76242 V1 G h a n a CO U N T RY ST U DY i Economics of Adaptation to Climate Change GHANA ii E C O N O M I C S O F A D A P T AT I O N T O C L I M A T E C HAN G E EACC Publications and Reports 1. Economics of Adaptation to Climate Change: Synthesis Report 2. Economics of Adaptation to Climate Change: Social Synthesis Report 3. The Cost to Developing Countries of Adapting to Climate Change: New Methods and Estimates Country Case Studies: 1. Bangladesh: Economics of Adaptation to Climate Change 2. Bolivia: Adaptation to Climate Change: Vulnerability Assessment and Economic Aspects 3. Ethiopia : Economics of Adaptation to Climate Change 4. Ghana: Economics of Adaptation to Climate Change 5. Mozambique: Economics of Adaptation to Climate Change 6. Samoa: Economics of Adaptation to Climate Change 7. Vietnam: Economics of Adaptation to Climate Change Discussion Papers: 1. Economics of Adaptation to Extreme Weather Events in Developing Countries 2. The Costs of Adapting to Climate Change for Infrastructure 3. Adaptation of Forests to Climate Change 4. Costs of Agriculture Adaptation to Climate Change 5. Cost of Adapting Fisheries to Climate Change 6. Costs of Adaptation Related to Industrial and Municipal Water Supply and Riverine Flood Protection 7. Economics of Adaptation to Climate Change-Ecosystem Services 8. Modeling the Impact of Climate Change on Global Hydrology and Water Availability 9. Climate Change Scenarios and Climate Data 10. Economics of Coastal Zone Adaptation to Climate Change 11. Costs of Adapting to Climate Change for Human Health in Developing Countries 12. Social Dimensions of Adaptation to Climate Change in Bangladesh 13. Social Dimensions of Adaptation to Climate Change in Bolivia 14. Social Dimensions of Adaptation to Climate Change in Ethiopia 15. Social Dimensions of Adaptation to Climate Change in Ghana 16. Social Dimensions of Adaptation to Climate Change in Mozambique 17. Social Dimensions of Adaptation to Climate Change in Vietnam 18. Participatory Scenario Development Approaches for Identifying Pro-Poor Adaptation Options 19. Participatory Scenario Development Approaches for Pro-Poor Adaptation: Capacity Development Manual G h a n a CO U N T RY ST U DY i Economics of Adaptation to Climate Change G hana Ministry of Foreign Affairs Government of the Netherlands ii E C O N O M I C S O F A D A P T AT I O N T O C L I M A T E C HAN G E © 2010 The World Bank Group 1818 H Street, NW Washington, DC 20433 Telephone: 202-473-1000 Internet: www.worldbank.org E-mail: feedback@worldbank.org All rights reserved. This volume is a product of the World Bank Group. The World Bank Group does not guarantee the accuracy of the data included in this work. 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All images © The World Bank Photo Library, except Pages 4, 31, 34 and 68 © Shutterstock G h a n a CO U N T RY ST U DY iii Contents Abbreviations and Acronyms vii Acknowledgements ix Caveat xi Executive Summary xiii Impacts of Climate Change xiii Adaptation to Climate Change xiv Lessons and Policy Recommendations xiv 1  Introduction 1 Study Objectives 2 Organization of Report 3 2  Overview of the EACC Global Track Study 5 3  Methodology 11 Overall Approach and Key Assumptions 11 Climate Forecasts 12 Sector-Specific Approaches 14 4  Study Results 35 Overview of the Ghanaian Economy 35 Climate Change Projections 39 Economic Impacts of Climate Change – CGE Model Results 42 Economic Implications of Adaptation to Climate Change – CGE Model Results 54 Adaptation Options 57 Adaptation Costs 59 Social Dimensions 62 iv E C O N O M I C S O F A D A P T AT I O N T O C L I M A T E C HAN G E 5  Summary and Policy Implications 69 Climate Change Impacts 69 Adaptation to Climate Change Costs 70 Looking forward 70 Summary Matrix 73 References 77 Annexes (available on line at www.worldbank.org/eacc) Annex 1. Cli-Crop Modelling for Agriculture Annex 2. Dose-Response Model for Roads Annex 3. IMPEND Model for Energy and Water Annex 4. DIVA Model for Coastal Zone Annex 5. Social Dimensions of Climate Change Annex 6. Computable General Equilibrium (CGE) Modeling Tables Table 1. Total Annual Costs of Adaptation for All Sectors, by Region, 2010–50 7 Table 2. Total Annual Costs of Adaptation for all Sectors, by Region and Period, 2010–50 7 Table 3. A Comparison of Adaptation Cost Estimates ($ billions) 8 Table 4. GCM Scenarios for Ghana Country Track Study 12 Table 5. Trends in the Growth Rate of the Transport Sector 19 Table 6. Share of the Transport Sector in Total GDP in Purchaser’s Value, 2002–2007 (%) 19 Table 7. Road Sector Vulnerability to Potential Climate Change 20 Table 8. Dose-Response Descriptions for Maintenance Costs 20 Table 9. Electricity and Water Subsectors Growth Rates of Real GDP 23 Table 10. Electricity and Water’s Share of GDP and Contribution to Overall GDP Growth 23  rojected Population of the Coastal Regions and Table 11. P Estimated Population at risk to Sea Level Rise 27 Table 12. Land Area Distributions of the Ten Provinces of Ghana, divided into three zones 30 Table 13. Economic Development Indicators in Ghana, 2005 to 2008 36 Table 14. Temperature (Co) in Regional CC Scenarios, 2010–50 38 Table 15. Precipitation Projections for Ghana’s 16 subbasins – Descriptive Statistics 41 G h a n a CO U N T RY ST U DY v Table 16. Standard Deviation of Annual Real Consumption Growth 45 Table 17. Welfare Impact without Adaptation Investments 45 Table 18. DIVA Annual Results for High Sea Level Rise Scenario 51 Table 19. DIVA Annual Results for Low Sea Level Rise Scenario 52  ean, Standard Deviation, and Extreme Values of Annual GDP Table 20. M Growth Rates by Region, 2006–50 53 Table 21. Deviations of Welfare from Baseline under Alternative Adaptation Strategies 56  verage Annual Real GDP Growth Rates (2010–50) Table 22. A under Alternative Adaptation Strategies (%) 56 Table 23. Regional Shares in Agricultural Production by Commodity 60 Table 24. Commodity Composition of Agricultural Production by Region 61 Table 25. Summary of Ghana Coastal Seal Level Rise (SLR) Annual Adaptations Costs 65  ummary recommendation on low-regret options and policy interventions Table 26. S in short and long term following the Ghana EACC Analysis 74 Figures Figure 1. Shares of the Total Annual Costs of Adaptation by Region 2010–50 7 Figure 2. Flow Chart of Model Sequencing 14 Figure 3. Trends in the Growth Rate of the Agricultural Sector, 2002–10 16 Figure 4. Rural-Urban Potable Water Coverage by Region, 2006 and 2007 (%) 26  hana, West Africa: (a) Geographical location, (b) Administrative units Figure 5. G (termed provinces) and major coastal towns, and (c) The coastal zone 29 Figure 6. Ghana Sector Contribution to the GDP 37 Figure 7. Annual Real Growth Rate by Sector, 2002–09 37 Figure 8. Ghana Dry Scenario Temperature Changes Compared to Base, 2010–50 39 Figure 9. Temperature Variability Compared to Base 40 Figure 10. Surface flow average difference from the no-climate change scenario, 2010–50 41 Figure 11. Annual Deviations of Real GDP from Base, 2010–2050 (%) 42 Figure 12. GDP Growth Path in Levels 2010–2050 43 Figure 13. Terminal Period Real GDP (average annual GDP, 2046–50) 43  erminal Real Household Consumption Level Figure 14. T (annual average, 2046–50) relative to 2005 Level 45  ecomposition of Climate Change Impacts on Present Vale of Real Absorption Figure 15. D (deviation from base in billion $) 46 vi E C O N O M I C S O F A D A P T AT I O N T O C L I M A T E C HAN G E Figure 16. Average Annual Agricultural Real GDP, terminal period 2046–50 46 Figure 17a. Real GDP Deviation from Base for Maize, 2020–50 47 Figure 17b. Real GDP Deviation from Base for Cocoa, 2020–50 47 Figure 17c. Real GDP Deviation from Base for Cocoa, South Savannah 2020–50 47  limate Change Impacts of Cocoa Productivity in Ghana Figure 18. C (deviations from baseline yields) 48  ecadal Average Ratios of Future Livestock Net Revenues to Net Revenues under Figure 19. D Baseline Conditions, Ghana Dry (on left) and Wet (on right) Scenarios, 2001–50 50  ecadal Average Ratios of Future Livestock Net Revenues to Net Revenues under Figure 20. D Baseline Conditions, Global Dry (on left) and Wet (on right) Scenarios, 2001–50 50 Figure 21. Average Annual Water and Energy Sector Real GDP, 2046–50 51 Figure 22. Deviations of Welfare from Baseline under Alternative Adaptation Strategies 56 Figure 23. Annual Road Maintenance Costs, 2010–50 63 Figure 24. Annual Average Road Maintenance Costs, 2010–50 63 Figure 25. Total Energy Adaptation Costs 63 G h a n a CO U N T RY ST U DY vii Abbreviations and Acronyms AR4 Fourth Assessment Report ITCZ Inter-Tropical Conversion Zone BAU Business-as-usual LCA Latin America and Caribbean Region CAADP Comprehensive Africa Agriculture MDGs Millennium Development Goals Development Program NCAR National Center for CGE Computable general equilibrium Atmospheric Research CO2 Carbon dioxide NAPA National adaptation plans of action CMI Climate moisture index NCCAS National Climate Change CSIRO Commonwealth Scientific and Adaptation Strategy Industrial Organisation NGO Nongovernmental organization DIVA Dynamic and interactive ODA Official development assistance vulnerability assessment PaMs Policies and measures EACC Economics of Adaptation PET Potential evapotranspiration to Climate Change Ppm Parts per million EAP East Asia and Pacific Region R&D Research and development ECA Europe and Central Asia Region SAS South Asia Region ENSO El Niño-Southern Oscillation SRES Special Report on Emissions GCM General circulation model Scenarios GDP Gross domestic product SSA Sub-Saharan Africa GHG Greenhouse gases SST Sea surface temperature GIS Geographical information system TAR Third Assessment Report GPRS Ghana Poverty Reduction Strategy UNDP United Nations Development GWCL Ghana Water Company Limited Programme HDI Human Development Index UNFCCC United Nations Framework IFPRI International Food Policy Convention on Climate Change Research Institute VRA Volta River Authority IMPACT International model for policy analysis of agricultural commodities and trade IPCC Intergovernmental Panel on Climate Change Note: Unless otherwise noted, all dollars are U.S. dollars. G h a n a CO U N T RY ST U DY ix Acknowledgments This study would not have been successfully the specific situation of Ghana. Particularly, we completed without the inputs of a large number gratefully acknowledge Dirk Willenbockel, Ken of organizations and individuals. Profound grat- Strzepek, Eihab Fathelrahman, Robert Nicholls, itude goes to officials from all the government Len Wright, Chas Fant, Paul Chinowsky, Chan- ministries, departments, and agencies, who con- ning Arndt, Sherman Robinson, Michelle Mini- tributed immensely to the success of the study by hane, William Farmer, Brent Boehlert, Alyssa providing data and other information for the McClusky, and Jean-Marc Mayotte. Thanks also analysis as well as the validation of methodology to the social scientist team that developed the and adaptation options. social dimensions of climate change, including Tony Dogbe, Joseph Yaro, David Pessey, Emilia In particular, we would like to recognize the Arthur, George Ahiable, Tia Yahaya, Kamil teams at the Environmental Protection Agency, Abdul Salam, Samantha Boardley, Simon Mead, Ministry of Environment, Science and Technol- and Livia Bizikova. In Ghana, consultants Daniel ogy, Ministry of Finance and Economic Plan- Sarpong, Dyson Jumpah, and Philip Acquah ning, the National Development Planning reviewed sector strategies and adaptation options, Commission, and Ministry of Agriculture. In and Saadia Bobtoya supported the team with particular, we would like to thank William Agye- information management and communications. mang-Bonsu, Jonathan Allotey, Alhassan Iddi- The technical writer for Ghana Case was John risu, David Quist, Rudolph Kuuzegh, George Asafu-Adjaye. Scott, Winfred Nelson, and Regina Adutwum for the overall guidance provided in the course The team would also like to thank development of the study. Many more contributed with ideas partners in Ghana for excellent coordination of and technical input in July, August, and October work related to this study, including Sean Doolan of 2009 during workshops and meetings, and (United Kingdom Department for International well as during the final validation workshop in Development), Ton van der Zon (Royal Nether- September 2010. lands Embassy), Wagn Winkel (Royal Danish Embassy), Shigeki Komatsubara and Stephen We wish to also acknowledge the inputs of the Duah-Yentumi (United Nations Development global modeling team for their diligence in fitting Program), and Jannik Vaa (European climate change scenarios and economic models to Commission). x E C O N O M I C S O F A D A P T AT I O N T O C L I M A T E C HAN G E The study was kindly financed by the govern- Mearns, Sergio Margulis (team leader of the ments of the United Kingdom, The Netherlands, overall EACC study) , Stephen Mink, Urvashi and Switzerland, as well as the governments of Narain, and Victoria Bruce-Goga. Several Bank Norway and Finland through the Trust Fund for staff have commented and provided insight to Environmental and Social Sustainable Develop- sectors covered in this report, including Ajay ment (TF-ESSD) and the World Bank. Kumar, Chris Jackson, Herbert Acquay, Ishac Diwan, John Richardson, Osman Kadir, The World Bank Task Team included Peter Sebastien Dessus, Shelley McMillan, and Sunil Kristensen (Task Team Leader), Aziz Bouzaher, Mathrani. Robert Livernash provided editorial Anne Kuriakose, John Fraser Stewart, Kiran services, Jim Cantrell contributed editorial input Pandey (Coordinator EACC country studies), and coordinated production, and Hugo Mansilla Raffaello Cervigni, Robert Schneider, Robin provided editorial and production support. G h a n a CO U N T RY ST U DY xi Caveat This study is experimental and innovative in nature. The CGE modeling has made use of many assumptions to estimate the economics of adaptation to climate change in Ghana in a long time horizon. The numbers and results in the report should be used with caution, and consid- ered indicative. While the report suggests short and long-term policy and investment options, the authors believe that further review of the cost- benefit of adaptation options should be undertaken. G h a n a CO U N T RY ST U DY xiii Executive Summary Impacts of Climate Change fluctuations will increase the risk of floods and/or droughts in both rural and urban areas. Because most Climate change is projected to have significant impacts of these changes are caused by upstream areas out- on Ghana. Although there will be fluctuations in both side the territory of Ghana, there is a need for dia- annual temperatures and precipitation, the trend for logue with Ghana’s neighbors on the management of temperature over the period 2010–50 indicates warm- shared water resources. ing in all regions. The highest temperature increases will be in the Northern, Upper East, and Upper West Because Ghana’s economy is predominantly based regions, while the lowest will be in the Brong Ahafo on agriculture, it will suffer severe economic conse- region. For example, under one of the climate scenar- quences from climate change. Although there will be ios (Ghana Dry), temperatures in the three regions of considerable variation in real gross domestic product the North will rise by 2.1–2.4°C by 2050. In compari- (GDP) growth, the overall trend over 2006–50 clearly son, the predicted rise in the Ashanti, Western, East- indicates a downward trajectory in the absence of ern, Central, and Volta regions will be 1.7–2.0°C, and adaptation to climate change. Toward 2050, annual the rise in the Brong Ahafo region will be 1.3–1.6°C. real GDP is projected to be 1.9 to 7.2 percent lower than in a dynamic baseline scenario without anthro- The forecast for precipitation indicates a cyclical pogenic climate change. Real household consump- pattern over the period 2010–50 for all regions, with tion also declines relative to the base scenario in all the high rainfall levels followed by a drought every four climate change scenarios analyzed in this study. decade or so. The wettest parts of the country are expected to be the Forest agroecological zone Adverse agricultural productivity impacts become (Ashanti and Western regions) and Coastal agroeco- more pronounced over time. Relative to the baseline logical zone (Volta, Eastern, Central, and Greater projection for the middle of the 21st century, agricul- Accra regions). The northern and southern Savan- tural GDP is estimated to decline by 3 to 8 percent. nah zones are expected to be relatively dry. The projections for cocoa pose serious socioeconomic implications in view of cocoa’s significant contribu- There will also be wide fluctuations in runoff and tion to national income and farmers’ livelihoods. stream flows, with areas in the Volta basin experienc- ing significant reductions in runoff, while the south- Damage to the coastal zone in the form of flooding, western area will experience increases. These land loss, and forced migration is estimated to be xiv E C O N O M I C S O F A D A P T AT I O N T O C L I M A T E C HAN G E $4.8 million per annum by the 2020s, rising to Incomplete partial equilibrium modeling puts econo- $5.7 million per annum by the 2030s. mywide adaptation costs in a mid-range of $300– $400 million per annum. Partial equilibrium, as The predicted climatic changes will have adverse opposed to the general equilibrium approach, consid- effects on human well-being and activities, food secu- ers each subsector of the economy in isolation from rity, and water availability. In response to these climate the other sectors when it comes to prices and income changes, people will migrate in search of better land interactions among stakeholders. and environment. The migration and relocation of population from rural to urban areas will raise demand and put pressure and on municipal ser- Lessons and Policy vices—including water supply and sanitation, public Recommendations health, energy, transportation, and housing services. Such higher demand coupled with weak infrastruc- ture and lack of services will slow economic growth Agriculture and development. Migration will occur not only There is a need to (a) increase investment in agri- within the country, but also from countries to the north cultural R&D, backed by extension services, to of Ghana, which will also become hotter and drier. produce new crops and livestock, as well as early- maturing varieties; (b) improve water storage capacity to utilize excess water in wet years and Adaptation to Climate use it when it is needed during dry years; (c) Change improve agricultural and livestock extension ser- vices and marketing networks; (d) construct small to mid-size irrigation facilities; (e) improve entre- Adaptation in this study is aimed at restoring