Climate change presents enormous challenges for the world, and for organizations that are accustomed to doing business in an environment on the verge of radical transformation. The United States' decision to withdraw from the Paris Agreement has added a new complication. Global Network Perspectives asked experts across the Global Network for Advanced Management about impact of climate change—and the U.S. withdrawal—in their regions.
Climate change diplomacy has moved to the center stage of global development agenda. It is real and happening faster than we previously thought, with serious devastating impacts in developing countries, particularly on the Africa continent. The impacts are being exacerbated by a number of non-climatic factors, including prevailing poverty, chronic diseases, weak economic growth, and inadequate finance. Climate change is a race against time: delaying action makes lower climate risk levels unattainable.
At the Conference of Parties (COP21) in Paris in December 2015, Ghana and other African countries united as a negotiating bloc and with a common voice pushed for a strong climate agreement. Africa is already facing adaptation costs in the range of US $7-15 billion per year by 2020. To reach these ambitious and important goals, appropriate financial flows is required by developing countries to meet their climate actions.
Ghana and the Paris Agreement
There is no doubt climate change has become central to Ghana’s development agenda. It has significant and undisputable implications for Ghana’s development, and poses complex challenges for policy makers. Ghana is more vulnerable to the impacts of climate change due to its low adaptive capacity to respond economically and politically. Ghana’s priorities for COP 21 include mitigation, adaptation mechanisms, capacity development, technology transfer and finance to limit greenhouse gas emissions and ensure sustainable growth.
As part of the COP21 process, Ghana submitted intended Nationally Determined Contributions (INDCS) in the context of the county’s national development priorities, circumstances, and capabilities. These became binding Nationally Determined Contributions when a Ghana ratified the Paris Agreement. Ghana is expected to mobilize nearly USD 22.6 billion investment from both domestic and international public and private sources. Out of the USD 22.6 billion investment, USD 10.11 billion (representing 45% of the total investment) is needed for mitigation whereas the remaining USD 12.42 billion is needed for adaptation. Ghana pledged to mobilize USD 6.3 billion (28.3% of total investment) domestically whereas the USD 16 billion (72.7%) will be expected to come from international sources, including the Green Climate Fund. The Paris Agreement therefore underscores the importance of adequate support, capacity building and international cooperation to help developing countries to strengthen its mitigation and adaptation efforts.
Mobilization of Resources
Significant financial resources are required to enable countries adapt to the adverse effects and reduce the impacts of climate change. One of the key outcomes of the Paris agreement is the mobilization of $100 billion a year in support by 2020 into the Green Climate Fund (GCF) to help developing countries to implement climate change mitigation and adaptation activities and to strengthen their national capacities to effectively and efficiently plan for, access, manage international climate funds. Article 9 of the agreement provided that “developed country Parties shall provide financial resources to assist developing countries.” The Green Climate Fund is now the largest multinational cash pool for financing climate action in developing countries. So far about $10 billion has been pledged, with the U.S. alone promising $3 billion. The Obama administration announced in January 2017, that it would give a second payment of $500 million to the Green Climate Fund, which brings the U.S.’s total contribution to $1 billion.
Implications for Ghana and other developing countries
Financial commitments are important for Ghana’s adaptation and mitigation efforts within the framework of the Paris Agreement. Most of the plans for adaptation and mitigation in the Ghana NDCs are overwhelmingly conditional and contingent on climate finance. Ghana’s target is subject to international support in the form of finance, investment, technology development and transfer, and capacity building.
There is no doubt the pulling out of this international agreement by U.S. will significantly affect the global efforts to mobilize climate funds to combat climate change and mitigate its effects. Finance is critical for implementing Ghana’s NDCs. Obviously the funds into the Green Climate Fund will be affected. It is therefore important that Ghana intensifies her efforts in mobilizing other options including private sector and domestic fiscal budgets to scale up her mitigation and adaptation needs.