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.

For ATI members, these incentives raise important questions of policy coherence, effectiveness, and accountability. Recent analysis by the International Institute for Sustainable Development (IISD) shows that many emerging and developing economies are adapting tax policies to support clean investment. In low-income contexts, tax incentives may be seen as more feasible than alternatives such as feed-in tariffs. However, poorly designed incentives can generate revenue losses, fail to attract investment, and create opportunities for rent seeking, highlighting the importance of governance, targeting, and monitoring.

International experience shows that incentives are most effective when embedded in a coherent policy framework and aligned with regulatory certainty, sectoral priorities, and strong governance, as highlighted in a recent paper by the Council on Economic Policies (CEP) on industrial decarbonization. Aligning incentives with national development objectives can also support competitiveness, industrial upgrading, and inclusive access to clean energy.

These challenges are becoming more complex with evolving international tax rules. The OECD/G20 Inclusive Framework’s global minimum tax reshapes the policy space for profit-based incentives, increasing the need for targeted and internationally coherent frameworks. 

Against this backdrop, ATI, IISD, and CEP convene ATI members to explore how green tax incentives can deliver impact when integrated with instruments such as carbon pricing, performance standards, and industrial strategies and supported by cross-government coordination. Building on ATI’s work on environmental taxation, this discussion explores how incentives can support investment and industrial transformation when aligned with national priorities, implemented transparently, and regularly evaluated.

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.