Human societies are always in a constant state of flux. As we continue to push the boundaries of progress, our relationship with nature and its bounty and protection has become increasingly strained. The acceleration of industrialization, technological advancement, and urbanization has led to environmental degradation, air and water pollution and depletion of natural resources, etc. The deleterious effects of these anthropogenic activities have been far-reaching, with devastating consequences for our planet’s ecosystem.
The recognition of the need to address environmental issues and to adopt sustainable practices over the years has culminated in the adoption of a global “Net Zero” Agenda. This is backed by the growing understanding that the well-being of humanity is directly tied to the health of the planet we call home. In this article, I briefly examine the origin and meaning of “Net Zero”, how it applies to Ghana and the steps taken in furtherance of this pledge, the opportunities and challenges presented by this commitment.
WHAT IS “NET ZERO”?
Increasing temperatures across the globe have driven global efforts toward reducing anthropogenic emissions. The United Nations’ Sustainable Development Goal 13 and the 2015 Paris Agreement were adopted to combat climate change and its effects. The formal genesis of the Net Zero Agenda is derived from the Paris Agreement adopted in 2015 by the United Nations Framework Convention on Climate Change (UNFCCC).
This is a legally binding document ratified by 196 parties that aims to limit global warming to well below 2 degrees Celsius above pre-industrial levels and to pursue efforts to limit the temperature increase to 1.5 degrees Celsius. The Agreement sets out a framework for countries to take action to address climate change, including mitigation (reducing greenhouse gas emissions) and adaptation (building resilience to the impacts of climate change).
“Net zero” is a scientific term describing a state where the level of emissions is simultaneously and equally matched by the level of removals – a state that must be achieved within a reasonable timeframe to stabilize global temperatures at a compatible and adaptable level. The concept of net zero emissions is a cardinal aspect of the Paris Agreement. To achieve this goal, the Paris Agreement enjoins countries to submit nationally determined contributions (NDCs) outlining their plans to reduce emissions. Due to its all-embracive nature, net zero is distinguished from other terms or climate pledges such as Carbon Neutrality which focuses only on balancing CO₂ emissions and removals and Climate Neutrality.
A net zero transition requires a complete and radical transformation in every aspect of human life in terms of production, consumption, and transportation. Following the Paris Agreement, concrete steps have been taken by Countries in submitting their Nationally Determined Contributions (NDCs), ratifying pacts and agreements such as the Glassgow Climate Pact and attending Conventions on Climate change to reaffirm their commitments although much remains to be done.
ADOPTION OF NET ZERO IN GHANA
Ghana is a signatory to the Paris Agreement and has duly submitted its nationally determined contributions (NDCs) outlining its plans to reduce Greenhouse gas (GHG) emissions. In November 2021, Ghana submitted its updated in NDCs from 2020 to 2030 reaffirming its commitment to tackling climate change. Ghana aims to achieve a 15% reduction in GHG emissions by 2030 in a business-as-usual scenario. To achieve this goal, Ghana’s NDCs focus on certain key areas including energy, transport, agriculture, forestry, and waste management.
Emissions in Ghana Keep getting worse and not better. According to a World Bank Country Climate and Development Report (CCDR) issued in 2022, Ghana’s economic and human development is vulnerable to climate change. It estimates that at least one million people could fall into poverty due to climate shocks and income could reduce by up to 40% for poor households by 2050. The report also notes that though Ghana’s contribution to global greenhouse emissions (GHG emissions) is small, with emissions on a per capita basis at 24% of the global average, the country can take a more resilient development pathway.
According to the report on the National Greenhouse Gas Emission issued by the EPA in 2022, the energy sector accounts for the biggest source of greenhouse emissions, being 45.7% of Ghana’s total GHG emissions of 59.8 MtCO₂e. The AFOLU Sector (Agriculture, Forestry and Other Land Use) occupies the second largest source, contributing 44.6% of the national emissions, with the remaining percentages being taken up by emissions from Waste and Industrial processes and product use. The trends of emissions from energy-related sources have seen a rise of 853.1% from 1990 to 2019 with transport and power, mostly dominated by oil and natural gas being the main drivers of energy-related emissions. However, it is important to note that this is without disaggregating emissions from LULUCF (Land-Use Change and Forestry). Balancing emissions with removals are the first step to breaking the current cycle that the country is in.
