Corporate Income Tax Incentives to Promote Environmentally Sustainable Investment

World Bank Group2025-01-062025-01-062025-01-06https://hdl.handle.net/10986/42615The paper advances a framework to take stock of CIT incentives across two interrelated policy objectives: stimulating investment in green sectors and processes; and/or encouraging divestment from dirty sectors. It distinguishes three categories of CIT incentives related to the green agenda: (i) green process-oriented incentives, which support environmentally sustainable production processes (e.g., less emission-intensive steel production); (ii) green sector-oriented incentives, whose sector or output support environmental sustainability (e.g., manufacturing of batteries for electric vehicles); and (iii) incentives for polluting (or “dirty”) sectors, referring to sectors or outputs that are counterproductive to environmentally sustainable objectives (e.g., fossil fuel based energy production).en-USCC BY-NC 3.0 IGOECONOMIC GROWTHCLIMATE ACTIONCIT INCENTIVESGREEN SECTORS AND PROCESSESDIVESTMENT FROM DIRTY SECTORSCorporate Income Tax Incentives to Promote Environmentally Sustainable InvestmentWorking PaperWorld BankFindings from 40 economies covered by the World Bank Corporate Income Tax Incentives Database10.1596/42615