CLIMATE FINANCE FRAMEWORK FOR GHANA
A Climate Finance Framework for Ghana is proposed by the Ghana Investment Support Programme, in partnership with Pangea Africa and Climate Policy Initiative (CPI). This framework complements Ghana’s government-led climate pledges represented by its Nationally Determined Contributions. It will also allow Ghana to track climate finance flows to advance mitigation and adaptation action that corresponds to Ghana’s needs. Such tracking is critical to building trust among countries and ensuring the effective use of the available financial resources to combat climate change.
Ghana’s private enterprises offer diverse climate-impact investment opportunities. Businesses especially small and medium enterprises – operating in sectors from sustainable agribusiness to renewable energy to the circular economy are taking root as Ghana’s private sector extends beyond extractives and other traditional sectors. A clear and consistently applied framework, or taxonomy, for climate finance will help highlight existing gaps, spotlight opportunities, and provide a fertile environment for effective mobilisation and scaling of climate capital.
The Ghanaian Context
Over 70% of Ghana’s workforce is engaged in climate-sensitive sectors, such as agriculture, forestry and fisheries, making the nation highly vulnerable to the impacts of climate change. Agriculture contributes 54% to Ghana’s GDP, emphasising the nation’s economic reliance on sectors influenced by climatic variables. Ghana’s vulnerability to climate change is further exacerbated by its dependence on rain-fed agriculture covering 95% of its agricultural land, and limited adaptive capacity of its smallholder farmers. Ghana experiences temperature increases, shifting rainfall patterns leading to flooding and drought, coastal erosion along its 540km coastline, and adverse impacts on water resources, health, and the economy.
Sectoral Allocation of Taxonomy
Nine sectors, with multiple subsectors and mitigation and adaptation solutions for each, are proposed in the framework below.
- Energy Systems: Focus on transitioning to renewable sources like solar, wind, and hydro, alongside improving energy efficiency in buildings and industrial processes.
- Agriculture, Forestry, Other Land Uses, and Fisheries: Emphasis on sustainable agriculture practices’ contributions to both adaptation and mitigation such as drought resistant seed use, crop rotation, and drip irrigation as well as sustainable forestry and fisheries.
- Circular Economy and Waste Management: Rehabilitation of waste management facilities, landfills, and creating recycling and reuse systems.
- Water & Wastewater: Implementation of climateresilient water infrastructure and efficient water use techniques like rainwater harvesting.
- Transportation: Adoption of low-carbon transport systems, such as electric vehicles, and development of infrastructure supporting efficient and sustainable transport.
- Building & Infrastructure: Retrofitting or construction of green buildings for energy efficiency and resilient urban planning to withstand climate-related events.
- Information and Communications Technology: Integration of energy efficiency standards with telecommunication networks through resilient infrastructure.
- Industry: Focus on reduction in net greenhouse gas emissions, and encompassing initiatives such as brownfield replacements, low-consumption warehouses, and industrial process substitution to enhance energy efficiency and environmental sustainability.
- Other and cross-sectoral: This sector includes health, disaster risk management, and other unspecified subsectors.
The full proposed framework summarized in this brief is available online here.
Comments are welcome at climate@PangeaAfrica.com.