aggre- preneurial skills to generate off-farm income gate national output to baseline, rather than restoring (alternative livelihoods); and (f) improve access to each sector to the baseline. This suggests that even loans and microcredit. with adaptation, there will still be some residual dam- age at the sector level. Given the scarcity of resources Road transport at the government’s disposal, tough choices must be Recommended actions include proper timing of road made in the design and sectoral balance of the construction; for example, before the rainy season. national development strategy in light of the chal- There is also a need to ensure routine and timely lenges posed by climate change. maintenance; review overall road design criteria, including materials and drainage, road sizes, and pro- In the absence of adaptation, climate change tection of road shoulders; and reform road design causes a decline in real output growth for all the standards to meet higher needs against extreme global circulation model (GCM) results. Planned events such as floods and droughts. adaptation can be effective in compensating the adverse impacts of climate change. Water and energy Recommended hard options for the water subsec- The general equilibrium modeling indicates that tor include increased water transfer from the Volta losses in agriculture could be as much as $122 mil- basin to meet the needs of a growing urban popu- lion per annum, while losses in transport and hydro- lation; construction of efficient infrastructure; and power could be up to $630 million and $70 million, blocking of dry-stream channels to harvest rainwa- respectively. Total economywide impacts are esti- ter to recharge the groundwater system, which mated to range from $158–$765 million per annum. serves as an alternative water supply during dry G h a n a CO U N T RY ST U DY xv years. A number of soft options were also deemed level. The poorest are particularly vulnerable to to be of high priority: afforestation, improved land climate shocks, as they do not have stored assets to use practices, protection of river courses, and use during times of stress. A pro-poor approach desedimentation of reservoirs. to climate change adaptation would look not only at reducing shocks to households, but also engage Diversification of the energy mix and development in transformative adaptation strategies that of renewable sources—such as solar, wind, biomass, increase resilience and overcome past biases in waste conversion, and mini-hydro dams—are priori- subnational investment. ties, as are soft options such as promoting policies and measures aimed at enhancing energy efficiency in all Geographically targeted, multisectoral interventions sectors. The government also should commit to a are needed to reduce the “development deficit� of strict infrastructure maintenance regime. vulnerable regions. Poverty and sensitivity to climate- related hazards are increasingly concentrated in par- Coastal zone ticular regions within the country. In many cases, The modeling results generally show that the poor communities—such as recent urban in- investment costs of coastal zone adaptation are migrants—are relegated to the most marginal areas likely to be uneconomic because the costs are likely of the city. Adaptation policies at the national level to far exceed any benefits, so defending the entire must take into account the diverse socioecological set- coastline by building dikes and sea defense walls is tings within the country, and devise area-specific not a sensible strategy. A better strategy would be interventions that can support the livelihoods of these to protect key investments and natural resources— vulnerable populations. Multisectoral interventions ports, harbours, beaches, and coastal mangroves— that aim to improve area resilience through reducing and to zone significant new infrastructure away the development gap are particularly effective forms from vulnerable areas to the greatest extent possi- of investment, including programming in education, ble. Emphasis must be placed on soft options such social protection and health, roads, market services, as enhancing capacity in early warning systems natural resource management, and skills training. and the use of GIS and satellite imagery for coastal zone management. New oil and gas development Regional integration and related infrastructure and regional develop- It is important for Ghana to strengthen dialogue ment in the Western region would need to be with neighboring countries to effectively deal with designed with climate change adaptation in mind. the challenges of climate change. Areas where negotiations and consultations would be required Social dimensions are in the management of shared water resources Complementary investments in both hard and soft and regional migration of people. adaptation options are needed to ensure effective use of infrastructure and to meet the needs of the Long-term planning poorest. Adaptation investments in hard infrastruc- Given the development challenges and threats posed ture without complementary investments in policy, by climate change and variability, Ghana needs a service, and extension support will not operate in an long-term national plan that takes these factors into optimally efficient manner. account. Currently, Ghana only has a medium-term development plan covering 2010–13. The long-term A policy shift is needed—from support for coping plan also needs to be integrated into the plans of the strategies for climate shocks at the household regional coordinating councils and the district devel- level, to transformative adaptation strategies that opment plans to provide a coherent and integrated can increase resilience at the household and area approach to development planning. ONE G h a n a CO U N T RY ST U DY 1 Introduction Climate change and variability is arguably one of example, regional climate systems such as the El the greatest challenges facing humankind this cen- Niño-Southern Oscillation phenomenon and the tury and into the next. Developing countries, in par- Asian monsoon will be altered. ticular those in Sub-Saharan Africa (SSA), are particularly at risk because they are located in areas Even if GHGs are stabilized at 450ppm, the where temperatures will rise the fastest. They are annual mean global temperature will be about also more vulnerable because they are mainly 2°C above preindustrial levels by the middle of dependent on agriculture, which is the most climate this century due to the amount of gases already sensitive sector. Despite some uncertainty about the locked into the climate system. Therefore, the precision of climate science, there is now general short-run option for both developed and develop- agreement among climate scientists on a number of ing countries is to adapt. However, without any issues. Firstly, it has been firmly established that the mitigation, an adaptation-based strategy for deal- Earth is undergoing rapid changes due to significant ing with climate change is bound to be too costly.1 increases in greenhouse gases (GHGs). For example, This is because a temperature increase far in global GHG emissions have roughly doubled since excess of 2°C (e.g., 4°C) is predicted to be associ- the early 1970s; if current policies continue, emis- ated with potentially catastrophic impacts whose sions could rise by over 70 percent during 2008–50. effects may be irreversible. Examples of such Atmospheric concentrations of carbon dioxide impacts include extinction of half of all species (CO2) have increased by nearly 100 parts per million worldwide, inundation of 30 percent of coastal (ppm) compared to preindustrial levels, reaching wetlands, and increases in disease and malnutri- 379 ppm in 2005, and the Earth has warmed 0.7°C tion. Although autonomous (or private) adapta- since 1900 (IPCC 2007; Brohan et al. 2006). Sec- tion is already occurring in various parts of the ondly, human activities, particularly burning of fos- world, including SSA, the general view is that this sil fuels and deforestation, have been identified as approach will be incapable of dealing with warm- prime causes of the changes observed in the 20th ing in excess of 2°C. In such situations, planned century and are likely to contribute to further adaptation would be required. changes in the 21st century (IPCC 2001). Thirdly, these atmospheric changes are highly likely to alter 1 While adaptation and mitigation are necessary responses to temperatures, rainfall patterns, sea level, extreme climate change, they need not be mutually exclusive. In fact it has been shown that there can be cobenefits and synergies between weather events, and other aspects of climate. For the two responses. 2 E C O N O M I C S O F A D A P T AT I O N T O C L I M A T E C HAN G E At the 2007 Bali Conference, the developed coun- lacking for many developing countries. To close tries pledged among other things to provide “ade- this information gap, the World Bank initiated the quate, predictable, and sustainable financial Economics of Adaptation to Climate Change resources and the provision of new and additional (EACC) study in early 2008, supported by funds resources, including official and concessional fund- from the governments of the Netherlands, Switzer- ing for developing country parties� to assist them in land, and the United Kingdom. The objectives of adapting to climate change (UNFCCC 2008). In the EACC are to develop an estimate of adapta- order to determine the order and magnitude of the tion costs for developing countries and to help financial assistance required, it is necessary to know decision makers in developing countries under- how much adaptation would cost. Unfortunately, stand and assess the risks posed by climate change current information on adaptation costs, particu- and design better strategies to adapt to climate larly for developing countries, is not sufficiently change (World Bank 2010a). At the 2007 Bali comprehensive. For example, the World Bank pro- meetings, the Ghana delegation made a request to duced one of the first estimates of adaptation costs the World Bank for assistance to estimate the cost for developing countries in 2006, with estimates of climate change adaptation for planning and ranging from $9–$45 billion a year (World Bank budgetary purposes. Ghana was therefore included 2006). However, these estimates were restricted to among six other countries in which country-based the cost of climate-proofing only three categories of EACC studies would be undertaken. The other investments: official development assistance (ODA) participating countries are Bangladesh, Bolivia, and concessional finance, foreign direct investment, Ethiopia, Mozambique, Samoa, and Vietnam. and gross domestic investment. The Stern Report (Stern 2007) estimated that adaptation costs would This report presents a synthesis of the findings range from $4–$37 billion per year by 2050, using from the Ghana EACC case study. The study the World Bank (2006) approach, while the UNDP’s benefited from close collaboration and input from estimates were $5–$67 billion a year by 2015. Oxfam various stakeholders, including government agen- International (2007), using national adaptation cies (Ministry of Environment, Science and Tech- action plans (NAPAs), estimated global adaptation nology; Environmental Protection Agency; to be at least $50 billion per year, while UNFCCC Ministry of Finance and Economic Planning; and (2007) estimated adaptation costs for five major sec- Ministry of Energy), civil society organizations, tors to range from $26–$67 billion per year by 2030. and development partners. As part of the Ghana One of the latest estimates is by the Climate Works EACC study process, a series of participatory sce- Foundation; under their Project Catalyst Initiative, nario development (PSD) workshops highlighted the costs of adaptation for developing countries are the impact of climate change on vulnerable estimated to lie between $15 and $30 billion for groups and also identified and vetted adaptation 2010–20 and $30–$90 billion by 2030 (European strategies for further analyses. Climate Foundation 2009). A recent review of cur- rent climate change adaptation estimates (Parry et al. 2009) argues that the existing estimates are likely Study Objectives to be gross underestimates due to the exclusion of some sectors or the incomplete accounting of cli- The main objectives of this study are to present matic effects. estimates of the impacts of climate change for key selected sectors for Ghana and to discuss the Whereas considerable work has been done in a implications for climate change adaptation large number of advanced countries on the cost of options and adaptation costs. This type of infor- climate change adaptation, such information is mation can assist policy makers in a number of G h a n a CO U N T RY ST U DY 3 areas. First, it would assist them to make appro- discussing the global EACC study and the priate budgetary allocations for climate change EACC methodology, which was applied in this adaptation and to inform the debate on the level study at a more disaggregated level. The sec- of assistance required for the development effort. tion highlights the differential impacts of cli- Secondly, given that scarce resources must be mate change among different regions of the allocated amongst competing needs, the informa- world, including Africa. Chapter 3 presents an tion would enable them to make tough choices on overview of the methodology used, including the design and sectoral balance of the national the key assumptions. An effort has been made development strategy in light of the challenges to present this information in nontechnical lan- posed by climate change. The beneficiaries of this guage where possible. The more technical report will include not only the government, but aspects of the study can be found in the annexes. also the development partners, nongovernmental The sector results are contained in chapter 4. organizations, researchers, students, and citizens The chapter begins with an overview of the concerned about the impacts of climate change. Ghanaian economy, followed by the climate projections for Ghana and the overall economic impacts. Next, the results for each sector are Organization of the Report presented in three parts: climate change impacts, the adaptation options, and the adap- The report is organized as follows. The next tation costs. The final chapter concludes with a section puts the study into context by briefly summary and policy implications. T WO G h a n a CO U N T RY ST U DY 5 Overview of the EACC Global Track Study The approach adopted in the global track study availability. Construction of the baselines also was to use country-level data sets to estimate involved the use of a consistent set of GDP and adaptation costs for all developing countries for population forecasts for 2010–50.2 Two climate seven key sectors of the economy — infrastruc- models were chosen to capture as large a range as ture, coastal zones, water supply and flood pro- possible of model predictions, including model tection, agriculture, fisheries and ecosystem extremes of dry and wet climate projections. services, human health, and forestry. In line with These were the National Center for Atmospheric the Bali Action Plan’s call for “new and addi- Research (NCAR) CCSM3 and Commonwealth tional� resources to meet adaptation costs, the Scientific and Industrial Research Organization study considered adaptation costs as additional (CSIRO) Mk3.0 models. There is not much dif- to the costs of development. Therefore, the costs ference in the model projections for warming by of measures that would have been undertaken 2050, with both models projecting increases of even in the absence of climate change were not about 2°C above pre-industrial levels. However, included. Adaptation cost was thus defined as the projections do vary substantially for precipita- the cost of appropriate capacity to deal with tion changes. Based on the climate moisture index future climate change minus the cost of appro- (CMI), the NCAR model predicts the wettest sce- priate capacity to deal with current climate vari- nario globally (but not necessarily the wettest and ation. The latter therefore includes the driest in every location), whereas the CSIRO “adaptation deficit,� which is defined here as the model predicts the driest scenario. lack of sufficient capacity to deal with current climate variation. The next step in the process was to predict what the world would look like with climate change. The The process of estimating the cost of adaptation 2050 time frame was chosen because of the many began with the establishment of a development uncertainties associated with forecasting climate baseline for each sector. This is the growth path change beyond this period. This was done by esti- that would be followed in the absence of climate mating the impacts on agriculture, forestry, fisher- change to the year 2050 and which determines ies, consumption, human health, water availability, sector-level performance indicators—for exam- ple, productivity growth in agriculture, level of 2 The year 2050 was chosen due to the increasing error associated infrastructure assets, level of nutrition, and water with trying to make forecasts beyond this time period. 