Daniel Anyorigya writes: Budget 2022: Why does Ghana want to explore carbon market?


You hypocrites, you don’t fulfill your US$100bn promise yet you want African countries to stop exploring their natural resources. Shame y’all.

The above statement summarizes President Nana Akufo-Addo’s speech at the Conference of Parties (COP) 26 held in Glasgow which was directed at developed country parties such as Australia, Austria, Belgium, Canada, Denmark, European Community, Finland, France, Germany, etc.

With the President’s hands carefully laid on the plough to mine bauxite in the Atewa Forest but fails to account for $100m out of the first tranche which is in a sum of $600m, coupled with the none effective implementation of the Polluter Pay Principle to hold mining companies accountable, and Ghana’s lost fight against illegal mining, he stated that:

“It will be wholly unfair to the world to demand that Africa abandons the exploitation of these same resources needed to finance our development and help us to cope better with the threat of climate change at a time where many countries on the continent have only just discovered them.”

This sparked heated debate among the CSOs as this means the fight to stop the mining in Atiwa Forest deal has fallen into water.

The 2022 budget reading scheduled for 10am, only had the Minister for Finance, Ken Ofori-Atta dressed in a white garment appear after mid-day to highlight carbon markets as a source of climate finance.

The government stated that:

“A total of 24 million tonnes of carbon emissions out of a target of 64 million tonnes are available for carbon market transactions. Government has successfully put in place the critical policies and regulatory arrangements that will enable Ghana to participate in global carbon markets. This paves the way for both local and international private sector investors and project developers to either independently or with the government, leverage this unique opportunity to trade carbon with countries and corporations with ambitious net zero targets over the next nine years.”

Why the carbon market ?

Just a brief history about the carbon market then we zoom into Ghana’s intent to venture into it.

According to the United Nations Framework Convention on Climate Change, in 1997 when developed countries signed the Kyoto Protocol in Japan, they were assigned a target to reduce their greenhouse gases between the year 2008 – 2012 to 5% below 1990 levels, because these gases were causing diseases, flood, drought, famine, etc in developing countries like Ghana.

Unfortunately, just like the $100bn pledge, they couldn’t fulfill this target.

Therefore, they resorted to a carbon market which is to allow “countries that have emission units to spare – emissions permitted them but not “used” – to sell this excess capacity to countries that are over their targets.”

This allows developing countries like Ghana who emit less carbon, hence have surplus to trade off their carbon credits with developed countries like the US or Canada for monetary gains, technological transfers, among others.

Even though Ghana was a signatory to the Kyoto Protocol in 1997, the question still lingers on our minds is why now, if these carbon markets had been in existence for 23 years.

Ghana could have used the money to build sea defence walls which could have assisted our brothers and sisters at Keta whose right to life has been threatened by tidal waves as well as the right to education by final year students at Fuveme being squashed as they look at the remains of their school covered with sea water and heaps of sand.

Our carbon credits could have built dams and social amenities to support the devastating impact of climate change on livelihood and human rights in the northern part of Ghana.

The Minister of Finance, Ken Ofori-Atta stated that there is a total of 24 million of carbon emissions, therefore for example if Ghana is trading at $1 per tonne then Ghana will be making a total of $24m [GHS 144m with the dollar rate at $1=GHS 6].

Surprisingly, Ghana didn’t attend the COP 26 to negotiate on carbon markets but focused on increasing finance for climate adaptation which will help provide social amenities and other developmental projects to help citizens cope with the impact of climate change.

Additionally, Ghana bargained for commitment of developed countries to honour their financial pledges.

President Akufo-Addo’s famous slogan about the Ghanaian economy while in opposition being “ye ti sika su nansu ekom di yen’ can be transliterated as ‘we are sitting on money but we are famished’.

Previous governments have overlooked the importance of the carbon market and Ghana’s only leading author of the AR6 Working Group I of the IPCC report, Dr. Nana Ama Browne Klutse blames the lack of data from the Transport Ministry, Environmental Protection Agency, Forestry Commission, among others for the inability of Ghana to trade its carbon credit.

In an interview with her on the history of Ghana’s carbon credit, I leaned back in my chair and asked: How much does Ghana make from carbon credits?

With her fingers on her laptop seeming to search for an answer for me, she began her response after composing her thoughts:

Carbon credit amount varies in global trading markets for carbon so depending on how negotiators will go on the table we can have a country or region like European Union to say Ghana we are going to offer you $ 1 per each tonne of carbon dioxide you remove from the atmosphere and Ghana can say we want a $100. So it is more of negotiation, a country can come with their own pricing and you the credit holder can also negotiate with your own amount.

Unfortunately as a country it is not so clear how much our carbon credit is, we just have an idea that we have carbon credit but we can’t be so sure how much carbon credit we have to even go on the negotiating table with. So I will say it is a big challenge. We need to work at it because these negotiations are timeless, beyond COP 26 we can still get back to bilateral or multilateral agreements or have agreements with regions to get what you need to get on credit

In general, we need to put our data right, we need institutions which are in charge; EPA, Forestry Commission, Transport Ministry, they should all get the data we need to get in terms of our emissions and credit available for the United Nations. It is also accredited so you need to accept that this is your carbon credit, and then you can go to the market with, showing your methodology, base data and all that. We need to get our figures right to do the negotiation. It is not so clear how much carbon credit we have to go on a negotiating table but it will be a good thing for us as a country to know.

It is a big topic but it has not been extensively discussed in Ghana because we don’t have the base data. We need to be sure of the number of trees that we have because apart from trees, the ocean also absorbs some greenhouse gases especially carbon, but trees absorb more and also our emissions. We need to know how much we are emitting. We need a transportation ministry to tell us how many cars we have, how many are V8, saloon, and how much each car is emitting or how much fuel … once we use fossil fuel we can calculate per each gram of fossil fuel that carbon dioxide emits, that one is chemistry. So we can base our emissions straight from our consumption of fossil fuel, and know how much fuel is consumed by the country. We should be able to get that data.

Once we have that, we can say how much carbon we put in the atmosphere that is our emission. How many trees do we have and what is the canopy size of the tree? Because you may not get two trees taking the same carbon dioxide from the atmosphere. For instance if you have plantain and cassava, a plantain with big leaves may be able to take more carbon dioxide from the atmosphere than a cassava or onion will do, these are just some extreme examples.

Gabon is the only African country so far to receive its “first payment is part of the breakthrough agreement between Gabon and the multi-donor UN-hosted Central African Forest Initiative’s (CAFI) in 2019 for a total of $150 million over ten years” according to the United Nations.

This comes after “independent experts verified Gabon’s results from reduced deforestation and forest degradation (mainly from forestry activities), the payment of $17 million US dollars rewards Gabon’s reductions in 2016 and 2017, compared to annual emission levels from 2006 to 2015”, it added.

What should the Ghanaian citizen do?

At the local level, citizens should actively participate in local governance and seek accountability on monies allocated to tackle deforestation, drought, tidal waves, floods, pests and diseases, among others.

For instance, every assembly ought to submit their Annual Progress Report however most assemblies have defaulted.

The citizens can use the Right to Information Bill to demand for the information to understand how much is allocated to resolve their climate-related problems.

They need to hold the government accountable for not being proactive in grabbing this opportunity.

Source: citinewsroom