Regarding Energy production, according to its Renewable Energy Masterplan, Ghana seeks to reduce its reliance on thermal energy generated from fossil fuels by increasing the share of renewable energy in its energy mix to at least 10% and to holistically improve energy efficiency in the energy sector. In the transport industry, Ghana seeks to promote the use of environmentally friendly, low-emission vehicles and public transport. The country also plans to reduce emissions from agriculture through measures such as sustainable land management, improved livestock management, and the use of agroforestry among other techniques. In the forestry sector, Ghana’s NDCs focus on reducing emissions from deforestation and forest degradation, as well as on promoting reforestation and afforestation. The country aims to achieve zero deforestation in its cocoa and oil palm sectors by 2020 and to plant 20,000 hectares of trees annually. In terms of waste management, Ghana’s NDCs focus on reducing methane emissions from landfills through improved waste management practices, such as waste segregation and recycling.
Ghana has adopted several policies in line with its NDCs which are anchored in achieving its long-term development strategies and policies including the 2010 National Energy Policy, The Renewable Energy Masterplan, The 2015 National REDD+ Strategy, and the National Energy Transition Framework (2022-2070) among others. It is important to acknowledge that the corporate environment of Ghana has not been left behind in this net zero transition. Businesses in Ghana have also given in to the call for responsibility, sustainability, and transparency in their operations which might impact the environment, society, and corporate governance.
Although, there is no specific indication of the long-term strategy of Ghana, the Vice President of Ghana in September 2022 reiterated that Ghana is committed to achieving net zero by 2070.
POSSIBILITIES CREATED BY THE PURSUIT OF NET ZERO
The net-zero transition presents as many opportunities as challenges and some of the relevant possibilities that ought to be taken note of include:
- Opportunities for technological innovation: It is said that climate change is a waste management problem where no one is paying for the cleanup. Thus, the net zero transition and the pursuit of carbon reduction represent spaces that entrepreneurs can move into and capitalize on by developing technologies that can aid in the task of removals. Though nature is self-sustaining and there exist natural carbon sinks that are agents of reduction, it is also important for enterprising companies to develop technological carbon reductions such as Direct Air Capture Technologies (DAC), Technologies that mimic photosynthesis, BECC plants as well as technological removal approaches that are a mix of biological and geological sequestration among other crucial tech innovations.
- Opportunities in compliance consulting: The increased focus on climate pledges and ambitions will create a great deal of opportunity for investment in compliance consulting and reporting companies. Though compliance consultancies are not mainstream in Ghana, the increased prominence of ESG and sustainability considerations is likely to create avenues for developing frameworks for compliance and reporting, standardized models with achievable net zero targets, and benchmarks for state and private entities to implement in their operations. This is likely to reduce substantial inefficiencies in achieving climate targets.
- Modernization of transport system: Given that energy emissions are a major source of emissions in Ghana, a net zero transition represents an opportunity for the government to improve public transportation and update notoriously bad vehicle standards in Ghana. This could include phasing out badly maintained vehicles and implementing hybrid or electricity-powered low/zero emission vehicles.
- Improved urban management and development of sustainable cities: A net zero transition would engender a retooling and reshaping of the existing infrastructure to provide enhancements in resilient mobility infrastructure and services and efficient waste management systems in the cities. Currently, most of the major cities in Ghana have poor drainage and waste management systems with Cities like Accra having little to no tree cover. For instance, nature reserves and parks can be developed in Cities to serve as carbon sinks and reduce the effect of high emissions.
- Opportunity to develop integrated approaches to agriculture and environmental management: According to the World Bank Climate Development Report, environmental management is an area that requires focus in Ghana due to the high level of deforestation and environmental degradation that occurs in the country. A net zero transition represents an opportunity to foster integrated landscape management, promote climate-smart agriculture and support the adaptation of coastal communities.