6 E C O N O M I C S O F A D A P T AT I O N T O C L I M A T E C HAN G E and physical infrastructure. Adaptation cost was In general, the adaptation costs are dominated by then calculated as the cost of climate-proofing the costs of infrastructure, coastal zones, and these resources to enable them to withstand the water supply and flood protection in both scenar- impacts, as well as the cost of assisting people to ios. In terms of the sectoral breakdown, the high- deal with the impacts. Due to the complexity of est costs for East Asia and the Pacific are in modeling different sectors at a global level, a zero infrastructure and coastal zones; for Sub-Saharan discount rate was assumed with costs expressed in Africa, water supply and flood protection and 2005 constant prices.3 A World Bank study— The agriculture; for Latin America and the Carib- Costs to Developing Countries of Adapting to Climate bean, water supply and flood protection and Change: New Methods and Estimates—offers a detailed coastal zones; and for South Asia, infrastructure discussion on the logic behind the zero discount and agriculture. rate at the global level (World Bank 2010a). Table 2 indicates that under both climate scenar- The study used three different methods to aggre- ios, total annual adaptation costs rise over time. gate adaptation costs and benefits across sectors For example, for the NCAR model, annual adap- and countries. These were gross (no netting of tation costs are $73 billion during 2010–19, rising costs), net (benefits are netted across sectors and 45 percent over the next 30 years to reach $106 countries), and X-sums (positive and negative items billion in 2040–49. Similarly, for the CSIRO are netted within countries but not across coun- model, costs also increase but more rapidly, rising tries). The study estimates that the global cost 67 percent over the entire period, from $57 bil- between 2010 and 2050 of adapting to an approxi- lion a year in 2010–19 to $95 billion by mately 2°C warmer world by 2050 lies between 2040–49. $75 billion and $100 billion a year (Table 1). Figure 1  Shares of the Total Annual Figure 1 presents a chart of the share of the total Costs of Adaptation by Region, 2010–50 costs by region using the CSIRO model and the X-sum cost aggregation method. The East Asia $7 and Pacific Region has the highest share of the $4 adaptation cost with 25 percent, followed by 7% 4% $25 Sub-Saharan Africa and Latin America and the 25% Caribbean with 22 percent each, and then by South Asia with 20 percent. Europe and Central $22 22% Asia and the Middle East and North Africa have the lowest shares of 8 percent and 4 percent, respectively. Although the NCAR model esti- 22% mates tend to be generally higher than the $22 20% CSIRO estimates, the rankings of the shares are $20 similar in both models. Middle East Sub-Saharan Africa 3 Discounting the time stream of investment costs would lower and North Africa the net present value of total investment or adaptation costs, but Europe and Latin America would not influence the choice of investments or the underlying Central Asia and Caribbean investment costs. South Asia East Asia and Paci c 5 World Bank. 2010. The Costs to Developing Countries of Adapt- ing to Climate Change. http://beta.worldbank.org/content/ economics-adaptation-climate-change-study-homepage. Source:  (World Bank 2009) G h a n a CO U N T RY ST U DY 7 Table 1  Total Annual Costs of Adaptation for All Sectors by Region, 2010–50 ($ billions at 2005 prices, no discounting) Cost Middle East aggregation East Asia Europe and Latin America and North Sub-Saharan type and Pacific Central Asia and Caribbean Africa South Asia Africa Total National Centre for Atmospheric Research (NCAR), wettest scenario Gross sum 28.7 10.5 22.5 4.1 17.1 18.9 101.8 X-sum 25.0 9.4 21.5 3.0 12.6 18.1 89.6 Net sum 25.0 9.3 21.5 3.0 12.6 18.1 89.5 Commonwealth Scientific and Industrial Research Organization (CSIRO), driest scenario Gross sum 21.8 6.5 18.8 3.7 19.4 18.1 88.3 X-sum 19.6 5.6 16.9 3.0 15.6 16.9 77.6 Net sum 19.5 5.2 16.8 2.9 15.5 16.9 76.8 Source:  (World Bank 2010a) Table 2  Total Annual Costs of Adaptation for all Sectors by Region and Period, 2010–50 (X-sums, $ billions at 2005 prices, no discounting) Middle East East Asia Europe and Latin America and North Sub-Saharan Period and Pacific Central Asia and Caribbean Africa South Asia Africa Total National Centre for Atmospheric Research (NCAR), wettest scenario 2010–19 22.7 6.5 18.9 1.9 10.1 12.8 72.9 2020–29 26.7 7.8 22.7 2.0 12.7 17.2 89.1 2030–39 23.3 10.8 20.7 3.0 13.5 19.2 90.5 2040–49 27.3 12.7 23.7 5.0 14.3 23.2 106.2 Commonwealth Scientific and Industrial Research Organization (CSIRO), driest scenario 2010–19 16.4 3.9 11.6 2.4 11.9 10.3 56.5 2020–29 20.1 4.7 13.1 2.6 17.5 13.3 71.3 2030–39 20.9 6.4 20.2 3.0 17.7 20.0 88.2 2040–49 21.0 7.6 22.8 3.9 15.3 24.1 94.7 Source:  (World Bank 2010a). 8 E C O N O M I C S O F A D A P T AT I O N T O C L I M A T E C HAN G E Table 3  A Comparison of Adaptation Cost Estimates ($ billions) World Bank Economics of Adaptation to Climate Change (EACC) Study UNFCCC Parry et al. NCAR CSIRO Sector (2007) (2009) (wettest Scenario) (driest scenario) Infrastructure 2–41 18–104 29.5 13.5 Coastal zones 5 15 30.1 29.6 Water supply and flood 9 >9 13.7 19.2 protection Agriculture, forestry, 7 >7 7.6 7.3 fisheries Human health 5 >5 2 1.6 Extreme weather events — — 6.7 6.5 Total 28–67 — 89.6 77.7 Source:  (World Bank 2010a). Such a trend is to be expected as, under a busi- effects and refinements in the cost estimations, ness-as-usual (BAU) scenario, rising emissions adaptation costs tend to lie in the upper ranges of result in more than proportional environmental the UNFCCC estimates. In the area of coastal impacts. Another important finding (not shown zone management and defense, the EACC esti- here) is that adaptation costs decline as a percent- mates actually represent a six-fold increase com- age of GDP over time. This suggests that coun- pared to the UNFCCC estimates.4 tries become less vulnerable to climate change as their economies grow if the countries considered The only area where the EACC estimates are adaptations to climate changes in their strategic lower is in human health; the UNFCCC study planning processes. Development enhances projects a cost of $5 billion per annum, whereas households’ capacity to adapt by increasing levels the EACC projects $2 billion (NCAR model) and of incomes, health, and education. $1.6 billion (CSIRO model). This difference is partly explained by the inclusion of the develop- The study results indicate that there are consid- ment baseline in the EACC study, which reduces erable regional variations in the share of adapta- the number of additional cases of malaria, and tion costs as a percentage of GDP. The share is thereby adaptation costs, by some 50 percent by highest in Sub-Saharan Africa, in large part 2030. With the exception of coastal zones, the because GDP is lower in the region. Percentages Parry et al. (2009) adaptation costs are much remain stable in Europe and Central Asia and higher than the EACC study. Their estimate for the Middle East and North Africa, and fall infrastructure, for example, ranges from $18 to sharply in all other regions. $104 billion per annum. They come up with higher estimates because they argue that low- and Table 3 compares adaptation costs derived from the EACC study with those of UNFCCC (2007) 4 This difference reflects the effects of the following refinements: and Parry et al. (2009). Given that the EACC better unit cost estimates, including maintenance costs, and the inclusion of the costs of port upgrading and risks from both sea- study uses a more comprehensive coverage of level rise and storm surges. G h a n a CO U N T RY ST U DY 9 middle-income countries have a large infrastruc- ability of governments to provide assistance. ture deficit and that the costs of climate-proofing Also, by its very nature, economic development this additional infrastructure must be included in tends to shift resources away from agriculture, the adaptation cost. which is the most climate-sensitive sector, into less climate-sensitive areas such as services and For Sub-Saharan Africa, as well as other devel- manufacturing. oping regions such as South Asia and East Asia and the Pacific, the study results highlight a The global track study provides policy makers number of salient issues. First, for these regions with an indication of global adaptation costs. as a whole, the results indicate that adaptation to However, modeling of the climate scenarios and climate change will be costly to implement and the climate change impacts are at a relatively high would subject national budgets to further strain. degree of aggregation. It is highly likely that when Secondly, given that the effects of climate change the models are downscaled to the country/local are already being felt in these regions, failure to level, the nature and pattern of the effects might take immediate action would even be costlier in be entirely different from those obtained at the the future as the effects are bound to escalate regional level. For that reason, country-level stud- over time. Thirdly, economic development plays ies such as the Ghana EACC study are necessary a key role in enhancing adaptive capacity. By to complement the global track study. increasing levels of incomes, health, and educa- tion, economic development enhances the capacity of households to adapt; and by improv- Overall Approach and Key ing institutional infrastructure, it enhances the Assumptions TH REE G h a n a CO U N T RY ST U DY 11 Methodology The overall approach adopted in the study follows it is assumed that policy makers know what the closely on the method used in the global track future climate will be and act to prevent its damages. study. Using a 2050 time frame, development base- Second, only four climate models (described below) lines are first developed for each sector. The base- are used in the Ghana case study; it is implicitly line represents the growth path the economy would assumed that they cover the breadth of climate follow in the absence of climate change. It is a rea- change impacts. Third, in costing the adaptation sonable trajectory for growth and structural change options, the study focuses on “hard options�—such of the Ghanaian economy over a period of 40 as building dams and dikes—and ignores “soft� years that can be used as a basis of comparison options such as early warning systems, community with the climate change scenario. The baselines for preparedness programs, watershed management, each sector utilize a common set of GDP and pop- and urban and rural zoning. This approach was ulation forecasts for 2010–50. From the baselines, deliberately chosen because the former options are sector-level performance indicators—such as the easier to value and cost; it does not mean that the stock of infrastructure assets, level of nutrition, and latter are less important. Fourth, the adaptation costs water supply availability—are determined. Next, are based on current knowledge. This implicitly GCM projections of climate change are used to assumes that there will be no innovation and techni- predict changes in various variables, including cal change in the future. However, we know that agricultural output, consumption, water availabil- economic growth and hence development depends ity, and infrastructure such as roads and ports. The on technical change, which is likely to reduce the final steps involve identifying and costing adapta- real costs of adaptation over time. The only case tion options for the key economic sectors — agri- where technical change is considered is in the agri- culture, road transport, water and energy, and the cultural sector, where growth in total factor produc- coastal zone. For all sectors, the adaptation costs tivity is built into the model, and explicit investment include the costs of planned, public policy adapta- in research is included in the costs. (We consider the tion measures and exclude the costs of private possible effects of these assumptions in the discus- (autonomous) adaptation. sion of the study’s limitations below.) Given the complexity of climate change and the number of variables and actors involved in the Climate Forecasts impacts, a number of simplifying assumptions have been made in order to facilitate the modeling. First, 12 E C O N O M I C S O F A D A P T AT I O N T O C L I M A T E C HAN G E Historic and future climate inputs specific to Ghana climate moisture index. and its river basins—such as monthly temperature and precipitation—were used to drive the river In line with the global track, the climate projec- basin and water resource model and crop models tions from these two GCMs are used to generate outlined below. Historic inputs were obtained using the “Global Wet� and “Global Dry� scenarios for the University of East Anglia’s Climate Research the Ghana country-track study. In addition, the Unit’s global monthly precipitation and tempera- climate projections from the two GCM/SRES ture data. Future inputs were taken from four combinations with the lowest and highest climate GCMs forced with different CO2 emission scenar- moisture index for Ghana are used to generate a ios to represent the total possible variability in pre- “Ghana Dry� and a “Ghana Wet� scenario. In cipitation. In line with the approach taken in the the case of Ghana, the globally “wettest� GCM global track study, climate projections from the actually projects a drier future climate for Ghana NCAR and CSIRO models were used to generate than the globally “driest� GCM under emission the “Global Wet� and “Global Dry� scenarios for scenario A2. the Ghana case study. Four climate change scenarios are selected to rep- In the EACC global track study, the National resent the largest possible ranges of changes in Center for Atmospheric Research (NCAR) temperature, precipitation, and water runoffs. CCSM3 and Commonwealth Scientific and The climate moisture index (CMI) is used as a cri- Industrial Research Organization (CSIRO) terion to select the Ghana climate change scenar- Mk3.0 models with SRES A2 emission forces ios. The index is a measure of the water balance were used to model climate change for the analy- of an area in terms of changes in precipitation (P) sis of most sectors because they capture a full and losses of potential evapotranspiration (PET). spread of model predictions to represent inherent The moisture index (CMI) is calculated as CMI = uncertainty. In addition, they report specific cli- 100(P - PET)PET. The MI range in the various mate variables—minimum and maximum tem- GCM scenarios is 115 percent—from -66 percent perature changes—needed for sector analyses. in the Ghana dry scenario to 49 percent in the Though the model predictions do not diverge Ghana wet scenario (Table 4). much for projected temperature increases by 2050 (both projecting increases of approximately 2oC Precipitation and temperature data obtained from above preindustrial levels), they vary substantially these simulations were used to estimate the avail- for precipitation changes. Among the models ability of water at a subbasin scale. Historical cli- reporting minimum and maximum temperature mate data for each basin were gathered using changes, the NCAR was the wettest and the available precipitation and temperature data CSIRO the driest scenario globally, based on the when available, along with the Climate Research Table 4  GCM Scenarios for Ghana Country Track Study Scenario GCM SRES CMI Deviation (%) Global Wet ncar_ccsm3_0 A2 -17 Global Dry csiro_mk3_0 A2 9 Ghana Wet ncar_pcm1 A1b 49 Ghana Dry ipsl_cm4 B1 -66 Source: Strzepek and Mccluskey (2010) G h a n a CO U N T RY ST U DY 13 Unit’s 0.5° by 0.5° global historical precipitation modified Hargreaves method was used. Actual and temperature database. evapotranspiration is a function of potential evapotranspiration and soil moisture state (follow- CLIRUN-II is used in this study to forecast runoffs ing the FAO method). Soil water is modeled as a in Ghana. CLIRUN-II is the latest model in a two-layer system: a soil layer and a groundwater family of hydrologic models developed specifically layer. These two components correspond to a for the analysis of the impact of climate change quick and slow runoff response to effective on runoff. Kaczmarek (1993) presents the theo- precipitation. retical development for a single-layer lumped watershed rainfall runoff model-CLIRUN. Kacz- The soil layer generates runoff in two ways. First marek (1996) presents the application of CLIRUN there is a direct runoff component, which is the to Warta River catchment, Poland. Another cor- portion of the effective precipitation (precipita- nerstone publication on the family of hydrologic tion plus snowmelt) that directly enters the stream models and water balance components is pre- systems. The remaining effective precipitation is sented in Cohen et al. (1999). CLIRUN-II (Strze- infiltration to the soil layer. The direct runoff is a pek et al. 2008) is the latest in the “Kaczmarek function of the soil surface and modeled differ- School� of hydrologic models applied to the anal- ently for frozen soil and non-frozen soil. The infil- ysis of water flow and economic impacts of the tration then enters the soil layer. A nonlinear set High Dam in Egypt. It incorporates most of the of equations determines how much water leaves features of the water balance module WATBAL the soil as runoff, how much is percolated to the and CLIRUN, but was developed specifically to groundwater, and how much goes into soil stor- address extreme events at the annual level, model- age. The runoff is a linear relation of soil water ing low and high flows. CLIRUN and WATBAL storage and percolation is a nonlinear relation- did very well in modeling mean monthly and ship of both soil and groundwater storages. The annual runoff, important for water supply studies, groundwater receives percolation from the soil but was not able to accurately model the tails of layer, and runoff is generated as a linear function runoff distribution. CLIRUN-II has adopted a of groundwater storage. two-layer approach following the framework of the SIXPAR hydrologic model (Gupta and Soil water processes have six parameters simi- Sorooshian 1985) and a unique conditional lar to the SIXPAR model (Gupta and Sorooshian parameter estimation procedure was used. In the 1983) that are determined via the calibration following section a brief description of the com- of each watershed. When CLIRUN-II is cali- ponents of the model will be presented. brated in a classical rainfall-runoff framework, the results are very good for the 25th to 75th CLIRUN-II models runoff as a lumped water- percentile of the observed streamflows, produc- shed with climate inputs and soil characteristics ing an R2 value of 0.3 to 0.7 However, for most averaged over the watershed, simulating runoff at water resource systems, the tails of the stream- a gauged location at the mouth of the catchment. flow distribution are important for design and CLIRUN can run on a daily or monthly time operation planning. To address these issues, a step. In the CLIRUN-II system, water enters via concept know as localized polynomial—devel- precipitation and leaves via evapotranspiration oped by Block and Rajagopalan (2008) for and runoff. The difference between inflow hydrologic modeling of the Nile River—was and outflow is reflected as change in storage extended to calibration of rainfall runoff mod- in the soil or groundwater. A suite of potential eling in CLIRUN-II (Strzepek et al. 2008). evapotranspiration models are available for use in When calibrating, each observed year is catego- CLIRUN-II. For this study, the rized as to whether it falls into a dry year (0–25 14 E C O N O M I C S O F A D A P T AT I O N T O C L I M A T E C HAN G E Figure 2  Flow Chart of Model Sequencing Location GCM GENERAL CIRCULATION MODEL TEMPERATURE PRECIPITATION Surface Slope CliRun CLIMATE RUNOFF TEMPERATURE PRECIPITATION TEMPERATURE RAINFALL RUNOFF Soil Composition Reserve Specifications Crop Type Discount Rate IMPEND INVESTMENT MODEL FOR CliCrop PLANNING ETHIOPIAN CLIMATE CROP AND NILE DEVELOPMENT WATER RESOURCE ALLOCATIONS IRRIGATION DEMAND CROP YIELD Reservoir Specifications River Basin