Effect of Green Fiscal Policy Instruments on Sustainable Economic Growth in Kenya

Purpose: The purpose of this article was to analyze effect of green fiscal policy instruments on sustainable economic growth in Kenya. Methodology: This study adopted a desk methodology. A desk study research design is commonly known as secondary data collection. This is basically collecting data from existing resources preferably because of its low cost advantage as compared to a field research. Our current study looked into already published studies and reports as the data was easily accessed through online journals and libraries. Findings: The findings indicate that green fiscal policy instruments positively influence Sustainable Economic Growth in Kenya by encouraging green investment, promoting renewable energy adoption, reducing environmentally harmful activities, and supporting efficient resource utilization. However, their effectiveness is constrained by inconsistent implementation, limited green financing, and weak enforcement of environmental fiscal policies. Unique Contribution to Theory, Practice and Policy: Pigouvian tax theory, Endogenous growth theory & the porter hypothesis may be used to anchor future studies on the effect of green fiscal policy instruments on sustainable economic growth in Kenya. Particular attention should be given to targeted tax incentives for renewable energy and clean technologies, green public investment, concessional financing, and mechanisms that appropriately price environmentally harmful activities. Policymakers should establish a predictable and coherent green fiscal policy framework that balances environmental objectives with economic growth, employment, investment competitiveness, and household welfare.