AN INTRODUCTION
As global awareness of the environmental impact continues to grow, markets for the climate-conscious are on the rise. These markets include climate-smart agriculture, transport, water infrastructure & and waste management, green buildings and carbon markets. Carbon markets, rooted in climate business which are trading systems where carbon credits are exchanged. This compensatory scheme enables companies or individuals to buy carbon credits from organizations that work to remove or reduce greenhouse gas emissions. This article aims to explore carbon markets and their operation in Ghana.
Two distinct types of carbon markets exist, namely compliance and voluntary markets. Voluntary carbon markets involve the voluntary trading of carbon credits by individuals, organizations or countries. A tradable carbon credit serves as a financial instrument in the carbon market, representing a unit of carbon dioxide equivalent (CO2e). One carbon credit is equivalent to a ton of a greenhouse gas (GHG) removed or reduced carbon credits are granted for projects that collect, prevent, decrease, or eliminate GHG emissions in the atmosphere.
The regulation of greenhouse gas reductions originated with the Negotiating Committee of the UN Framework Convention on Climate Change (UNFCCC), which adopted the United Nations Framework Convention on Climate Change in 1992. This convention, outlined in Article 2,aims at the “…stabilization of greenhouse gas concentrations in the atmosphere at a level that would prevent dangerous anthropogenic interference with the climate system.” The Kyoto Protocol, an extension to the UNFCCC Agreement, was adopted in 1997, acknowledging that developed countries, as major contributors to GHG emissions, should bear the responsibility of reducing them.
The Paris Agreement, the current climate change treaty, succeeded the Kyoto Protocol in 2015, following renewed UNFCCC negotiations. This legally binding agreement has shaped the international carbon market and serves as a basis for climate change litigation. Many countries like Cambodia and Costa Rica are actively working towards engaging in carbon markets.
Despite being new to the concept, Ghana has made noteworthy progress in implementing carbon market instruments that were developed through voluntary agreements among countries under Article 6.2 of the Paris Agreement. Ghana’s Parliament ratified the Paris Agreement in September 2016, after becoming a signatory to the Paris Agreement in April 2016, establishing Ghana as a pioneer in the African carbon market.
Harriet Aboagye – Kumi & Nana Amma Asare-Boateng Pupils, Ntrakwah & Co