Management Municipal and Industrial Demand WEAP WATER EVALUATION AND PLANNING RESOURCE ACCOUNTING Discount Rate CGE COMPUTABLE GENERAL EQUILIBRIUM percent of the distribution), a normal year (25– data when available, along with the Climate 75 percent), or a wet year (greater than 75 per- Research Unit’s 0.5° by 0.5° global historical cent). Separate model parameters were estimated precipitation and temperature database. CLI- for the three different classes of annual stream- RUN-II is a two-layer, one-dimensional infiltra- flow. The Climate Research Unit (CRU) and tion and runoff estimation tool that uses historic Global Runoff Data Center (GRDC) are the surfaces. A 0.5° by 0.5° historic global surface two major data sources for the CLIRUN-I. Pre- flow database generated by the Global Runoff cipitation and temperature data obtained for the Data Center (GRDC) is used for modeling the CLIRUN-II simulations were used to estimate surface flow, as explained above. the availability of water at a subbasin scale. His- torical climate data for each basin were gathered using available precipitation and temperature G h a n a CO U N T RY ST U DY 15 Sector-Specific Approaches shocks simultaneously on all sectors of the economy. Third, CGE models are able to take into consider- ation secondary or feedback effects caused by a The modeling of the impacts of climate change given shock, and are therefore suitable for analyzing in the selected sectors was carried out using a climate-related issues.5 suite of models (CLIRUN, CLICROP, IMPEND, WEAP, DIVA) that are briefly described below. Assumptions about the behavior of economic Figure 2 depicts the modeling process, starting agents in the CGE model are grounded in eco- with the climate forecasts. Climate data from the nomic theory and the magnitudes of some model GCMs are entered into CLIRUN and CLICROP parameters are determined by resort to second- in order to produce streamflow runoff estimates ary econometric studies. Producers maximize and crop irrigation demand estimates, respec- profits (and thus minimize costs) under constant tively. Inflows calculated using CLIRUN are then returns to scale and consumers maximize utility fed into IMPEND, where storage capacity and subject to their budget constraints. It was irrigation flows are optimized to maximize net assumed that the economy is perfectly competi- benefits. The outputs from IMPEND along with tive and that markets clear. The CGE model was the irrigation demands estimated from CLICROP calibrated to a regional 2005 social accounting are then entered into the Water Evaluation and matrix (SAM) of Ghana jointly constructed by Planning System (WEAP), where water storage the International Food Policy Research Institute and hydropower potential are modeled based on and the Ghana Statistical Service (GSS) using their interaction with the climate and socioeco- national accounts, trade and tax data, and nomics of the river basins. household income and expenditure survey data. Further details on the features of the Ghana Finally, this information is fed into a dynamic com- CGE model are provided in Annex 6. putable general equilibrium (CGE) model where the economic implications of the modeled data are The CGE modeling approach captures three assessed. Within the river basin model there is, main mechanisms by which climate change is however, one interaction with the potential for expected to influence Ghana’s economic growth nonlinearity. The interaction between IMPEND and development. First, it estimates the economy- and WEAP is an iterative process depending on wide impacts of productivity changes in dry-land the scenario. Reservoir flow calculated in WEAP agriculture, using the CLICROP inputs. Second, may change previous inputs into IMPEND, thus it incorporates the fluctuations in hydropower requiring the net benefits to be re-calculated and production due to variation in river flow. River their implications re-modeled in WEAP. flow will only affect agricultural production if the irrigated area available for planting is greater The CGE modeling approach was chosen to model than the maximum potential area that could be the impacts of climate change because it has a num- irrigated given water availability constraints. ber of features that make it attractive for analyzing Third, it will account for changes in temperature such issues. First, these models portray the function- and precipitation, which in turn influence main- ing of a market economy, including markets for tenance requirements for infrastructure, particu- labor, capital, and commodities, and account for the larly roads. Rainfall or temperature realizations role of relative prices and market mechanisms in the decisions of economic agents. Second, CGE models 5 An alternative approach is to use partial equilibrium (i.e. belong to the class of general equilibrium models econometric) models, which are limited in the sense that they can consider the impact of only one variable at a time in a single that are able to determine the impacts of exogenous sector. 16 E C O N O M I C S O F A D A P T AT I O N T O C L I M A T E C HAN G E outside of the band of design tolerances are likely (2) cocoa, (3) forestry and logging, and (4) fish- to require more frequent or more expensive main- ing. Agriculture contributes to 40 percent of real tenance costs. In the CGE model, these greater GDP, with the cocoa sector accounting for 32 per- maintenance requirements result in either less cent of exports. Overall, over 50 percent of the rapid expansion in the road network for a given population derives their livelihood from agricul- level of spending on roads, or an actual shrinkage ture. Growth in the sector has been variable in the in the network if the resources necessary to main- past few years. Starting from a low of 4.4 percent tain the network are unavailable. in 2002, the sector’s growth rate rose to a high of 7 percent in 2004 before declining to another We now turn to the specific approaches used to low of 3.1 percent in 2007 (Figure 3). The growth measure the impacts of climate change in the decline in 2007 was due to drought, particularly selected sectors—agriculture, road transport, in the forest zone where cocoa is cultivated. The water and energy, and coastal zone. For each 2009 budget projected growth of 5.3 percent in sector, we briefly describe the sector’s contribu- 2009 and 5.9 percent in 2010. tion to the economy, its vulnerability to climate change, the baseline (BAU) scenario, and the Vulnerability to Climate Change. Across Ghana’s methodology used. agroecological zones, there are some significant differences in the regional distribution of agri- Agriculture cultural GDP. The forest zone accounts for 43 Contribution to the Economy. The Ghanaian economy, percent of agricultural GDP, compared to about like that of most developing countries, is based on 10 percent in the coastal zone, and 26.5 and 20.5 agriculture. The agricultural sector is composed percent in the southern and northern savannah of four subsectors: (1) food crops and livestock, zones, respectively. The northern savannah zone Figure 3  Trends in Agricultural Growth 2002 to 2010 35.0 30.0 25.0 20.0 GROWTH RATE (% P.A.) 15.0 10.0 5.0 0.0 2002 2003 2004 2005 2006 2007 2008 2009 2010 -5.0 -10.0 AGRICULTURE CROPS AND LIVESTOCK COCOA FORESTRY AND LOGGING Source:  (World Bank 2009) G h a n a CO U N T RY ST U DY 17 is the main producer of cereals, accounting for The plan has been developed using a largely par- more than 70 percent of the country’s sorghum, ticipatory process and based on food and agricul- millet, cowpeas, groundnuts, beef and soybeans. ture development policy II (FASDEP II) objectives, On the other hand, the forest zone supplies a large with a target for agricultural GDP growth of at share of higher-value products such as cocoa and least 6 percent annually and government expen- livestock (mainly commercial poultry) (Breisinger diture allocation of at least 10 percent within the et al. 2008). Ghana’s agricultural sector is highly plan period. These targets are in conformity with vulnerable to climate change and variability agricultural performance targets of the country’s because it is predominantly rainfed and is charac- National Development Planning Commission terized by low levels of productivity. (NDPC) and other relevant government develop- ment policies. Ghana’s agriculture and irrigation Baseline. The current development strategy for policies are expected to contribute significantly to agriculture is to ensure sustainable utilization the achievement of the MDGs. of resources and commercialization of activities with market-driven growth. Commodity target- Irrigation in Ghana contributes only about 0.5 ing for food security and income diversification percent of the country’s agricultural production. of resource-poor farmers is given a high priority. About 11,000 hectares (out of a potential irrigable The strategy seeks to enhance the commodity area of 500,000 hectares) have been developed for value chain using science and technology. There irrigation, and even the developed area is largely is also an emphasis on environmental sustain- underutilized due to institutional, management, ability and greater engagement with the private input, and other constraints. The investment plan sector and other partners (GoG/NDPC 2009). concluded that: “It is necessary that the Govern- As stated in the Ghana Poverty Reduction Strat- ment regards irrigated agricultural infrastructure egy (GPRS, GoG 2003), Ghana’s agricultural as a public good, which can be leased to water development strategy is to ensure a modernized users’ associations and/or private management agriculture culminating in a structurally trans- bodies to ensure efficiency through better manage- formed economy that will provide food security, ment practices.� METASIP estimated an irriga- employment opportunities, and reduced poverty tion funding gap of $423 million in 2009, rising to in line with the goal set for the sector in GPRS about $1.6 billion in 2015 (GoG 2009). METASIP I. The strategy emphasizes the sustainable utili- noted that climate change— which has had a sig- zation of all resources and commercialization of nificant adverse impact on the nation’s agriculture activities in the sector based on market-driven over the years—added uncertainties to the agricul- growth. Climate change impacts and national ture sector. The report also said that even though plans to deal with these changes are not explicitly irrigated agriculture is well-known to be important, stated in national and agricultural sector goals, it is yet to be significant in Ghana. although there is provision for irrigation develop- ment in various parts of the country. The policy Methodology. As indicated earlier, the impact of document emphasizes that small- and large-scale climate change on the agricultural sector was irrigation systems and efficient water harvesting estimated using CLICROP. CLICROP is a and management systems are required to reduce generic crop model used to calculate the effect reliance on rainfed agriculture (GoG 2003--). of changing daily precipitation patterns caused by increased CO2 on crop yields and irrigation Recently the government of Ghana issued vol- water demand. It was developed in response to ume 1 of the Medium Term Agriculture Sector Invest- the available crop models that use monthly aver- ment Plan (METASIP) 2009–2015 (GoG 2009). age rainfall and temperature to produce crop 18 E C O N O M I C S O F A D A P T AT I O N T O C L I M A T E C HAN G E outputs. These monthly models do not capture and the fraction already under irrigation; irriga- the effects of changes in precipitation patterns, tion investment and maintenance cost per ha of which greatly impact crop production. For exam- irrigated land; and the current level of provision ple, most of the IPCC GCMs predict that total of extension services. These pieces of informa- annual precipitation will decrease in Africa, but tion were then fed as inputs into the CGE model rain will be more intense and therefore less fre- as shocks/stressors caused by the predicted quent. Currently, CLICROP is able to produce weather changes from the GCMs. The model predicted changes in crop yields due to climate then computes the values of the key economic change for both rainfed and irrigated agriculture, variables based on the response of economic as well as changes in irrigation demand. agents to these climate-related shocks. A detailed description of the CLICROP methodology is Five yield estimates (one for each of the four presented in Annex 1. development stages, and one for the whole sea- son) were computed using Equation 1. A specific module on the impact of climate change on livestock productivity was created for this study. To model the effect of climate on live- [1 – Y ] [1 – ETC ETA ] Y =K d d Equation 1: a m y d stock, this analysis relies on the approach and results of a structural Ricardian model of Afri- Where Ya = predicted actual yield can livestock developed by Seo and Mendelsohn Ym = maximum yield (2006). This approach measures the interaction Ya / Ym = % Yield d d between climate and livestock and considers the Ky = yield coefficient, different for development stage d to y adaptive responses of farmers by evaluating ETCd = sum of daily ET crop demand for which species are selected, the number of ani- development stage d mals per farm, and the net revenue per animal ETAd = sum of daily actual ET for under changes in climate. The current analysis development stage d transfers the findings from Seo and Mendelsohn %Yieldd = ratio of actual yield over maximum yield, value reported by to the Ghana-specific context. Seo and Mendel- CLICROP sohn rely on a survey of over 5,000 livestock  farmers in ten African countries. In this data set, The inputs into CLICROP include weather the variation in livestock productivity and (temperature and precipitation), soil parameters expected incomes in different regions demon- (field capacity, wilting point, saturated hydraulic strates a clear relationship to regional climate, conductivity, and saturation capacity), historic which provides a mechanism—through spatial yields for each crop by ecological zone, crop dis- analogue—to statistically analyze how climate tribution by ecological zone, and current irriga- change may affect livestock incomes across tion distribution estimates by crop. These were Africa. The authors develop a three-equation used to compute estimates for changes in annual farm-level model. The first equation predicts the production (yield) for both irrigated and rainfed probability of selecting each livestock type as the crops as well as irrigation demand (mm/ha) for primary animal for the farm, the second predicts three industrial crops and four food crops (See the net income of each animal, and the final Annex 1). The estimated yields reflect the reduc- equation predicts the number of animals on tions in yield both due to the lack of available each farm. Farm net revenues are the sum prod- water and due to the overabundance of water uct of these three outputs; that is, the probability that causes waterlogging. Additional data of selecting each type of animal multiplied by obtained included total area of irrigable land the number of animals and then the expected G h a n a CO U N T RY ST U DY 19 Table 5  Trends in the Growth Rate of the Transport Sector, 2002–07 (%) Subsector 2002 2003 2004 2005 2006 2007 2002–07 Transport, Storage, and 5.7 5.8 5.6 6.0 7.2 6.0 6.1 Communications Source:  ISSER (2008) Table 6  Share of the Transport Sector in Total GDP in Purchaser’s Value, 2002–2007 (%) Subsector 2002 2003 2004 2005 2006 2007 2002–07 Transport, Storage and 6.0 5.4 4.7 5.1 5.1 5.0 5.2 Communications Source:  ISSER (2008) income per animal, summed across animal types. climate change on road transportation infra- Details of the livestock modeling approach are structure. The extent of the impacts will, to a presented in the Annex 1. large degree, be influenced by the environ- ment in which the infrastructure is located. For Transport example, increased precipitation levels will affect Contribution to the Economy. The transport sector— moisture levels in the soil, hydrostatic buildup covering roads, railways and maritime, is one of behind retaining walls and abutments, and the the six subsectors under the services sector of the stability of pavement subgrades. Runoff from Ghanaian economy. Over the past year, the trans- increased precipitation levels will also affect port sector has received substantial allocations of streamflow and sediment delivery in some loca- public resources, especially in the road transport tions, with potentially adverse effects on bridge sector. The objective is for Ghana to become a foundations. And sea level rise will affect coastal transport hub for West Africa. To achieve this, the land forms, exposing many coastal areas to government is continuing with the maintenance storm surge as barrier islands and other natural and completion of ongoing projects as well as ini- barriers disappear. tiating new development projects. Currently there are plans to improve the railway sector to divert Projected warming temperatures and more heat some of the traffic from roads to reduce the high extremes will affect road transport infrastruc- maintenance costs. The transport subsector’s per- ture. Periods of excessive heat are likely to formance has declined by 17 percent, from 7.2 per- increase wildfires, threatening communities and cent in 2006 to 6 percent in 2007 (ISSER 2008) infrastructure directly. Longer periods of (Table 5). Share of the transport sector in the total extreme heat may compromise pavement integ- GDP in purchase value was stagnant during the rity and cause thermal expansion of bridge 2002–07 at an average of 5.2% (Table 6) joints, adversely affecting bridge operation and increasing maintenance costs. Vulnerability to Climate Change. The primary focus in this subsection is on the direct impacts of 20 E C O N O M I C S O F A D A P T AT I O N T O C L I M A T E C HAN G E The frequency, intensity, and duration of intense Although the impact of sea level rise is limited to precipitation events are important factors in coastal areas, the effect of intense precipitation design specifications for road transportation on road transportation infrastructure and opera- infrastructure. Projected increases in intense tions is not. Table 7 summarizes the potential cli- precipitation events will necessitate updating mate changes and the associated vulnerability of design specifications to provide for greater Ghana’s road transportation system. capacity and shorter recurrence intervals, increasing system costs. The most immediate Baseline. Road transport is by far the dominant impact of more intense precipitation will