Presenting the 2022 Budget on the authority of His Excellency the President of the Republic of Ghana, and per Articles 179 and 180 of the 1992 Constitution, the Finance Minister indicated climate change interventions by the government to ensure the country meets its Nationally Determined Contributions.
Climate change and COP26
According to the United Nations Economic Commission for Africa, the Africa continent is heating up more and quickly than any other part of the world. The report indicated that by 2030, up to 118 million extremely poor people will be subject to the devastating impacts of drought and intense heat.
Intense heat poses a severe health hazard. When the body is under severe heat, the body responds by redistributing blood flow to the skin and producing sweat, to cool the body.
The increase in blood distribution exerts pressure on the heart and can lead to dehydration, reducing blood volume which strains the heart further and also causes damage to organs such as the kidney.
Also, extreme heat leads to climate disasters like flooding and drought.
To curb the adverse effects of climate change, in 2015 at COP21, countries across the world decided to work together to limit global warming to well below 2 degrees and aim for 1.5 degrees. Countries also planned to adapt to the impacts of a changing climate, and financially support developing countries. This gave birth to the Paris Agreement.
As per the Agreement, every 5 years countries must set out increasingly ambitious climate action, which meant that by 2020, countries needed to submit or update their plans for reducing carbon emissions, known as Nationally Determined Contributions (NDCs).
Due to the pandemic, the 2020 COP (Conference of the Parties) had to be shifted to 2021. This made the run-up to COP26 in Glasgow a crucial moment in the world’s strife to limit global temperatures by 1.5 degrees.
Climate change and COP26 – Glasgow’s Conference
COP26 is the 2021 United Nations Climate Change Conference. The ‘26’ refers to the 26th annual summit. COP26 took place in Glasgow from October 31 – November 13 and was attended by close to 30,000 climate change negotiators and activists. The mission of COP26 was to finalize the 1.5 degrees target and other decisions of the Agreement.
The decisions taken under the Climate change and COP26 agreement after an intense conversation over 2 weeks include
a. A US$100 billion pledge from developed to developing nations.
b. keep temperature rises within 1.5C
c. Reduce the use of coal – which is responsible for 40% of annual CO2 emissions.
d. Leaders from more than 100 countries – with about 85% of the world’s forests – promised to stop deforestation by 2030.
e. A 30% cut methane emission by 2030.
Climate change and Cop26 – Lessons for the business community
Every business across the globe must take the bold step to avert the looming crisis of climate change. The environment is not the only element to be affected by climate change but the entire business community. The vagaries in the weather or extreme climatic conditions such as rising sea levels, extreme droughts, storms, and flooding would pose a threat to the security and stability of a region leading to the destruction of a thriving business environment.
Climate change and Cop26 – Competitiveness and opportunities
As the world focuses on going green and improving carbon emissions, businesses that join in the fight, not as a corporate social responsibility but as a business strategy will enjoy great rewards. On the other hand, businesses that sit on the sidelines and treat climate change as a corporate social responsibility will only be shooting themselves in the foot as they will become redundant in years to come.
Let’s take the car manufacturing industry, for example, most car manufacturers are currently in the business of producing electric vehicles with plans to phase out gasoline and diesel vehicles by 2030. If some manufacturers refuse to change their business models to research and produce electric vehicles by then, they will be out of business, watching the success of other companies.
The production of electric vehicles will require electric charging stations and accessories to ensure vehicles maintain their journey on the roads. This requirement creates an opportunity for individuals and/or businesses to venture into the electric vehicle manufacturing and supply chain.
There is no one size fits all approach with comes to businesses dealing with climate change. Each business approach to climate change depends on the industry of the business, the overall business strategy, and goals.
That notwithstanding, each approach must include a climate cost mitigation strategy and risks in its value chain. Every business must assess, evaluate its vulnerabilities, and plan for climate-related and environmental shocks. This will help businesses cushion themselves against climate disasters as well as aid businesses find greater opportunities and improve their competitive stance that takes advantage of climate-induced demand.
Climate Change and COP26 – Ghana government intervention
Given the high valued importance of climate change to the growth of the economic environmental ecosystem, the government of Ghana promised to put in place interventions to “leverage the drive towards a green transition in a manner that promotes sustainable growth, financial and fiscal stability, increased employment, and reduced inequality.
According to the Finance Minister during the budget reading, the government of Ghana had 19 policy measures in 10 priority areas to achieve the Nationally Determined Contributions goals in the next decade (2020-2030).
The 19 policies were not stated in the budget statement, however, the Finance Minister noted that for Ghana to achieve “the ambitious climate change targets, Ghana requires a total of US$9.3 billion in investments to implement the 47 Nationally Determined Contributions programs from 2021 to 2030.”
According to the Finance Minister, The government also submitted 18 proposals to seek funding from the Green Climate Fund (GCF) and co-financiers. Out of the 18 proposals, nine (9) have been approved, totaling US$106.9 million.
Two key projects approved by the GCF are the Ghana Shea Landscape Emission Reduction Project (GSLERP) and the Affirmative Finance Action for Women in Africa (AFAWA). These projects are expected to among other things empower women groups in agriculture in the “most vulnerable agro-ecological zones through the provision of Technical Assistance (TA) and Lines of Credit (LoC) to enable them to participate in low-emission Climate-Resilient Agricultural (CRA) practices in Ghana.
Other plans of the government to battle climate change include:
• the adoption of E-Mobility in the transport sector to address the high levels of Green House Gas (GHG) and air pollution. According to the Finance Minister, “road transport alone contributes 45% of total fuel combustion emissions and accounts for 13% of the overall national Green House Gas emissions.
• an aggressive afforestation programme and projects aimed at restoring lost forest cover.
• the launch Drive Electric Initiative (DEI) for public and private transportation of goods and services
• Commitment to utilizing renewable energy sources.