The government of Ghana has established the Ghana Carbon Registry system, which is an online database for quantifying and verifying greenhouse gases (GHG) emission and reductions from projects aimed at reducing GHG emissions, issuing carbon credits related to such projects and tracking carbon credits in Ghana in an efficient and transparent manner.
Generally, carbon credits are permits for the reduction, removal or emission of limited amount of GHG. The global concept of emissions trading or carbon credit trading refers to the sale and purchase of carbon credits to meet GHG emission reduction targets, an international practice which was introduced in 1997 through the Kyoto Protocol to the United Nations Framework Convention on Climate Change (UNFCCC). In 2015, the signatories to the UNFCCC concluded the Paris Agreement, which has since replaced the Kyoto Protocol. The Paris Agreement represents a voluntary commitment by each state party to pursue actions, policy and legislation required to achieve a self-determined goal in mitigating GHG emissions. Ghana became a signatory to the Paris Agreement on 22 April 2016 and it was ratified by the Parliament of Ghana on 21 September 2016.
The establishment of the Ghana Carbon Registry (which is run by the Environmental Protection Authority of Ghana) forms part of the government’s efforts to implement Ghana’s carbon market strategy. The strategy aims to raise carbon finance (which generally refers to the revenue streams generated either from projects implemented to reduce GHG emissions, or from trading in carbon credits) in support of Ghana’s obligations under article 6 of the Paris Agreement and thereby drive green foreign direct investments into Ghana.
The establishment of the Ghana Carbon Registry is timely and will also place Ghana in a prime position to leverage the recent boom in investment practices which prioritise measurable impact on environmental, social or governance factors (also known as ESG investing). It is expected that the registry will facilitate carbon finance and open pathways for new private (e.g. private equity) and public (e.g. ESG related instruments such as green bonds) investments in GHG emission reduction related projects.
Ghana has recently finalised its national framework for market (i.e. emission reduction through the creation and trading of carbon credits) and non-market (i.e. emission reduction through means other than market mechanisms, including the use of taxation and fiscal policy to discourage emissions) mechanisms under Article 6 of the Paris Agreement (the Framework). It is expected that the Framework will, after it has received cabinet approval, lead to bespoke regulation for the trading of carbon credits in Ghana. The Framework will be implemented by the Ministry of Environment, Science, Technology and Innovation and the Environmental Protection Authority.