be carrier of freight and passengers in Ghana’s land increased flooding of coastal roads. Expected transport system. It carriers over 95 percent of sea level rise will aggravate the flooding because all passenger and freight traffic and reaches most storm surges will build on a higher base, reach- communities, including the rural poor. Main- ing farther inland. Low-lying bridge and tunnel tenance of the road asset is critical to achiev- entrances for roads will also be more susceptible ing the accessibility, affordability, reliability, and to flooding, and thousands of culverts could be safety required for Ghana’s effective develop- undersized for flows. Engineers must be pre- ment. Ghana’s road network was about 42,000 pared to deal with the resulting erosion and sub- kilometers in 2000. The network has increased sidence of road bases, as well as erosion and rapidly since then, reaching 50,000 kilometers in scouring of bridge supports. Interruption of 2001 and 64,000 kilometers by the end of 2005 road traffic is likely to become more common (GoG/Ministry of Transport 2008). In the mean- with more frequent flooding. time, improvements in road condition have been Table 7  Road Sector Vulnerability to Potential Climate Change Potential Climate Change Vulnerability Increase in intense precipitation events Increased flooding of roads Overload of drainage systems, causing backup and street flooding Increases in road washout and damage to road structures Impact on soil moisture levels, affecting structural integrity of roads, bridges, culverts Increase in intense temperature Impacts on pavement and concrete construction practices Thermal expansion on bridge expansion joints and paved surfaces Pavement integrity, such as asphalt Sea Level Rise Inundation of roads Erosion of road base and bridge supports Table 8  Dose-Response Descriptions for Maintenance Costs Precipitation Temperature Paved Roads, Change in annual maintenance costs per km Change in annual maintenance costs per km Existing per 10 cm change in annual rainfall projected per 3°C change in maximum of monthly maxi- during life span relative to baseline climate mum temperature projected during life span Unpaved Roads Change in annual maintenance costs per 1% Not estimated; impact likely to be minimal change in maximum of monthly maximum precipitation projected during life span G h a n a CO U N T RY ST U DY 21 gradual. For example, the road condition in 2004 categories, the underlying concept is to retain the was 36 percent good, 27 percent fair, and 37 per- design life span for the structure. This premise was cent poor, as compared to the desired condition established as a baseline requirement in the study of 70 percent good, 20 percent fair, and not more due to the preference for retaining infrastructure for than 10 percent poor. The rapid increase in road as long as possible rather than replacing the infra- length has stretched resources for maintenance structure on a more frequent basis. Achieving this without necessarily improving accessibility, reli- goal may require a change in the construction stan- ability, and affordability. Deferred maintenance dard for new construction or an increase in mainte- of roads also has cost implications. Apart from nance for existing infrastructure. As documented, increasing vehicle operating cost to service pro- this strategy is realized individually for the various viders, the rehabilitation cost to government infrastructure categories. The dose-response rela- could be as much as 8–10 times greater when car- tionship between climate change and the cost of ried out at a future date. Improvements in road maintaining road networks is a central concern for condition could be achieved through planned climate change adaptation. To determine the costs expansion of the network, effective maintenance of climate change impact, two different elements and financial management, and improvements in are considered: (1) costs to maintain existing roads, the local construction industry. and (2) costs to adapt roads by improving the roads at regular design life intervals (Table 8). Methodology. The impact of climate change on roads is assessed using stressor-response methodology. In Paved road maintenance this context, a stressor-response value is defined In determining the climate-change-related costs as the quantitative impact that a specific stres- for paved roads, the underlying focus is to maintain sor has on a specific road infrastructure element. the existing road network by increasing spending For example, an increase in precipitation level is on maintenance to retain the 20-year design life going to have a specific quantitative impact on an cycle. The 20 year life cycle is based on the unpaved road in terms of the impact on its life span assumption that roads are repaved at the end of based on the degree of increase in precipitation. each 20-year life cycle in a standard maintenance cycle. To determine the increased impact of cli- In this particular application, two primary climate mate change stressors on this maintenance cycle, stressors were considered: temperature and precipi- the impact of temperature and precipitation is tation. Cost data for the general study were deter- applied to the road. These two factors are the sig- mined based on both commercial cost databases nificant factors for road maintenance; precipitation and specific country data, where available. The impacts both the surface and the roadbed, while stressor-response factors were divided into two gen- temperature impacts the asphalt pavement based eral categories: (1) impacts on new construction on the design of the asphalt mix. Using this costs, and (2) impacts on maintenance costs. New approach, the cost increase for the annual mainte- construction cost factors are focused on the addi- nance based on dose-response values is based on tional cost required to adapt the design and con- the concept of infrastructure life-span decrements. struction of a new infrastructure asset, or In this approach, the impact is based on potential rehabilitating the asset, to changes in climate life-span reduction that could result from climate expected to occur over the asset’s life span. Mainte- change if maintenance practices were not adjusted nance cost effects are defined as those maintenance to meet the increased climate stress. costs (either increases or decreases) that are antici- pated to be incurred due to climate change to Implementation of this approach involves two achieve the design life span. In each of these basic steps: (1) estimating the life-span decrement 22 E C O N O M I C S O F A D A P T AT I O N T O C L I M A T E C HAN G E that would result from a unit change in climate temperature for existing paved roads (FDOT stress; and (2) estimating the costs of avoiding this 2009a; FEMA 1998; Miradi 2004; Oregon DOT reduction in life span. For example, if a climate 2009; Washington DOT 2009). stressor is anticipated to reduce the life span by 2 years or 10 percent, and the cost to offset each Equation 3 also illustrates that our estimate of the percent of reduction is equal to a percentage of potential reduction in life span associated with a the current maintenance cost, then the total given change in climate stress reflects the contri- would be (10 percent)(current maintenance cost) bution of that stressor to baseline maintenance to avoid decreasing the current design life span. costs (that is, the variable SMT). For paved roads, precipitation-related maintenance represents four Equation 2: MTERB = (LERB)(CERB) percent of maintenance costs and temperature- Where MTERB = Change in maintenance costs for related maintenance represents 36 percent existing paved roads associated (Miradi 2004). with a unit change in climate stress LERB = Potential percent change in life span for existing paved roads After estimating the potential reduction in life associated with a unit change in climate stress span associated with a given climate stressor, CERB = Cost of preventing a given life- we estimate the costs of avoiding this reduc- span decrement for existing paved tion in life span. To estimate these costs, we roads assume that the change in maintenance costs To estimate the reduction in life span that could would be approximately equal to the product result from an incremental change in climate stress of (1) the potential percent reduction in life (LERB), it is assumed that such a reduction is equal to span ( LERB) and (2) the base construction costs the percent change in climate stress, scaled for the of the asset. Therefore, if we project a 10 per- stressor’s effect on maintenance costs: cent potential reduction in life span, we esti- mate the change in maintenance costs as 10 DS percent of base construction costs. We esti- Equation 3: LERB = (SMT) BaseS mate base construction costs for a primary Where LERB = Potential percent change in life paved road of $500,000 per km. span for existing paved roads associated with a unit change in climate stress Unpaved road maintenance DS = Change in climate stress (i.e., pre- To estimate dose-response values for unpaved cipitation or temperature) road maintenance costs, an approach is adopted BaseS = Base level of climate stress with no that associates costs with a unit change in climate climate change stress as a fixed percentage of maintenance costs, SMT = Percent of existing paved road maintenance costs associated with as illustrated by Equation 4. a given climate stressor (i.e., precipitation or temperature) Equation 4: MTURR = M x BURR Where MTURR = Change in maintenance costs for As indicated in Equation 3, the potential change unpaved roads associated with a unit change in climate stress in life span is dependent on the change in climate M= Cost multiplier stress. For precipitation effects, a reduction in life BURR = Baseline maintenance costs span is incurred by existing paved roads with every 10 cm increase in annual rainfall. For tem- The stressor-response relationship represented by perature, a life-span reduction is incurred with Equation 4 is applied as the change in mainte- every 3°C change in maximum annual nance costs associated with a 1 percent change in G h a n a CO U N T RY ST U DY 23 Table 9  Electricity and Water Subsectors, growth rates of real GDP Year 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 Average Growth Rate of 10.2 -10 7.8 4.5 4.2 4.1 4.2 3.7 12.4 24.2 -15.0 4.0 Real GDP Source:  ISSER (2008). Table 10  Electricity and Water’s Share of GDP and Contribution to Overall GDP Growth Year 2005 2006 2007 Share of GDP (%) 2.6 3.1 2.5 Contribution to Growth (%) 0.3 0.7 -0.5 Source: ISSER (2008) maximum monthly precipitation. Research has in 2006 to -0.5 percent in 2007 (Table 10). In terms demonstrated that 80 percent of unpaved road of contribution to industrial GDP, the subsector’s degradation can be attributed to precipitation, share declined from 12.1 percent in 2006 to 9.5 while the remaining 20 percent is due to traffic percent in 2007. rates and other factors (Ramos-Scharron and MacDonald 2007). Given this 80 percent attribu- The major challenge in 2007 was several months tion to precipitation, maintenance costs increase of inadequate power supply, which came to an by 0.8 percent with every 1 percent increase in end in September. The negative growth rate was the maximum of the maximum monthly precipi- mainly due to the electricity subsector, which was tation values projected for any given year. Pub- forced to cut back power because of the low level lished data indicate that the baseline cost of of water in the Akosombo Dam. Electricity pro- maintaining an unpaved road is approximately duction from the Akosombo hydro station in 2007 $960 per km (Cerlanek et al. 2006). Therefore, for was 3,104.33 gigawatt-hours (GWh), or 33.9 per- every 1 percent increase in maximum precipita- cent lower than the 4,689.91 GWh produced in tion, we assume a maintenance cost increase of 2006. Production of electricity from Akosombo $7.70 per km. has declined continuously both in volume and percentage between 2005 and 2007; from Water and energy 4,717.09 GWh (69.51 percent) in 2005 to 3,104.33 Contribution to the economy. The energy subsector GWh (44.07 percent) in 2007. Likewise, electric- comprises electricity, water, and petroleum. After ity production from the Kpong hydro station has reaching a peak growth rate of 24.2 percent in declined from 910.64 KWh (13.42 percent) in 2006, growth contracted by 15 percent in 2007, 2005 to 622.64 KWh (8.84 percent) in 2007. The which was far below the target of 10 percent set in urgency of finding alternative sources of energy the 2008 budget. The negative growth rate reduced to supplement hydropower cannot be overem- the subsector’s share in overall GDP from 3.1 per- phasized. The production of electricity from the cent in 2006 to 2.5 percent in 2007 (Table 9). Its two thermal plants has increased continuously contribution to GDP growth fell from 0.7 percent (both in volume and percentage) over the same 24 E C O N O M I C S O F A D A P T AT I O N T O C L I M A T E C HAN G E period. Total electricity produced in 2007 (which typically provides about 70 percent of the coun- included production from emergency stations) try’s energy needs, produces only 30 percent dur- was 7,043.61 GWh, a decline of 16.45 percent ing periods of low water levels in the dam, which from 2006 level of 8,428.97 GWh. poses serious implications for industrialization and private sector development. Water for domes- Energy: vulnerability to climate change tic use and plant use has become scarcer due to Ghana’s energy sector has already shown signs of the combined effect of declining rainfall, lower- susceptibility to climate change, particularly the ing of the groundwater table, drying streams and effect of highly variable precipitation patterns on wells, and poor water retention capacity of the hydropower production. At present, 67 percent soils. Since most farmers rely on rainfed agricul- of electricity generation in the country is from ture (irrigation is not common in most areas), hydropower and 33 percent is from petroleum- these factors also contribute to large inter-year fired thermal generation (Ghana Energy Com- variations in agricultural productivity. mission 2006), with a small contribution of less than 1 percent from small-scale solar systems. Energy: baseline The drought of the early 1980s (1980 to 1983) The existing power plants are the Akosombo and not only affected export earnings through crop Kpong hydropower stations, the Takoradi thermal losses, but also caused large-scale human suffer- power station, the Tema diesel power station, and ing and called into question the nation’s contin- the Ghana (Osagyefo) Power Barge at Effasu in the ued dependence on hydroelectric power. As a Western Region. The Volta River Authority (VRA) result, the development of petroleum-fired ther- operates the Akosombo and Kong hydro plants as mal plants is now viewed as an energy security a cascade of hydro plants and thus their electricity necessity in Ghana. The current rate of electrifi- outputs are directly related. Akosombo and Kong cation presents the challenge of providing energy hydropower had delivered, on average, a total of in a suitable form to a large population, primarily 5,815 gigawatt-hours (GWh, million units of elec- rural but increasingly urban, while at the same tricity) annually from 1990–2004. The maximum time minimizing greenhouse gas emissions. generation of 6,851 GWh occurred in 1997. The Takoradi thermal power station is located at System losses in electricity distribution are about Aboadze, near Takoradi, the Western Region’s 25 percent, with wastage in the end-use of elec- capital. It consists of two blocks of generating tricity also estimated at about 30 percent. Losses plants: a 330-megawatt (MW) combined cycle in energy supply and inefficient use of energy plant and 220MW open or single-cycle plant. VRA contribute to the high levels of energy consump- has a 30MW installed capacity (37.5 MVA) diesel tion. Higher ambient temperatures levels due to station at Tema. The Ghana (Osagyefo) Power climate change are a contributing factor to the Barge constructed in the late 1990s is a 125-mega- increased transmission losses. watt open cycle plant comprising two modern 62.5 megawatt gas turbines. The gas wells intended to Water: vulnerability to climate change fuel the barge have not as yet been drilled or devel- Despite the fact that Ghana has considerable sur- oped. The barge has therefore not been fueled or face and groundwater resources, water resources operated ever since its arrival in the country. Nei- will be hit hard under climate change. Under a ther has it been connected to the grid. changed climate, lower precipitation, enhanced evaporation, and more frequent droughts will The primary fuel for electricity generation was diminish water availability in the Lake Volta res- largely hydro until 1998, when the thermal power ervoir. In addition, the Akosombo Dam, which station at Aboadze commenced operations. The G h a n a CO U N T RY ST U DY 25 main fuel for the thermal power station at Water: baseline Aboadze has been light crude oil, but it also used The provision of safe water to human settlements distillate oil for start-up and shut-down of the tur- and industry in Ghana is the responsibility of two bines. Primary electricity generation was about agencies operating under the Ministry of Water 7,224 GWh in 2000, but dropped to 5,901 GWh Resources, Works and Housing. These are the in 2003. Electricity production comprised mainly Ghana Water Company Ltd., which is responsi- hydro, emanating from Akosombo and Kpong ble for the supply of safe water to urban areas, hydroelectric power stations. There was a drop in and the Community Water and Sanitation Agency the hydro share from about 91.5 percent in 2000 (CWSA), which supplies water to rural communi- to 66 percent in 2003. While the hydro share of ties. It is also responsible for about 113 small-town primary energy dropped, the thermal component piped water systems. rose from about 8.5 percent in 2000 to about 34 percent in 2003. Thermal generation is largely Currently, the GWCL operates urban water supply crude-oil based, coming from the Takoradi ther- systems in 82 communities throughout the country. mal power station at Aboadze, near Takoradi in The installed capacity of all systems is about the Western Region. Electricity imports are pri- 737,000m3/day. Present potable water demand in marily from neighboring Cote d’Ivoire west of the urban areas is estimated at about 1,049,306m3/ Ghana. Exports are largely to Togo and Benin, day based on 2004 estimates, while supply is about also neighboring countries east of Ghana. 