzai}, title = {{The Use of Green Tax Incentives for Renewable Energy Deployment in Emerging and Developing Countries}}, institution = {International Institute for Sustainable Development}, year = {2025}, month = sep, url = {https://www.iisd.org/publications/report/green-tax-incentives-renewable-energy}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }