Ghana.

Context and considerations for a Unions4Climate campaign

Carbon emissions in Ghana have been and continue to be insignificant. So much so

that, until recently, it was a bona fide sink remover. In recent years, ambitious and
laudable commitments have been undertaken by the government at international
forums. Additionally, reversing deforestation trends and reducing Ghana's dependence
on fossil fuels in its energy mix will not only positively impact the global climate but will
also bring benefits to Ghanaian people.

Unfortunately, developments in recent months have not given Ghana's society much
cause for celebration. The power supply crisis has reached social emergency levels
and has led to job losses. Separately, a new IMF bailout will be tied to the well-known
politics of austerity, which the IMF promotes globally, and which are enforced on
governments regardless of their social and human costs.

This is a crucial moment for Ghanaian trade unions, which must look to support
campaigns that solve the current electricity crisis in the short-term, but that do not
jeopardise the country's sustainable development, or result in further impoverishment
in the medium term.

Now is a critical point in time to push harder and to make sure contingency plans do
not override government climate commitments. These commitments should include:
achieving 10% renewables by 2020; backing solar energy schemes in rural areas to
extend development opportunities to many Ghanaian people who are currently
excluded; and rejecting highly polluting coal based solutions.

Emissions trends and national commitments

In the global rankings, Ghana only emits 0.03% of the world’s carbon dioxide, meaning
Ghana contributes a mere 24Mt Carbon dioxide equivalent to global greenhouse
emissionsi.

Despite its low emissions Ghana has put a Renewable Energy Law in place, along with
a Renewable Energy Fund and a Bio-energy Policy Strategy. The Renewable Energy
Law includes a feed-in tariff scheme and a renewable energy purchase obligation. This
is supported by the Strategic National Energy Plan for 2006–2020 which seeks to
increase the use of renewable energy sources to 10 per cent of the country’s energy
mix by 2020ii.The Plan also seeks to achieve 30 per cent penetration in rural
electrification via renewable energy technologies by 2020iii.

Notwithstanding the ambition of these policy proposals, a thorough assessment of

current trends needs to be undertaken - trends which are characterised by growth in
both emissions and GDP. This is especially important for the uncontrolled deforestation
and current budgetary possibilities. An additional reason is that recent government
announcements appear to signal moves in a different direction.

The increase in emissions amounted to a 242.3% increase of GHG including LUCF

from 1990 to 2006. iv

Trend of total GHG emissions including LUCF (in GgCO2e) 
Source: Ghana’s Second National Communication to the UNFCCC, 2011.
 Ghana. Context and considerations for a Unions4Climate campaign

A fair share

Ghana's contribution to climate change is residual. In fact, until 1997 it was a net
remover by sink and its contribution through negative emissions helped reduce the
severity of the problem.

However, due to the country's vulnerability, impacts of climate change are significant
and are expected to become increasingly serious. An increase of 1°C has been noted
over the past 30 years. One recent projection estimated temperature increases of
1.7°C to 2.04°C by 2030 in the Northern Savannah regions, with average temperatures
rising as high as 41°C. Decreasing rainfall and persistent droughts have significantly
reduced its capacity to generate power through its hydroelectrical sourcesv. Over 80%
of disasters in Ghana are estimated to be climate-related. vi

Hence, a fair solution for Ghana should also come from outside the country. This
means more emission reduction ambition from the biggest emitting countries and, of
course, a proportionate and appropriate response from rich countries to finance
adaptation measures for Ghanaian people.

Nonetheless, the time is now for Ghana to implement clean solutions - just like for all
countries - for a fair future for all. The 10% renewables by 2020 pledge perhaps goes
beyond what could be fairly expected of Ghana if judged on capacity and liability;
however this is a real commitment to a sustainable future for the country.

Sectoral emissions trends

Aside from the aforementioned emissions increases, the breakdown of Ghanaian

emissions by sector is changing.

The increasing deforestation – a consequence of conversion of forest and grassland for

agriculture; poor agricultural practices; illegal logging; expansion of settlements; and
surface mining and bush burning – was one of the major for the increase in CO2
emissions. In 2006, Land Use, Land-Use Change and Forestry (LULUCF) accounted
for 25 per cent of GHG emissionsvii.

The figures for changes in other emissions over time are presented in the table below.
 Ghana. Context and considerations for a Unions4Climate campaign

Source: Ghana Green Economy Scoping Study, UNEP 2013.

The general increase in emissions from the energy sector, which is the most rapidly
increasing sector, could be attributed to the following: increased fuel consumption in
the growing area of power generated from thermal sources; increased fuel
consumption and poor fuel efficiency in the road- transport category; and also rising
biomass use in the residential sub-category.

It is worth mentioning that in the case of Ghana, methane (CH4) is almost as important
at CO2 and it was the dominant GHG in 2000, accounting for 6.2MtCO2e. The rising
trend of CH4 emissions has been generally driven by the increasing impacts of the
following economic activities -- domestic and on--site burning of biomass, valley--
bottom rice cultivation and above all, enteric fermentation from domestic livestockviii.

Economic development and social deficits

Thanks to the strength of its democratic system and the relative strength of its civil
society, Ghana is a contender for the title of "model for African development", and
adopting Ghana's measures elsewhere would reverse the worrying trends in the
region. This "international interest" in Ghana has had very different impacts. On the
one hand, the IMF imposed one of the most serious Structural Adjustment
Programmes in 1983. On the other hand, the government along with international
organizations has developed numerous employment and development plans, which
have proven good theoretical exercises.
 Ghana. Context and considerations for a Unions4Climate campaign

The SAP which was implemented in the early 80s increased poverty and decreased
the size of the labour force in formal sector employment to less than 10%. Employment
rose from roughly 10% in 1980 to 19% in 1987 and then to 21% in 1993. Job losses
mainly affected urban and educated citizensix.

In the last decade it seemed the country had overcome this merciless trend as growth
levels were high and poverty levels had dropped. In fact, the share of the population
defined as poor fell from 51.7 per cent in 1991/1992 to 28.5 in 2005/2006. However,
unemployment persists. No reliable statistics are available, yet estimates suggest that
up to 300,000 workers join the pool of jobseekers every year and only around 2% find
jobs in the formal sectorx.

Between 2010 and 2011, Ghana moved from a low-income country to a lower middle-
income country, though it is interesting to observe that the modest gains in national
output growth are not reflected in the growth rate of per capita incomexi.

In these years growth was mainly driven by cocoa, gold and oil which were the main
contributors to the country’s GDP. Oil production in began in 2011, and this is now
driving the country's transition into an emerging oil economy.

Even though economists have advocated excellent economic forecasts since 2011,
based on high prices of raw materials and the discovery of oil, the reality has proven
completely different. Today the situation is again alarming. In 2013 Ghana ranked 138
out of 187 countries in HDI, falling two positions since 2011. Also, the country has been
bailed out by the IMF who has called for measures to increase revenues, eliminate
energy subsidies, and to reduce the public salary bill in next year's budget.

Ghana’s public debt has reached an estimated 67.6% of GDP in 2014 through
borrowing both domestically (33.8% of GDP) and externally (33.2%). Despite the slight
increase in the revenue, interest cost increased to 6.2% of GDP from 4.6% of GDP).xii

Inflation is a serious issue for the working class. Ghana’s annual inflation rate
accelerated in 2014 and reached as the highest growth rate since February of 2010.
Year-on-year cost of housing, water, electricity, gas and other fuels jumped 38%. Also
transport prices rose 21%; clothing and footwear 20% and food cost increased 7%.xiii In
2014, the Trade Union Congress of Ghana organized a nation-wide demonstration and
issued an ultimatum to the Government to take immediate action to, among other
things, address the perceived widespread corruption and halt the depreciation of the
national currency – the cedi - and slow the rising cost of living.

Energy poverty and the dumsor crisis

The Ghanaian economy presents significant contradictions. On the one hand it has a
good regulatory body with national development policies and excellent forecasts for
growth based on its natural resources but on the other it is facing up to a new bailout
from the IMF. Likewise, the energy situation is also complex and contradictory.

Ghana has a major deficit in access to its own modern sources of energy. Ghana
needs to expand its installed electricity capacity and distribution system to provide
electricity to almost 30% of its population that currently has no access, according to the
latest World Bank data. Many Ghanaians, particularly in rural areas, rely on traditional
biomass and waste, particularly firewood, for household cooking and heating. Firewood
accounts for slightly more than 40% of Ghana’s total primary energy consumption,
according to Ghana’s national energy statistics.
 Ghana. Context and considerations for a Unions4Climate campaign

Even though oil has been discovered, the energy situation - one of the country's main
problems - has changed little.

Despite this discovery, the country is now in its third year of power outages. These
outages are known in Ghanaian as “dumsor” and which translates literally as “switch off
and on”. The unstable supply of fuel from Nigeria, inadequate water levels at Ghana’s
three hydro power facilities and the frequent breakdown of equipment at power plants
have resulted in demand outstripping supply. Although the government has promised
to work hard to restore the power supply in the country, this year load shedding or
“dumsor” has intensified with 12 hours of power followed by 24 hours of lights out
which has put strain on both businesses and ordinary citizens.

Impacts resulting from the lack of energy supply on the country's industry are
enormous. The African Development Bank states that the rising cost of energy has
eroded manufacturers’ profit margins, while erratic energy supply results in expensive
loss of production and the need to use fuel for electricity generators. As an example the
dumsor have severely impacted the viability of Ghana’s garment industry and forced
most small-scale producers out of businessxiv. The Industrial and Commercial Workers’
Union calculate that about 12,600 workers nationwide lost their jobs due to the energy
crisisxv

The installed capacity, efficiency and fight against system losses have to be improved if
Ghana's development is to be kept on track. The installed capacity of power production
in Ghana is 2846 MW (VRA May 2015), of which fossil fuel contributes 48%, Solar and
Wind powers contribute 0.1%, and Hydro-Electricity contributes 52%. In 2012 thermal
was only 33% and hydro 66%xvi.

The current power deficit is estimated at between 150 to 300MW. The national target
by 2030 is 10,000 MW.

The government has so far initiated some projects to generate supplementary

electricity for the national grid. From the list of projects started or commissioned there
are 3 thermal projects (combined cycle) of an approximated combined generation
capacity of 512 MW, 1 hydro power plant (400 MW), 1 wind project (100-150 MW), 1
small solar, (10MW) and a big utility-scale solar PV park (155 MW) There are two other
projects being studied: two combined cycle plants, one 132 MW and the other 450 MW.
Although ongoing projects are diversified, they imply a substantial increase in installed
capacity of fossil fuels compared with renewable sources.

In recent months a 700 MW coal plant has been announced, backed Chinese
investment. Coincidently, this is in a country that has numerous native sources of
energy, but which doesn't include coal among them. The company, China Shenzen,
says it is ready to invest the 1.5 billion USD needed.

The discovery of Oil and removal of fossil fuel subsidies

There are other factors which are important to get an understanding of Ghana's current
situation. The new IMF bailout in 2015 calls for an end to the fossil reform subsidies,
which has lasted for more than a decade and has been marred by several factors
including the inconsistency of applying the Automatic Adjustment Pricing Mechanism,
transparency challenges and a lack of regular reviews of related social programmes. In
this new phase, these factors have to be improved to avoid impacting the poorest
familiesxvii.
 Ghana. Context and considerations for a Unions4Climate campaign

The discovery of the Jubilee oil field happened in 2007. The field came online in 2010,
and production in Ghana has since increased from 7,000 barrels per day (bbl/d) in
2009 to 99,000 bbl/d in 2013xviii.

However, new revenues from oil have trickled through slowly due to the cost of
investments and have been somewhat reduced by the global drop in oil prices in recent
years.

Nonetheless, of the total US $1.3 billion extractives revenue in 2013 (6% of total
government revenue, according to IMF statistics), the oil and gas sector contributed
roughly two thirds.

The funds from oil revenues went mainly to investments in road infrastructure, and also
to building the capacity of the oil and gas sector, repaying loans and strengthening
agriculture - particularly on fertilizer subsidies. The Ghana Revenue Management Act
was passed to guarantee an adequate use of oil revenues, and hence avoid the
profound harm created in other African Countries. The law outlines clear mechanisms
for collecting and distributing petroleum revenue. It specifies what percentage should
help fund the annual budget and what should be set aside for future generations and
what should be invested for economic crisis.

There is a lot of pressure to change this law, which was originally hailed by civil society
for its innovative nature. This includes earmarking a more significant share to solve the
energy crisis. Some estimates suggest 4 billion dollars are needed over the next 10
years and hence there is pressure to modify the allotmentsxix.

Considerations for a Unions4Climate campaign

- The energy crisis has led to a humanitarian and industrial crisis in the country. Solving
this conflict is key to maintaining employment. Pressuring the government is essential.
It is paramount that this chaotic situation is not solved with short-term solutions that
prove harmful to development in the medium and long term in the country.

- Investing in a coal plant where numerous native sources are available, even of fossil
energy such as oil and gas, and in an international context defined by increasing
pressure for taxing CO2 emissions, does not seems to be a wise economic decision.

- The Ghanaian energy mix is changing quickly as hydropower is falling. This energy
source cannot respond to the growing demand and will be increasingly jeopardized by
the serious effects of climate change in the country and competition with neighboring
governments for projects in the same watershed. International leaders should promote
clean energy to help the country solve its energy crisis, focusing on developing a
balance between renewable and non-renewable sources. Rich countries, which are the
biggest polluters, are also responsible for foreign investment in clean energy.

- The Ghanaian government is responsible for mobilizing domestic investment for a

national strategy on resources. Investment should also come from operating profit
generated from natural resources. In principle, it does not seem changes are needed to
Ghana's Revenue Management Act, but rather the key lies in supporting good projects
with these funds, committing to clean energy in the medium and long term and local job
creation.
 Ghana. Context and considerations for a Unions4Climate campaign

- Media pressure only focuses on big investments in generation projects, but does not
give importance to improving the efficiency of the system, techniques to prevent
leakage through the replacement of obsolete equipment, and managing duplication and
reducing the existing centralization. All of which also require investment. The need to
make improvements in these areas is already capitalized to promote the privatization of
Ghana's systems, especially in this period under new IMF surveillance. The unions
have a very important battle ahead.

- Investment in solar power or biomass for homes and businesses to promote self-
sufficiency is an appropriate measure to solve the current problem. It would mean a
short term solution for energy supply and moves in the direction of green development.
However, and additional to the aforementioned, achieving universal electricity access
in Ghana by 2020 will depend on Ghana's capacity to boost these projects, especially
when taking into account the numerous remote settlements in the country. Biomass
(firewood and charcoal) should be gradually replaced by solar photovoltaic, wind farms,
biogas energy technologies, and biofuels. This will require investment in infrastructure
and technology.

- These renewable energy projects can maintain employment, helping companies to

meet electricity needs in times of dumsor but also can serve as a source of new direct
and indirect employment. Recent announcement for a total of $230 million to be
invested into renewable energy mini-grids and stand-alone solar PV systems; solar PV-
based net metering with storage; and utility-scale solar PV/wind power generation has
to come with investment in skill programs and training for the workforce.

- Ghana's contribution to reducing emissions further must also come through better
control of other sources, such as the much needed improvements to controls on
deforestation. Estimates of the impact of biomass consumption in Ghana showed that
more than 90% of the original 8.22 million hectares of natural forest in Ghana is gone
due to logging and fuel wood. The forestry sector provides a livelihood for
approximately 2.5 million people; a sustainable management must create better and
more sustainable livelihoods and decent jobsxx

- When arguments are made in favour of sacrificing environmental issues to solve the
debt or energy crises, environmental costs must be kept in mind: the cost of Ghana’s
environmental degradation is estimated at 10% of its GDPxxi.

Unions4climate Campaign

- Ensure compliance with the 10% renewable energy by 2020 goal and choose
energy projects which ensure supply and at the same time prioritize this goal.

- Reject projects such as the proposed coal plant which imply continued energy
dependence, and which is unnecessary with Ghana's native resources. A
decision motivated by easy short-term investment may prove a costly decision
in the medium term for the Ghanaian people.

- Support rural electrification projects for solar and biogas systems for residents
who do not have access; work on improving training for the existing workforce
in these technologies; and likewise use these technologies to keep economic
and residential activity in urban areas affected by cuts. Such projects are easy-
fits for those financed by oil profit. Unions have to be part of them.
 Ghana. Context and considerations for a Unions4Climate campaign

- Participate at company level, above all in the electricity grid system, in the
improvement of energy efficiency and ensure supply for the population while
discouraging at the same time privatization propaganda.

- Carry out a national campaign in the fight against deforestation.

i
   Ghana’s Second National Communication to the UNFCCC, 2011. http://unfccc.int/resource/docs/natc/ghanc2.pdf
ii
   IEA (International Energy Agency) (2010) Global Renewable Energy Policies and Measures, Ghana 
http://www.iea.org/countries/non‐membercountries/ghana/
iii
   Drivers for low carbon development: Case studies from China, Ghana and Etiopía, UK Aid 2012 
https://www.ids.ac.uk/files/dmfile/Briefing‐Driversforlowcarbondevelopment.pdf
iv
   Ghana’s Second National Communication to the UNFCCC, 2011. http://unfccc.int/resource/docs/natc/ghanc2.pdf
v
   Ghana’s Second National Communication to the UNFCCC, 2011. http://unfccc.int/resource/docs/natc/ghanc2.pdf 
 
vi
   African Ecomic Outlook, Ghana, AFDB 2014 
http://www.africaneconomicoutlook.org/fileadmin/uploads/aeo/2014/PDF/CN_Long_EN/Ghana_ENG.pdf
vii
   Ghana Green Economy Scoping Study, UNEP 2013. 
http://www.unep.org/greeneconomy/Portals/88/documents/PAGE/Ghana%20GE%20Scoping%20Study_low%20res.pdf
viii
   Ghana’s Second National Communication to the UNFCCC, 2011. http://unfccc.int/resource/docs/natc/ghanc2.pdf
ix
   Saprin, Structural Adjustment: The SAPRI Report : The Policy Roots of Economic Crisis, Poverty, and Inequality (New 
York: Zed Books, 2004), 204. 
 
x
   Ghana Labour Market Profile, LO FTF 2014 
http://www.ulandssekretariatet.dk/sites/default/files/uploads/public/PDF/LMP/lmp_ghana_2014_final_version.pdf
xi
   Ghana’s Second National Communication to the UNFCCC, 2011. http://unfccc.int/resource/docs/natc/ghanc2.pdf
xii
   Ghana Overview. The WorldBank 2014 http://www.worldbank.org/en/country/ghana/overview
xiii
   Trading Economics http://www.tradingeconomics.com/ghana/inflation‐cpi
xiv
   African Ecomic Outlook, Ghana, AFDB 2014 
http://www.africaneconomicoutlook.org/fileadmin/uploads/aeo/2014/PDF/CN_Long_EN/Ghana_ENG.pdf
xv
   http://www.dailyguideghana.com/blame‐mahama‐for‐dumsor‐ecg‐workers‐on‐may‐day/
xvi
   Volter River Authority Power Generation. Fact and figures 2015 http://www.vraghana.com/resources/facts.php
xvii
   Mohammed Amin Adam ‐ Africa Centre for Energy Policy (ACEP)A case for Socially Sustainable Petroleum Product 
Pricing in Ghana, ILO 2015
xviii
   EIA 2014 http://www.eia.gov/beta/international/
xix
   Millennium Challenge Development Corporation http://www.myjoyonline.com/news/2015/May‐14th/ghana‐needs‐
4b‐to‐solve‐dumsor‐govt‐charged‐to‐rely‐on‐oil‐proceeds.php
xx
   Mohammed Amin Adam ‐ Africa Centre for Energy Policy (ACEP)A case for Socially Sustainable Petroleum Product 
Pricing in Ghana, ILO 2015 
 
xxi
   African Ecomic Outlook, Ghana, AFDB 2014 
http://www.africaneconomicoutlook.org/fileadmin/uploads/aeo/2014/PDF/CN_Long_EN/Ghana_ENG.pdf