572,128m3/day. Hence the effective urban supply coverage is about 55 percent. According to the Ghana’s strategic plan for the energy sector cov- Ghana Demographic and Housing Survey, only ers the areas of electricity, petroleum, energy about 41 percent of people living in urban areas demand sectors of the economy, and fuelwood have piped water in their homes, and a similar and renewables. Ghana’s energy policies are number of about 42 percent purchase water from designed to address several issues—such as the tanker services or a neighbor’s residence. In gen- rapidly growing demand for energy by all sec- eral, urban water supply is inadequate. Water is tors, the risk of imbalance between energy pro- rationed to many consumers with only a few cus- duction and natural resource use, the risk of tomers able to receive 24-hour supply. About 48 reliance on fuel imported from volatile interna- percent of the rural population does not have tional markets, and an inadequate investment access to potable water. This state of affairs in the and institutional framework to match such grow- supply of safe water does not enable both urban ing demand. The Ghana Strategic National Plan and rural settlements to adequately perform their 2006–20 estimates that electricity (70 percent functions as production centers. hydro-based) demand through 2015 will be between 13,800 to 16,300 GWh. The Ghana Ghana has a long way to go in order to achieve a Energy Commission estimates short-term 100 percent potable water supply coverage rate. demand (2008) in Ghana to be between 11,300 Nationally, over 50 percent of both the rural and to 13,500 GWh. In the medium term (2015), the urban population has access to potable water. commission estimates the demand to increase to However, there are inequalities among the regions 13,800 to 16,300 GWh. In the longer term in northern Ghana, especially areas having rates (2020), estimated demand is 20,100 to 22,300 far below the national average (Figure 4). GWh. The strategic plan estimates grand total Methodology. The allocation of surface water capital investment to be between $4.3 and $5.4 resources to hydropower production and irriga- billion for the strategy investment 2006–20 to tion was undertaken using a planning model cover such increasing demand. developed for Ethiopia, the IMPEND model 26 E C O N O M I C S O F A D A P T AT I O N T O C L I M A T E C HAN G E Figure 4  Rural-Urban Potable Water Coverage by Region, 2006 and 2007 (%) 90 80 70 60 PERCENT 50 40 30 20 10 0 ASHANTI BRONG CENTRAL EASTERN GREATER NORTHERN UPPER UPPER VOLTA WESTERN AHAFO ACCRA EAST WEST RURAL PERCENT COVERED IN 2006 RURAL PERCENT COVERED IN 2007 URBAN PERCENT COVERED IN 2006 URBAN PERCENT COVERED IN 2007 (Investment Model for Planning Ethiopian the impact of water capacity changes on GDP, Nile Development) (Block and Strzepek 2009). welfare, and other economic variables. Further IMPEND was developed to plan hydropower and details on IMPEND are provided in Annex 3. irrigation reservoirs on the Upper Blue Nile River in Ethiopia. It is a water accounting and optimiza- Coastal zone tion program written in GAMS. IMPEND inputs Contribution to the economy. Ghana’s coastal zone is of include measurements or estimates of monthly immense significance to the economy. There are five stream flow, net evaporation at each reservoir, large cities located in the coastal zone and about a electrical demand, discount rate, along with res- quarter of the population resides in this area. The ervoir attributes including storage, maximum coastal zone is also the location of major infrastruc- head, volume, and surface area. These and GCM ture, such as the ports at Tema and Takoradi and inputs—such as predicted river runoff and river the Tema oil refinery. Major economic activities basin evaporation—are then used to compute the in the coastal zone include oil and gas exploration, aggregate water inflow into the hydro units of the cement production, and aluminum smelting. Stra- model minus evaporation. The output, combined tegic investments include oil and gas production with other technical data, is then used to esti- scheduled to begin in 2012 and a proposed thermal mate the aggregate annual energy production for plant in the Tema area. With the advent of oil and the baseline and climate change scenarios. The gas production, there is a strong likelihood of refin- results are fed into the CGE model to simulate eries being located in the area in the future. G h a n a CO U N T RY ST U DY 27 Table 11  Projected Population of the Coastal Regions and Estimated Popu- lation at risk from Sea Level Rise Estimated Areas at Population Estimated Risk to Sea Level Estimates in Coastal Projected Population Rise (National Areas Risk to Region Area Population % By Region Density Communication) Sea Level Rise Sq km Persons $ Persons per Sq km Persons Sq km Western 23,921 2,358,849 10.54% 99 170 16,830 Central 9,826 1,777,337 0.001% 181 200 36,200 Greater Accra 3,245 3,903,564 0.01% 1,203 Volta 20,570 2,251,180 10.06% 87 Greater Accra 23,815 6,154,744 27.49% 258 740 191,245 and Volta Costal 57,562 10,290,930 20.60% 1,570 1,110 244,275.46 Regions Total Country 23,533 22,387,911 94 Source:  GSS (2008). Vulnerability to Climate Change. Like most coastal cit- sea level rise. Table 11 presents the projected pop- ies around the world, in Ghana the coastal pro- ulation distribution in 2007 in the coastal zone tection systems generally rely on headland groins and the population at risk. It is estimated that or revetments, flood control structures, and beach over 240,000 people living in the coastal zone are nourishment. However, these urban systems are at risk of seal level rise (GSS 2008). vulnerable to extreme events that the current defense standards of structural protection can- Baseline. The current government policies, plans, not withstand, and are especially vulnerable to and projects for shoreline protection, urban hous- coastal flooding. Where these cities are subsiding, ing, and peri-urban slum redevelopment programs there are additional risks of extreme sea level rise are outlined in the medium-term development overtopping flood defenses. plan of the Ministry of Water Resources, Works, and Housing and the Hydrology Department. The Within the West Africa coastal states, the key outcome of discussions held with sector experts hotspots for coastal vulnerabilities to climate indicates that the current Policies and Measures change or associated sea level rise identified in the have been developed without integrating the cli- IPCC’s Fourth Assessment Report include reduc- mate impacts of sea level rise and high precipita- tion in freshwater resources in deltas and estuar- tion in the coastal zone due to budget constraints. ies, and highly sensitive coastal systems where inland migration is limited. In Ghana, coastal The sea level rise scenarios are highlighted in erosion has been a major challenge for many Ghana’s Initial National Communication to the years and has therefore been monitored in some UNFCCC under the Kyoto Protocol. Planners sites over the years. The rate of erosion ranges acknowledge that sea-level rise impacts are evi- from 4 to 12 m/year. dent; for instance, the sandy beaches on the east coast are already eroding at a phenomenal rate of about 8 Coastal populations, particularly the fishing com- m/year; and flooding of coastal communities does munities, are highly vulnerable to the effects of occur during spring tide. However, the current designs 28 E C O N O M I C S O F A D A P T AT I O N T O C L I M A T E C HAN G E do not take into account the climate-related impacts Soft infrastructure policies. The soft infra- in the shoreline protection design and construction structure policies include preparation of a com- due to the incremental cost. prehensive coastal zone management strategy addressing protection, management, sustainable The coastal policies outlined below constitute the use of wetlands and coastal wetlands, and other baseline scenario, since they do not generally con- coastal areas resources; creation of land banks for sider adaptation strategies that minimize the affordable housing; development of standards for effects of climate impacts and future vulnerability architectural drawings and engineering designs and adaptation of the costal infrastructure. The and building code; and development standards policies are presented in terms of hard and soft for engineering, infrastructure, drainage systems, infrastructure policies. coastal and electricity, and water. Hard infrastructure policies. Based on the The government of Ghana (GoG) has under- national policy matrix, the sectoral policies and taken measures to protect highly vulnerable areas measures for integrated coastal zone manage- in the eastern section of the coastline along the ment can be divided into three parts: shoreline Keta lagoon. The government has also identified protection, urban infrastructure, and peri-urban 17 erosion hotspots along the shoreline, of which slum upgrading and prevention. 10 have been identified as priority protection projects in the medium-term plan for the period The shoreline protection measures include provi- 2010–13. The total length involved is estimated at sion of adequate drainage and coastal protection 76 km and the baseline total cost amounts to infrastructure for protection of life and property; 241.3 million euros, equivalent to 3.18 million promotion of flood management system for the euros per kilometer. protection of life and property; enforcement of safety, security, and environmental standards for Methodology. Human-induced climate change rep- the construction of primary, secondary, and ter- resents many global challenges, with the coastal tiary drains; and promotion of safety in drainage zone being a particular focus for impacts and and coastal infrastructure to reduce disaster. adaptation needs. The coastal zone contains unique ecosystems and typically has higher The urban infrastructure measures include population densities than inland areas (Small increased access to safe and affordable shelter in and Nicholls 2003; McGranahan et al. 2007). It the coastal zone; promotion of urban infrastruc- contains significant economic assets and activities ture development and provision of basic services; (Bijlsma et al. 1996; Sachs et al. 2001; Nicholls et development and implementation of strategic al. 2008; Dasgupta et al. 2009). Sea-level rise, as plans for urban centers; efficient and effective a direct consequence of human-induced climate management of flood control and drainage sys- change, has significant implications for low-lying tems; and efficient and effective management of coastal areas and beyond, including the major coastal protection systems. direct impacts: inundation of low-lying areas, loss of coastal wetlands, increased rates of shoreline Finally, the peri-urban slum upgrading and pre- erosion, saltwater intrusion, higher water tables, vention measures include improved infrastructure and higher extreme water levels that cause coastal in slum areas and restrictions in the formation of flooding. Hence, coastal areas are highly vulner- new ones; and development of decent, safe, and able and could experience major impacts associ- affordable housing units for low- and medium- ated with the changing climate and its variability. income earners. For over 60 percent of the nation’s population (of G h a n a CO U N T RY ST U DY 29 Figure 5  Ghana, West Africa: (a) Geographical location, (b) Administrative units (termed provinces) and major coastal towns, and (c) The coastal zone, after Ly (1980); Sources:  Benneh and Dickson (1988); Boateng (2006). 30 E C O N O M I C S O F A D A P T AT I O N T O C L I M A T E C HAN G E Table 12  Land Area Distributions of the Ten Provinces of Ghana, divided into three zones Land Area in Coastal Zone (CZ)* No. Zones Provinces Land Area (km )2 Total (km2) Percentage (%) 1 North Upper West 18,757 — — 2 Upper East 8,647 — — 3 Northern 69,550 — — 4 South Western 24,754 2,003 8.1 5 Central 9,960 1,017 10.2 6 Greater Accra – Capital 3,256 1,630 50.1 7 Volta 20,567 2,926 14.2 8 Central Ashanti 24,786 — — 9 Brong-Ahafo 39,655 — — 10 Eastern 19,219 — — Total for Ghana: 239,151 7,576 3.2 *The coastal zone (CZ) is defined here as the land area within 30m of mean sea level. 21 million, 2008 estimate) living in coastal areas population and urbanization mainly due to the (World Bank 2010b), future climate change and high migration toward the coast. sea level rise could only exacerbate existing coastal risks, highlighting the need for coastal adaptation The coastal geology of Ghana includes the oldest measures and improved coastal management. Dahomean rock formations—mainly of meta- morphic rocks, which underlie the whole of the Ghana is located on the south-central coast of south-east coastal plains, consisting of the Accra West Africa (8oN and 2oW) (Figure 5). It is bor- plains and the southern part of the Volta dered by the Republic of Togo to the east, Cote Region—to Holocene unconsolidated rocks, d’Ivoire to the west, Burkina Faso to the north, which consist of clay, loose sand and gravel depos- and the Gulf of Guinea (Atlantic Ocean) to the ited by rivers at their mouths. The most extensive south. It covers an area of about 239,000 km2 deposits are found in the eastern coast, at the with extensive water bodies, including the Volta mouth of the Volta River and around the Keta and Bosomtwe lakes (Boateng 2006). The territo- lagoon (Ghana EPA 2001). Historically, the Volta rial waters extend 200 nautical miles (about River carried large amounts of sediments to the 370km) out to sea. About 7,576 km2 (or 3.2 per- sea, depositing the modern (Holecene) delta. The cent) of the land area is in the coastal zone Holocene rock formations cover the Eocene rocks. (defined in Ghana as the area within the 30-meter These layers consist of sediments of sand and contour of mean sea level) (Table 12). gravel (found at the eastern and western extremi- ties of the coast) and completely or partially cover The country comprises ten provinces (Table 12), the upper Cretaceous beds (which consists of four of which include coastal areas (Figure 5). sandstone, clay shale, and limestone). In general, The nation’s coastal zone is rapidly growing in there are not extensive Holocene deposits except G h a n a CO U N T RY ST U DY 31 at the Keta lagoon, and the coast is generally Collectively, these results quantify the potential erosional. costs of a range of plausible adaptation scenar- ios and hence provide some indicative costs for DIVA model description (See Annex 4). This subsequent interpretation. national assessment uses an improved form of the DIVA (dynamic interactive vulnerability The DIVA model is an integrated model of coastal assessment) model based on selected climate systems that assesses biophysical and socioeconomic (i.e., sea-level rise) and socioeconomic (i.e., pop- impacts of sea-level rise due to climate change and ulation and GDP) scenarios combined with two socioeconomic development (DINAS-COAST planned adaptation options. The DIVA model Consortium 2006; Vafeidis et al. 2008; Hinkel et al. includes flood and erosion simulation algo- 2009). DIVA is based on a model that divides the rithms, which estimate both the damage and world’s coast into 12,148 variable length coastal seg- associated costs of planned adaptation options. ments based on political, socioeconomic, and physi- Adaptaton options include dike construction cal characteristics. It associates up to 100 data values (and upgrade) and beach/shore nourishment. with each segment (DINAS-COAST Consortium Dike operation and maintenance costs, port 2006; Vafeidis et al. 2005, 2008).In the DIVA upgrades, and the potential for a retreat pol- model, the coast of Ghana is represented by 22 icy via land use planning are also considered. coastal segments. 32 E C O N O M I C S O F A D A P T AT I O N T O C L I M A T E C HAN G E DIVA is driven by climate and scenarios. The transported, as this is a significant determinant of main climate scenario in DIVA is sea level rise, such costs. while coastal population change and GDP growth represent the primary socioeconomic scenarios. Incorporation of social dimensions DIVA downscales the sea level rise scenarios by To complement the other sector and economic combining global sea level rise scenarios due to studies undertaken within the EACC study in global warming with an estimate of the local ver- Ghana, a “social component� was developed tical land movement. These local components that used a bottom-up perspective to vulnerabil- vary from segment to segment and are taken from ity assessment and identification of adaptation the global model of glacial-isostatic adjustment investment options (Annex 5). The social com- of Peltier (2000). For segments that occur at del- ponent views vulnerability as encompassing both tas, additional natural subsidence of 2mm/year is physical and socioeconomic elements. It adopts assumed. Human-induced subsidence associated IPCC definitions of vulnerability as comprising with ground fluid abstraction or drainage may be physical exposure, socioeconomic sensitivity, and much greater in deltas and susceptible cities than adaptive capacity components (including levels considered here (Nicholls 1995; Ericson et al. of skills, institutional “thickness,� and degree of 2006; Syvitski et al. 2009). market integration). The social and economic consequences of the The vulnerability assessment included literature physical impacts of sea level rise are also esti- review, identification of select “hotspots� (repre- mated using DIVA. The social consequences are senting both physically exposed and socioeco- expressed in terms of a selected indicator of the nomically vulnerable areas from across the cumulative number of people forced to migra- country), and fieldwork in these areas (including tion. This represents the total number of people focus group discussions and a small survey of 80 that are forced to migrate, either from the dry households). The identification of adaptation land permanently lost due to erosion, or they are options comprised a series of three participatory flooded more than once per year. On the other scenario development (PSD) workshops at local/ hand, the economic consequences are expressed regional and national levels to determine local in terms of residual damage costs (such as costs of stakeholders’ development visions for the area, land loss and floods) and adaptation costs (such as their assessment of livelihoods and other impacts costs of dike construction and upgrade, and of climate change in the area, and preferred beach/shore nourishment). adaptation options for investment. Adaptation costs are estimated for the two planned The districts selected for fieldwork were chosen adaptation options considered: (1) dike (sea or based on a literature review, and on knowledge of river) building and upgrade, and (2) beach/shore cases that would explain the differential vulnerabili- nourishment. Dike costs are taken from the global ties and adaptation options across the country. Sites vulnerability assessment carried out by Hoozem- were also selected with reference to ongoing NGO ans et al. (1993), which is the most recent global and donor initiatives in the area. They are not rep- assessment of such costs. The costs of nourishment resentative of entire ecological zones as these zones were derived by expert consultation, based primar- have micro-ecological, economic, cultural, and ily on the project experience of Delft Hydraulics political differences. The selected research sites cov- (now Deltares) in the area of beach nourishment. ered the Forest, Transition, Coastal Savannah, and Different cost classes are applied that depend on Northern Savannah regions. how far the sand for nourishment needs to be G h a n a CO U N T RY ST U DY 33 Study limitations breadth of coverage of the economy. Several Given that the general modeling approach used adaptation options were discussed with the in this study is similar to that adopted for the stakeholders. However, due to modeling limita- global track study, this study suffers from similar tions, only five sectors (agriculture, road trans- limitations. These relate to the characterization port, water and energy, coastal zone) were of the government decision-making environ- selected for study. The health sector was not cov- ment (i.e. the government has absolute knowl- ered. The assessment does not include climate edge about climate change and is willing to act), change impacts on ecosystem services. These limited range of climate (only four GCMs) and omissions imply that the reported adaptation growth outcomes, limited scope in time (projec- costs are highly likely to be underestimates of tions to 2050), and simplified characterization of the true costs. Nevertheless, they do provide a human behavior (utility and profit maximiza- benchmark which could be used for planning for tion). In addition, in this study, there is a limited climate change adaptation. Four G h a n a CO U N T RY ST U DY 35 Study Results Overview of the Ghanaian the growth rate of real GDP increased to a high Economy of 6.4 percent in 2006 before declining to 6.2 per- cent in 2008 (Figure 7). The growth performance in 2008 was impressive in view of the global Structure and performance financial crisis, whose effects were being felt as Ghana’s economy can be categorized into three early as the last quarter of 2007. The average broad sectors: agriculture, industry and services. In annual growth rate in the period 2002–08 was 5.5 the statistics reported below, the agricultural sector percent. A growth rate of 5.9 percent was pro- comprises crops and livestock, cocoa, forestry and jected in 2009. Figure 7 also shows the perform- logging, and fishing. The industry sector includes ance of the three main components of the real mining and quarrying, manufacturing, electricity sector for the period 2002–08. The agricultural and water, and construction. The services sector sector’s annual growth rate declined from a high includes transport and communications, wholesale of 7 percent in 2004 to a low of 3.1 percent in and retail trade, finance and insurance, real estate, 2007, before recovering to 4.9 percent in 2008. business services and government services. Figure 7 shows that in 2008 the agricultural sector The performance of the service and industrial accounted for about 32 percent of the real sector, sectors has been variable but nevertheless has while services and industry accounted for 42 per- been the driving force behind Ghana’s strong cent and 26 percent, respectively. Although the economic growth in the last three years. Growth share of agriculture has decreased slightly, while in the industry sector declined from 9.5 percent in that of services has increased over the last few 2006 to 6.6 percent in 2007, before rebounding to years, the basic structure of the economy has 8.3 percent in 2008. The sharp decline in the out- remained the same. Ghana’s economy continues to put of the sector could be attributed to the severe depend heavily on its natural resources. Timber, energy crisis in that year brought about by low cocoa, minerals, and fish still represent 48 percent water levels in the Akosombo Dam. The situation of GDP, 90 percent of foreign export earnings, was also compounded by high crude oil prices. and 70 percent of total employment. Growth in this sector has been driven mainly by strong performance in mining and construction, The economy has grown robustly in the last few while the manufacturing sector has actually been years. From a growth rate of 4.5 percent in 2002, declining in recent years. The construction 36 E C O N O M I C S O F A D A P T AT I O N T O C L I M A T E C HAN G E Table 13  Economic Development Indicators in Ghana, 2005–08 Indicator 2005 2006 2007 2008 GDP Growth (%) 5.9 6.4 5.7 7.3 Incidence of Poverty (%) n.a. 28.5 n.a. n.a. Incidence of Extreme Poverty (%) n.a. 14.3 n.a. n.a. Net Primary Enrollment (%) 59.1 69.1 81.1 83.4 Ratio of girls to boys in primary education 0.93 0.95 0.96 0.96 Infant Mortality (per 1,000) 73 73 73 50 Under-5 mortality (per 1,000) 115 114 115 80 Incidence of HIV (%) 2.9 3.2 2.6 2.6 Maternal mortality rate (per 100,000 live births) 560 n.a. n.a. n.a. Rural Population with access to safe water (%) 50.7 52.8 54.7 56.4 Transparency International ranking 65/169 70/169 69/180 67/180 Doing Business ranking 102/175 94/175 87/178 82/178 Source:  World Bank (2007). industry, in particular, grew strongly in 2006 and focused on measures designed to improve access 2007 due to large investments made for Ghana’s to basic needs and essential services such as basic 50th anniversary celebrations and the CAN 2008 education, safe drinking water, improved health, football tournament. and environmental sanitation. One of the short- comings of GPRS I was its overemphasis on mac- The services sector has witnessed variable but roeconomic stability as the main avenue for fairly high growth, averaging about 6 percent per promoting economic growth without addressing annum since 2002. Within this sector, the finance the issues of structural transformation and physi- and insurance, and real estate subsector is the cal infrastructural development. leading contributor to growth, followed in order of importance by wholesale trade, retail trade, Despite a good growth performance in recent hotels and restaurants, and other services. years, Ghana’s economy continues to depend heavily on its natural resources. Timber, cocoa, Growth policies minerals, and fish still represent 48 percent of Ghana’s medium-term economic development GDP, 90 percent of foreign export earnings, and strategy is outlined in the Ghana Poverty Reduc- 70 percent of total employment. Consequently, tion Strategy (GPRS). It began with GPRS I, the country’s economic base remains narrow which was implemented over the period 2003–05 and vulnerable to the vagaries of commodity following Ghana’s application to the Enhanced prices, agricultural supply shocks, and the chang- Highly Indebted Poor Country (HIPC) facility in ing climate. Most of the population––especially 2001. The key objectives of GPRS I were to the poor––rely on natural resources for their achieve macroeconomic stability and attain the livelihoods (Željko Bogeti´c et al.2007). Economic anti-poverty objectives of the UN’s Millennium growth has averaged over 5 percent since 2001 Development Goals (MDGs).  The strategy also and reached 6 percent in 2005–06. This strong G h a n a CO U N T RY ST U DY 37 growth nearly halved the poverty rate in Ghana– Figure 6  Ghana Sector Contribution –the proportion of the population below the to GDP, 2008 country’s poverty line––from approximately 52 percent at the beginning of the 1990s to 28.6 percent in 2005–06 (Table 13). The contribution of agriculture, industry, and services toward the $16.12 billion GDP are 32 32% percent, 26 percent, and 42 percent, respectively (Figure 6). Such progress in economic develop- 42% ment will be at risk due to climate change uncertainty. The National Economic Development Strategy 26% goal is to improve the quality of life of all Gha- naians by reducing poverty, raising living stan- dards through a sustained increase in national wealth, and promoting a more equitable distri- bution of the benefits (GPRS 2003–05). The Agriculture Industry Services current development path for agriculture is to ensure sustainable utilization of resources and commercialization of activities with market- Figure 7  Annual Real Growth Rate by Sector, 2002–09 12 10 8 GROWTH RATE (%) 6 4 2 0 2002 2003 2004 2005 2006 2007 2008 2009 REAL GDP AGRICULTURE INDUSTRY SERVICES Source:  MoFEP (2008) 38 E C O N O M I C S O F A D A P T AT I O N T O C L I M A T E C HAN G E Table 14.  Temperature (Co) in Regional CC Scenarios, 2010–50 Scenario Mean Max. Min. Range (Max. – Min.) Standard Deviation Coastal Base 34.0 35.7 32.1 3.6 1.1 Coastal Global Dry 35.1 37.0 32.6 4.4 1.2 Coastal Global Wet 34.9 37.0 32.4 4.6 1.3 Coastal Ghana Dry 35.1 37.3 32.6 4.7 1.3 Coastal Ghana Wet 34.7 36.8 32.4 4.4 1.2 Forest Base 33.4 35.1 31.2 3.9 1.3 Forest Global Dry 34.4 36.1 31.6 4.5 1.4 Forest Global Wet 34.2 36.2 31.6 4.6 1.3 Forest Ghana Dry 34.5 36.3 31.7 4.6 1.4 Forest Ghana Wet 34.0 35.8 31.5 4.3 1.3 South Savannah Base 36.5 38.2 34.7 3.5 1.0 South Savannah Global Dry 37.6 39.5 35.2 4.3 1.1 South Savannah Global Wet 37.7 39.7 35.2 4.6 1.1 South Savannah Ghana Dry 38.0 40.1 35.4 4.7 1.2 South Savannah Ghana Wet 37.3 39.4 35.0 4.4 1.1 North Savannah Base 39.4 41.6 37.3 4.3 1.2 North Savannah Global Dry 40.5 42.8 38.1 4.7 1.2 North Savannah Global Wet 40.5 43.3 37.9 5.4 1.3 North Savannah Ghana Dry 41.1 44.2 38.5 5.7 1.3 North Savannah Ghana Wet 40.0 42.9 37.7 5.3 1.3 driven growth. Commodity targeting for food sector in the Ghana Poverty Reduction Strat- security and income diversification of resource- egy (GPRS I). FASDEP II emphasizes the sus- poor farmers is given prominence by enhanc- tainable utilization of all resources and ing the productivity of the commodity value commercialization of activities in the sector chain through the application of science and with market-driven growth in mind. As the pol- technology, environmental sustainability, and icy itself is a statement of intent, this document greater engagement of the private sector and is the development of a sector plan for the other partners. From the national strategy envi- implementation of the broad strategies speci- sioned in the GPRS, the agricultural develop- fied in the FASDEP II. ment strategy (GoG 2007) is to ensure a modernized agriculture culminating in a struc- Vulnerability to climate change turally transformed economy and evident in Ghana is highly vulnerable to climate change and food security, employment opportunities, and variability by virtue of its location in the tropics. reduced poverty in line with the goal set for the About 35 percent of the land mass is desert, and G h a n a CO U N T RY ST U DY 39 Figure 8  Ghana Dry Scenario Temperature Changes Compared to Base, 2010–50 desertification is already currently proceeding at vulnerable to climate change because it is heavily an estimated 20,000 ha per year (EPA 2009). dependent on climate-sensitive sectors such as agriculture, forestry, and hydroelectric energy. Annual rainfall in Ghana is highly variable on The agricultural sector, in particular, in highly inter-annual and inter-decadal time scales. This vulnerable because it is rainfed and the level of means that long-term trends are difficult to iden- irrigation development is low. The country’s tify. Rainfall was particularly high in the 1960s, 565-kilometer coastline is inhabited by about a and decreased to particularly low levels in the late quarter of the population and is the location of 1970s and early 1980s, leading to an overall significant physical infrastructure. The next sec- decreasing trend in the period 1960 to 2006, with tion discusses the climate scenarios projected by an average of 2.3 mm per annum. As indicated the country track study, followed by a discussion earlier, the Ghanaian economy is particularly of the economywide and sectoral impacts. 40 E C O N O M I C S O F A D A P T AT I O N T O C L I M A T E C HAN G E Ahafo Region); Forest (Ashanti and Western Climate Change Projections regions); and Coastal (Eastern, Central and Northern regions). The Ghana climate change As indicated in Table 4, four selected GCM sce- scenarios were selected to represent the widest narios were compared to a base scenario of no possible spectrum of climate changes variables climate change. A Global Wet and a Global Dry (temperature, precipitation, and water flows). The scenario were used for Ghana. In addition, a climate moisture index (CMI) criterion was used Ghana Wet and a Ghana Dry scenario were to select the Ghana scenarios as indicated in selected out of 56 IPCC GCM models results to chapter 3. The CMI is calculated as the ratio of represent the wettest and driest scenarios appli- annual precipitation (P) to annual potential evapo- cable to Ghana. The results were aggregated to transpiration (PET). PET is defined as the amount four agroecological regions. These were: North- of evaporation that would occur if a sufficient ern Savannah (Upper East, Upper West, and water source were available. Predictions of cli- Northern regions); Southern Savannah (Brong mate change and the scenarios in Ghana indicate Figure 9  Temperature Variability Compared to Base % OF SCENARIOS TEMP. RANGE (C˚)/BASE TEMP. RANGE (C˚) 45% 45% 40% 40% 35% 35% 30% 30% 25% 25% 20% 20% 15% 15% 10% 10% 5% 5% 0% 0% Coastal Coastal Coastal Coastal Forest Forest Forest Forest Global Global Ghana Ghana Global Global Ghana Ghana Dry Wet Dry Wet Dry Wet Dry Wet % OF SCENARIOS TEMP. RANGE (C˚)/BASE TEMP. RANGE (C˚) 45% 45% 40% 40% 35% 35% 30% 30% 25% 25% 20% 20% 15% 15% 10% 10% 5% 5% 0% 0% South South South South North North North North Savannah Savannah Savannah Savannah Savannah Savannah Savannah Savannah Global Global Ghana Ghana Global Global Ghana Ghana Dry Wet Dry Wet Dry Wet Dry Wet Computed as percentage of scenario temperature range (maximum – minimum) to the region’s base range in 2010 to 2050 * G h a n a CO U N T RY ST U DY 41 Table 15  Precipitation Projections Figure 10  Surface Flow Average for Ghana’s 16 subbasins – Difference from the No-Climate— Descriptive Statistics Change Scenario, 2010–50 (million cubic meters per month) Standard Average Deviation Coefficient (mm) (mm) of Variation Base 1,224 -135 -11% Global Wet 1,283 -121 -9% Global Dry 1,118 -122 -11% Ghana Wet 1,213 -120 -10% Ghana Dry 1,283 -176 -14% wide variability both in temperature and precipi- tation across time and space. In general, the climate change forecasts indicate that the variability of year- to-year climate and their expected economic impacts is much larger in the climate change scenarios com- Ghana Dry Scenario (ipsl_cm4-B1) pared to the base scenario and this variability increases during the projection period of 2010 to 2050. The magnitudes of the increases and variabil- ity are particularly large for the Ghana Wet and Ghana Dry scenarios for temperature, while fore- casts of precipitation indicate large similarity between the Global Wet and Ghana Wet scenarios for three out of the four agroecological regions. Temperature There will be fairly wide fluctuations in annual temperatures in all Ghana regions for all the four scenarios. However, the trend over the period 2010–50 indicates warming in all regions, with temperatures increasing the most in the northern regions where the forecast indicates a tempera- ture increase up to 2.2–2.4°C. Figure 8 shows an example of the Ghana dry scenario temperature changes compared to base for 2010–50. Ghana Wet Scenario (ncar_pcm1A1b) The average temperature in Ghana during the period 2010 to 2050 is predicted to range between 34°C (Forest region, Ghana wet sce- nario) and 41°C (Northern Savannah, Ghana Dry scenario). However, the average measure of 42 E C O N O M I C S O F A D A P T AT I O N T O C L I M A T E C HAN G E temperature does not capture the variability of Precipitation temperature across time or space. Table 14 The precipitation forecast reveals a cyclical pat- shows predicted temperature variability statistics tern over the period 2010–50 for all regions, with across Ghana’s four agroecological zones for the high rainfall levels followed by a drought every period 2010 to 2050. The table clearly indicates decade or so. The wettest parts of the country are a common pattern of temperature changes for expected to be the forest and (Ashanti and West- all the four agroecological zones in Ghana. Both ern regions) and coastal agroecological zones the Ghana Wet and Dry scenarios show higher (Volta, Eastern, Central, and Greater Accra). The temperature variability relative to the base than Northern and Southern Savannah regions are the Global Wet and Global Dry scenarios. The expected to be relatively dry. Table 15 summa- range of temperature (maximum–minimum) rizes the descriptive statistics of precipitation for indicates that the Northern Savannah is expected Ghana’s in the base and the climate scenarios. to witness the widest range of temperature vari- All the agroecological zones show significant pre- ability (5.7°C range). Nevertheless, all regions cipitation variability. The Ghana Dry scenario show significant temperature variability of shows the highest possible variability compared to between 4.3°C and 5.7°C. Figure 9 shows a the other scenario across the subbasins. comparison of the temperature range (maxi- mum–minimum) in each region between the Runoff and stream flows base scenario temperature range and the climate Figure 10 provides a summary of projected change scenario range. changes in runoff by 2050, classified according to major subbasins for the Ghana Wet and Dry Figure 11  Annual Deviations of Real GDP from Base, 2010–50 (%) 4 2 0 -2 PERCENT -4 -6 -8 2010 2012 2014 2016 2018 2020 2022 2024 2026 2028 2030 2032 2034 2036 2038 2040 2042 2044 2046 2048 2050 GLOBAL DRY GLOBAL WET GHANA DRY GHANA WET Source:  Ghana EACC Study. G h a n a CO U N T RY ST U DY 43 Figure 12  GDP Growth Path in Levels 2010–50 50 40 BILLION US$ 30 20 10 2010 2020 2030 2040 2050 BASE GLOBAL DRY GLOBAL WET GHANA DRY GHANA WET Figure 13  Terminal Period Real GDP (average annual GDP, 2046–50) 49 48 47 BILLION US$ 46 45 44 43 42 BASE GLOBAL GLOBAL GHANA GHANA DRY WET DRY WET 44 E C O N O M I C S O F A D A P T AT I O N T O C L I M A T E C HAN G E scenarios. In general, there will be wide variations the evolution of the level of GDP for the four in stream flows and runoff changes. The areas GCM scenarios along with the baseline growth around Volta Lake and the southeastern zone will path. All the GCM scenarios suggest significant experience runoff changes ranging from an adverse economywide effects. Although there is increase of 51 percent (Wet scenario) to a reduc- considerable variation in annual real GDP growth tion of 16 percent (Dry scenario). The southwest- rates over the simulation period, the overall trend ern part of Ghana will experience increases in is clearly downward. This suggests that the runoff under both scenarios, while the Black adverse climate impacts on GDP growth become Volta basin will experience reductions in runoff stronger toward 2050. The decline in real GDP under both scenarios. The Oti basin will experi- growth is in line with the results of the crop simu- ence a small increase in runoff in the Wet sce- lation model runs (shown below), which predict nario and 29 percent reduction in the Dry more severe negative yield impacts toward the scenario. The fluctuations in stream flows and middle of the 21st Century. runoffs, particularly in the Volta River, increase the risk of floods and/or droughts in urban and Figure 13 shows the cumulative impact of the rural areas. Given that Ghana has very little con- simulated annual shocks over the period 2006 to trol over the upper streams of rivers across its bor- 2050 on the terminal value of aggregate real ders in Burkina Faso and Togo, there is a need for income at the end of the simulation period as subregional cooperation in the management of measured by the five-year average of annual GDP water resources. over the period 2046–50 at constant 2005 prices. Relative to a baseline real terminal GDP of $48 billion, climate change causes terminal real GDP Economic Impacts of Climate to decline to between $44.6 billion (-7.2 percent) Change—CGE Model Results and $47.2 billion (-1.9 percent).6 Real Household Consumption. Figure 14 compares The dynamic computable general equilibrium the terminal real household consumption levels in model used for the economywide impact assess- 2050 relative to the 2005 level for the four GCM ment distinguishes 11 crop types plus livestock, scenarios. In the baseline scenario of no climate forestry, and fishing sectors for each of Ghana’s change, total 2050 real household consumption four main agroecological zones (Coastal, Forest, is 4.8 times higher than in 2005. According to North Savannah, South Savannah) as well as 18 the UN medium population growth projections industrial and service activities. The appendix used in the simulation analysis, Ghana’s total provides a detailed outline of the structural fea- population in 2050 is 2.1 times higher than in tures and behavioral assumptions of the model. 