ACCRA, November 1, 2022 – The World Bank Group’s new Country Climate and Development Report (CCDR) for Ghana estimates that at least one million more people could be pushed into poverty due to climate shocks unless urgent climate action is taken. Incomes of poor households could fall by up to 40% by 2050. The analysis calls for pursuing development pathways that build resilience to climate change and accelerate the transition to low-carbon growth through a combination of policy and public-private investment.
Ghana’s economic and human development are vulnerable to climate change. On average, approximately 45,000 Ghanaians are affected by flooding each year, and half of Ghana’s coastline is susceptible to erosion and flooding as a result of sea level rise. Without prompt action, high temperatures and heat stress will impact crop and labor productivity, make rainfall patterns more erratic, and damage buildings and infrastructure. Land degradation, water insecurity, and local air pollution also hinder human capital and productivity.
The West African country has made significant progress over the past three decades, but progress has slowed. The report highlights that the country is completely unable to convert its natural wealth into sufficient infrastructure, human and institutional capital needed for sustainable growth.
“The report shows that Ghana can pursue its long-term development and climate goals simultaneously,” said Pierre Laporte, World Bank Country Director for Ghana, Liberia and Sierra Leone. “Ghana’s contribution to global greenhouse gas emissions is small, with per capita emissions at 24% of the global average. The country can put itself on a path to more resilient development by avoiding costly lock-ins, leapfrogging to cutting-edge technologies and starting to mobilize climate finance.”
The report identifies six priority areas for a climate-resilient and low-carbon development pathway that will foster greener, more resilient and inclusive growth in the country.
Sustainable cities and resilient infrastructure by promoting integrated landscape management, promoting climate-smart agriculture, supporting adaptation of coastal communities to adopt an integrated approach to agriculture and environmental management, improving urban development, strengthening resilient mobility infrastructure and services, and improving waste management. building systems, strengthening disaster risk preparedness through early warning systems, improving national fiscal preparedness for climate shocks, adapting health and social protection systems, and realizing new opportunities to manage forest resources as climate resilience assets with a focus on carbon sinks. Reversing deforestation and promoting cleaner cooking. Accelerate the transition to clean energy by expanding renewable energy sources and strengthening regional energy markets. Modernizing the transportation system by improving public transportation and updating vehicle standards.
Against a backdrop of high debt and severe fiscal constraints, Ghana needs to prioritize investments carefully, starting with no-regret actions that maximize the benefits of resilience at affordable costs. The country needs to take urgent steps to restore macroeconomic stability and debt sustainability and improve the business environment to mobilize finance from a variety of sources, including private and development finance. The report estimates the cost of combating climate change to be around $2 billion per year (present value) by 2050, equivalent to 2% to 3% of cumulative GDP over the same period.
“The report shows that the private sector can lead Ghana’s green growth through areas such as green buildings, renewable energy, climate-smart agriculture, and energy efficiency improvements, and IFC is supporting these ventures by increasing investment and advisory services,” said Kyle F. Kelhofer, IFC senior regional manager based in Ghana.
Additionally, the authors highlight the role the financial sector can play in leveraging opportunities for green and blue bonds, insurance and other financial protection mechanisms to help address climate and disaster risks. Concessional finance and overseas development assistance are also important in supporting public finance policies.
To reduce the impact on the poor, Ghana needs to focus on improving social protection systems and safety nets for vulnerable groups, strengthening financial inclusion, and building skills for new green jobs and livelihoods.
This report shows that challenges can be turned into opportunities by taking a climate-resilient, low-carbon path. This will generate an economic impact of more than $26 billion by 2040.
*The World Bank Group’s Country Climate and Development Reports (CCDRs) are a new core diagnostic report that examines the interrelationships between climate change and development. These will help countries prioritize the most impactful actions that can accelerate the low-carbon transition and increase resilience, while achieving broader development goals. CCDR builds on data and rigorous research to identify key pathways to reduce greenhouse gas emissions, their externalities, and climate vulnerabilities. This includes costs and challenges as well as benefits and opportunities. The report suggests specific priority actions to support the transition. As a public document, the CCDR is intended to inform governments, the public, the private sector, development partners, and all stakeholders involved in development and climate challenges. CCDR informs other core banking groups, informs countries’ efforts and operations, and helps attract funding and direct financing for high-impact climate action.