CHALLENGES TO THE PURSUIT OF NET ZERO
Achieving net zero would lead to a significant transformation of the Ghanaian economy. Despite the implementation of the Renewable Energy Masterplan (2019), the National Energy Transition Framework (2022-2070), and other policies, the commitments made by the government of Ghana in pursuit of net zero are yet to be backed by detailed plans. Execution of the policies would not be easy as the economic development of the country and all-round inclusive growth cannot be divorced from the net zero agenda. A net zero transition involves balancing short-term risks of poorly prepared and uncoordinated action with longer-term risks of insufficient or delayed action. Some of the challenges that could stand in the way of a net zero transition in Ghana include:
- Resistance to change from traditional energy sources: With the energy sector accounting for the largest percentage of GHG emissions in Ghana, this holds the greatest potential for achieving significant decarbonization. However, given the bounty of fossil fuels available to the country which are yet to be exploited, the express intention of the government is understandably focused on making maximum use of its resources as well as expanding its natural gas capacities. In its updated National Medium-Term Development Policy Framework, the government of Ghana has expressly stated that it seeks to promote the exploration of petroleum and leverage the oil and gas industry for national economic development. An example of this determined is the recent 13.2USD billion investment in the Jubilee, TEN, and Sankofa gas fields and the increased production of natural gas. The net zero transition will also negatively impact the petroleum industry through the stranding of assets.
The focus on fossil fuel resources in Ghana’s national policy planning framework and goals will engender an inevitable delay in fulfilling its climate pledges. Ghana is not alone in this decision, despite the insistence from the west on a swift and immediate transition to renewable energy. There has been significant pushback because the rapid industrialization enjoyed by the developed countries came on the back of the unchecked leveraging of fossil fuels. Thus, there remains a predominant school of thought that Ghana and Africa should be allowed to make use of their resources to do the same. The standing perception in the halls of power in Ghana is that inasmuch as there should be a net zero transition, it should be achieved in a just and equitable manner.
- The Cost involved in making a Net Zero transition: The Net zero transition is touted to be a costly venture for Ghana on all fronts. In the National Energy Transition Framework (2022-2070), the estimated financing for a net zero transition is US$562 billion. It is not surprising that the focus of the government of Ghana is centered on energy emissions due to its overreliance on fossil fuels which accounts for the largest source of emissions. Presently, global market prices for technology for renewable energy generation, concentrated solar power and wind, have fallen sharply in recent years and have reached levels that are competitive with fossil-fuel power generation costs. The cost of technologies and their maintenance is high and this would include the cost of phasing out outdated machinery and vehicles, training and developing of human capital, and improving the existing infrastructure.
(iii) Financing difficulties: The question of who and how to pay for the net zero transition would raise substantial difficulties. For instance, even though the Renewable Energy Masterplan establishes the renewable energy fund, this is not yet operational and thus does not exist as a source of finance for prospective entrepreneurs in this field. Private financing of net zero targets can also take place through leveraging support from investment funds such as Ghana Infrastructure Investment Funds (GIIF), Green Climate funds, Crowd financing, debt financing, etc.
Aside from the fact that some of these sources are not fully developed in Ghana nor available to entrepreneurs, investors are unlikely to extend funds to entrepreneurs due to the uncertainty surrounding renewable energy technologies in Ghana as well as macroeconomic situations such as high commercial interest rates, high inflation, and currency depreciation. On a broader scale, public financing can come through raising taxes on companies, carbon taxes, taxes on consumers or through taking on debts. However, this could also have negative knock effects on corporate revenues, job creation and growth of the economy in general.
(iv) Insufficient Technological and Infrastructural development: With the focus centered on energy emissions, it is clear a complete net zero transformation is not yet possible in Ghana at the current stage of renewable energy technology and infrastructural development. Despite the huge potential available for renewable energy from solar, wind energy, the aged and under-developed national grid systems are not ready to handle the power generated from alternative sources. According to the Energy Commission, the current grid infrastructure is not technically robust enough to integrate power from technically advanced power production sources.
Pending the complete shift to renewables, the need for the development of carbon dioxide removal approaches (CDRs) such as land sinks or bioenergy with carbon capture, and storage (BECCS) to balance residual emissions, introducing carbon capture, utilization, and storage (CCUS), and more. However, such technologies are unlikely to be implemented in the country due to their unavailability and the great expense that would be required upfront in their installation and operation.
It is part of the human experience to keep marching forward in search of progress and development. Yet as we do so, we must be mindful of our impact on the environment. We must balance our pursuit of innovation and advancement with responsible stewardship of the planet.
Mother Earth has looked kindly upon us with its generous bounty and protection, it is surely time to return the favour and serve our purpose as stewards of this planet. Our march toward civilization must not be a march toward destruction but rather a march toward a sustainable future.
ANDREWS KWEKU BENIN ANING is an Associate at SUSTINERI ATTORNEYS PRUC with an interest in Commercial Transactions, Intellectual Property, Energy & Mining, Sustainability, and Dispute Resolution. He welcomes views on this article at firstname.lastname@example.org