2005. Thus, in the baseline real average per As explained in chapter 3, the model takes account capita consumption in 2050 is 2.7 times higher of climate shocks to crop yields and livestock pro- than in 2005. duction, including flood damage to crops and livestock capital, hydro-energy generation, and Figure 16 shows that real consumption growth is road infrastructure impacts. significantly affected by climate change in all four Economywide impacts 6 The use of five-year average over the terminal period 2046–50 Figure 11 shows the annual deviations of real instead of GDP in the terminal year 2050 is preferable for this GDP under climate change from the baseline comparison, since, as shown in Figure 14, comparisons across the scenarios for an individual year can be strongly influenced by over the period 2010–50, while Figure 12 shows strong idiosyncratic shocks in that particular year. G h a n a CO U N T RY ST U DY 45 Figure 14  Terminal Real Household Consumption Level (annual average, 2046–50) Relative to 2005 Level 5.50 5.00 BASE 4.50 GLOBAL DRY GLOBAL WET 4.00 GHANA DRY GHANA WET 3.50 3.00 TOTAL RURAL URBAN Note:  Initial (2005) real consumption level = 1 for each household group. Table 16  Standard Deviation of Annual Real Consumption Growth   Base Global Dry Global Wet Ghana Dry Ghana Wet All 1.56 1.64 2.18 1.70 1.67 Rural 1.89 1.88 3.19 1.98 1.94 Urban 1.42 1.58 1.68 1.61 1.53 Table 17  Welfare Impact without Adaptation Investments Climate Present Value of Welfare Loss Equivalent Annual Annual equivalent per Scenario Welfare Loss ($ billion) in % Value ($ million) capita (2010 $) Global Dry 13.118 3.13 764.5 31.46 Global Wet 10.095 2.41 588.3 24.21 Ghana Dry 2.709 0.65 157.9 6.50 Ghana Wet 4.050 0.97 236.0 9.71 Notes:  i.  Discount rate = 5%. Welfare is measured by real absorption, the constant-price value of domestic and imported final goods and services available for household consumption, government consumption, and capital stock investment. The simulation period is 2006–50. ii. Second column: constant annual flow with same PV; Third column: Second column / 2010 population (UN medium projection: 23.4 Million). 46 E C O N O M I C S O F A D A P T AT I O N T O C L I M A T E C HAN G E scenarios. When the changes in real household final goods and services available for household consumption are disaggregated according to a consumption, government consumption, and rural-urban classification, it can be seen that both capital stock investment at constant prices. In rural and urban households are adversely affected. the absence of adaptation investments, aggregate Compared to urban residents, rural residents are real welfare losses up to 2050 will range (in pres- more reliant on agriculture for their income, but ent value terms) from $2.7 billion (Ghana Dry) urban households’ real consumption also suffers to $13.1 billion (Global Dry); that is, the present from climate-change-induced rises in food prices. value of real absorption drops by 0.7 to 3.1 per- The simulation analysis suggests that urban and cent relative to the baseline growth path. In terms rural household consumption diverge over time of annualized values, these loss estimates range in all scenarios, including the baseline scenario. from $158 million to $765 million per annum. On a 2010 per capita basis, these figures range Table 16 indicates that the year-to-year variability from $6.50 to $31.46. in real consumption—as measured by the stan- dard deviation of annual consumption growth Figure 15 presents a decomposition of the climate rates over the simulation horizon—increases change impacts on the present value of real absorp- noticeably in a changing climate, particularly in tion reported above into welfare effects due to the Global Wet climate scenario. shocks to agricultural yields, shocks to road trans- port infrastructure, and shocks to hydropower gen- Aggregate Welfare. The first column of Table 17 eration. With the exception of the Ghana Dry shows the cumulative aggregate welfare changes scenario, the simulation analysis suggests that cli- over the simulation period as measured by the mate shocks to the road system are the dominant present value of the annual deviations of real source of aggregate welfare losses. Climate change absorption from the baseline up to 2050. Real impacts on crop and livestock yields, which include absorption is the value of domestic and imported flood damage events, lead to aggregate welfare Figure 15  Decomposition of Climate Change Impacts on Present Value of Real Absorption (deviation from base in billion $) 5.0 3.0 1.0 -1.0 -3.0 BILLION US$ HYDRO POWER -5.0 ROADS -7.0 AGRICULTURE -9.0 -11.0 -13.0 -15.0 GLOBAL DRY GLOBAL WET GHANA DRY GHANA WET G h a n a CO U N T RY ST U DY 47 losses under the Dry scenarios, but are associated The CGE model distinguishes 11 crop produc- with a small rise in the present value of aggregate activities as well as livestock, fishery, and for- tion 5.00 real absorption in the Wet scenarios. sectors in each of the four agricultural zones, estry0.00 plus 18 industrial and service sectors. The follow- Sectoral impacts ing discussion -5.00 focuses on summary results for total 2020s PERCENT This section turns to detailed CGE simulation crop and livestock agriculture along with 2030s more -10.00 2040s results for the economic impact of climate change detailed illustrative results for cocoa and utilities on selected key sectors of the Ghanaian economy. (water and energy). -15.00 -20.00 GLOBAL GLOBAL GHANA GHANA Figure 16  Average Annual DRY Real Figure 17b  WET Deviation GDP DRY WET from Agricultural Real GDP, Base for Cocoa, 2020–50 terminal period 2046–50 15.5 120.00 15 100.00 80.00 14.5 BILLION US$ 60.00 2020s PERCENT 14 40.00 2030s 13.5 20.00 2040s 13 0.00 12.5 -20.00 BASE GLOBAL GLOBAL GHANA GHANA -40.00 DRY WET DRY WET GLOBAL GLOBAL GHANA GHANA DRY WET DRY WET Figure 17a  Real GDP Deviation from Figure 17c  Real GDP Deviation from Base for Maize, 2020–50 Base for Cocoa, South Savannah 5.00 140.00 120.00 0.00 100.00 80.00 -5.00 2020s 60.00 PERCENT 2030s PERCENT 40.00 -10.00 2040s 20.00 2020s 0.00 -15.00 2030s -20.00 2040s -20.00 -40.00 GLOBAL GLOBAL GHANA GHANA -60.00 DRY WET DRY WET -80.00 GLOBAL GLOBAL GHANA GHANA DRY WET DRY WET 120.00 100.00 80.00 60.00 2020s PERCENT 40.00 2030s 20.00 2040s 0.00 -20.00 -40.00 GLOBAL GLOBAL GHANA GHANA 48 E C O N O M I C S O F A D A P T AT I O N T O C L I M A T E C HAN G E Agriculture: crops. Under the baseline scenario, Figures 17a and 17b report decadal real GDP (or average annual agricultural GDP by the terminal valued added) deviations from the baseline for the period 2046–50 is estimated to be about $15.3 maize and cocoa subsectors. For maize, value added billion. With climate change, the output of the is predicted to decline by between 1 percent (Ghana agricultural sector in this period is estimated to Wet) and 17.2 percent (Global Wet) relative to base grow less robustly to a level of between $13.7 by the 2040s. However, under the Ghana Wet sce- billion (Global Wet) and $14.8 billion (Ghana nario, slight increases in value added relative to base Wet), which is a reduction of 8.0 percent and may occur in the 2020s and 2030s. 3.0 percent, respectively. The estimated loss due to climate change for the agricultural sector will The decadal projections for cocoa sector real therefore be about $500 million to $1.6 billion GDP show considerable variation across the cli- per annum by 2046–50 (Figure 16). mate scenarios, regions, and decades (Figures 17b and 17c). Figure 18 reports the underlying annual Figure 18  Climate Change Impacts of Cocoa Productivity in Ghana (deviations from baseline yields) GLOBAL DRY 70.00 60.00 50.00 40.00 PERCENT 30.00 20.00 10.00 0.00 -10.00 -20.00 -30.00 2006 2008 2010 2012 2014 2016 2018 2020 2022 2024 2026 2028 2030 2032 2034 2036 2038 2040 2042 2044 2046 2048 2050 GLOBAL WET 120.00 100.00 80.00 60.00 PERCENT 40.00 20.00 0.00 -20.00 -40.00 2006 2008 2010 2012 2014 2016 2018 2020 2022 2024 2026 2028 2030 2032 2034 2036 2038 2040 2042 2044 2046 2048 2050 CENTRAL FOREST SOUTH SAVANNAH G h a n a CO U N T RY ST U DY 49 yield deviations from the baseline predicted by Moreover, the variance of annual cocoa yields rises the Cli-Crop cocoa model. Under the Ghana Wet across all climate change scenarios; increases in the climate, cocoa production is projected to experi- decadal averages mask strong adverse climate ence significant adverse effects, while under the shocks on cocoa yields in individual years. Global Dry and Global Wet climates the impacts turn out to be predominantly positive from a Cocoa is an important cash and export crop in nationwide perspective. However, positive impacts Ghana. Ghana cocoa production is the second on cocoa value added in the aggregate may coin- largest production in the world (about 20 percent cide with strong adverse impacts at the regional of the world market) after Côte d’Ivoire (about 40 level, as Figure 17c illustrates for the South Savan- percent of the world market). It is reasonable to nah region (which accounts for around 28 percent expect that large changes in Ghana’s cocoa of Ghana’s total cocoa production in the baseline) exports will affect the world market price. How- under Ghana Dry from the 2030s onward. ever, the magnitude of such world market price Figure 18  co n ti n ued GHANA WET 30.00 20.00 10.00 PERCENT 0.00 -10.00 -20.00 -30.00 2006 2008 2010 2012 2014 2016 2018 2020 2022 2024 2026 2028 2030 2032 2034 2036 2038 2040 2042 2044 2046 2048 2050 GHANA DRY 100.00 80.00 60.00 PERCENT 40.00 20.00 0.00 -20.00 -40.00 2006 2008 2010 2012 2014 2016 2018 2020 2022 2024 2026 2028 2030 2032 2034 2036 2038 2040 2042 2044 2046 2048 2050 CENTRAL FOREST SOUTH SAVANNAH 50 E C O N O M I C S O F A D A P T AT I O N T O C L I M A T E C HAN G E Figure 19  Decadal Average Ratios of Future Livestock Net Revenues to Net Revenues under Baseline Conditions, Ghana Dry (on left) and Wet (on right) Scenarios, 2001−50 RATIO OF FUTURE TO BASELINE NET REVENUES RATIO OF FUTURE TO BASELINE NET REVENUES 1.2 1.2 1 1 0.8 0.8 0.6 0.6 0.4 0.4 0.2 0.2 0 0 2000s 2010s 2020s 2030s 2040s 2000s 2010s 2020s 2030s 2040s DECADE DECADE AEZ 1 — Coastal AEZ 2 — Forest AEZ 3 — South Savannah AEZ 4 — North Savannah Figure 20  Decadal Average Ratios of Future Livestock Net Revenues to Net Revenues under Baseline Conditions, Global Dry (on left) and Wet (on right) Scenarios, 2001−50 RATIO OF FUTURE TO BASELINE NET REVENUES RATIO OF FUTURE TO BASELINE NET REVENUES 1.2 1.2 1 1 0.8 0.8 0.6 0.6 0.4 0.4 0.2 0.2 0 0 2000s 2010s 2020s 2030s 2040s 2000s 2010s 2020s 2030s 2040s DECADE DECADE AEZ 1 — Coastal AEZ 2 — Forest AEZ 3 — South Savannah AEZ 4 — North Savannah G h a n a CO U N T RY ST U DY 51 changes will depend on climate change impacts unitless time series of future livestock net rev- on cocoa production in the rest of the world, and enues for each of the climate scenarios, relative cannot be adequately captured in a single-coun- to the baseline. Figure 19 presents the vectors try model. This limitation of the analysis—which of ratios for the Ghana dry (on right) and wet may lead to an overstatement of both positive (on left) scenarios, and Figure 20 presents the and negative climate change impacts on real value results under the Global dry (on right) and wet added generated in the cocoa sector—needs to be (on left) scenarios. In all scenarios, the projected borne in mind – Figure 18. impacts on livestock incomes are pronounced by 2050 across Ghana, although the effect varies Agriculture: livestock. Based on the steps outlined widely across agroecological zones. Under the in the methodology section above (see Annex Ghana wet and Global dry scenarios, income 6 for additional details), the analysis developed falls to lows in each AEZ of roughly 80 percent Figure 21  Average Annual Water and Energy Sector Real GDP, 2046–50 2.35 2.3 BILLIONS US$ 2.25 2.2 2.15 2.1 BASE GLOBAL GLOBAL GHANA GHANA DRY WET DRY WET Table 18  DIVA Annual Results for High Sea Level Rise Scenario Damage without Adaptation Investments 2010 2020 2030 2040 Residual Damage:         Land loss due to erosion (km2/yr) 0.406 0.476 0.556 0.681 Land loss due to submergence (km2/yr) 8.232 4.658 1.949 3.094 Cumulative forced migration (thousands) 1.416 1.185 0.528 0.907 Value of Residual Damage         Land loss costs (million $/year) 0.04 0.059 0.088 0.131 Forced migration costs (million $/year) 3.036 3.073 2.029 4.594 Sea flood costs (million $/year) 0.287 0.565 1.011 1.754 River flood costs (million $/year) 0.024 0.05 0.105 0.206 Total Value of Residual Damage (million $/yr) 3.387 3.747 3.233 6.685 52 E C O N O M I C S O F A D A P T AT I O N T O C L I M A T E C HAN G E of baseline levels. Under the more pronounced estimated to be $3.7 million per annum by the temperature and precipitation effects of the 2020s and will rise to $6.7 million per annum by Ghana dry scenario, livestock incomes fall below the 2040s (Table 18). 70 percent of mean baseline levels in AEZ 4 (North Savannah Agroecological zone). Look- Under a low sea level rise scenario, the total cost ing across all AEZs and scenarios, the maximum of damage without adaptation—comprising land estimated effects compare well within the range loss, forced migration, sea flood, river flood—is of the findings of Seo and Mendelsohn (2006), estimated to be $4.6 million per annum by the which indicate a reduction in expected livestock 2020s and will rise to $4.7 million per annum by incomes of 31 percent of baseline given a 5°C the 2040s (Table 19). increase in temperature. Regional impacts Water and energy. Figure 21 reports CGE simulation Table 20 reports statistics on the distribution of results for the economic impact of climate change annual growth rates of agricultural GDP by on the water and energy sector by 2046 to 2050. region and of urban non-agricultural GDP over It indicates that annual average GDP of the water the whole simulation period. The distribution and energy sector will decline to within a range of gives an indication of the stress that year-to-year $2.19 billion (Ghana Wet) to $2.26 billion (Ghana variability in growth rates imposes, forcing people Dry) from a baseline output of $2.33 billion. This to adjust annually to changes in their represents a decline of between 3.0 percent and circumstances. 6.0 percent per annum on average. Table 20 shows that rural agricultural year-to- DIVA (Partial Equilibrium) results for coastal zone year income variability in Ghana is already high impacts. DIVA results are presented for two sce- in the baseline simulation, in which anthropo- narios—high sea level rise and low sea level rise. genic climate change is absent while observed his- Under a high sea level rise scenario, the total cost torical weather variability is taken into account. of damage without adaptation—comprising land Historical year-to-year variability is particularly loss, forced migration, sea flood, and river floo—is pronounced in the North Savannah, where Table 19  DIVA Annual Results for Low Sea Level Rise Scenario Damage without Adaptation Investments 2010 2020 2030 2040 Residual Damage:         Land loss due to erosion (km2/yr) 0.271 0.281 0.296 0.146 Land loss due to submergence (km2/yr) 0.003 8.338 3.945 2.59 Cumulative forced migration (thousands) 0.061 1.545 0.903 0.43 Value of Residual Damage         Land loss costs (million $/year) 0.027 0.035 0.047 0.061 Forced migration costs (million $/year) 0.121 4.069 3.251 3.17 Sea flood costs (million $/year) 0.258 0.485 0.85 1.354 River flood costs (million $/year) 0.021 0.041 0.076 0.133 Total Value of Residual Damage (million $/yr) 0.427 4.63 4.224 4.718 G h a n a CO U N T RY ST U DY 53 income can drop by more than 10 percent in bad With few exceptions, climate change leads to a years but can also rise by nearly 20 percent in noticeable increase in rural income variability as good years. The model takes into account that measured by the standard deviation and the adverse extreme weather events in the baseline coefficient of variation (standard deviation/ not only affect savings and investment, but also mean) of regional annual growth rates. The rise destroys existing agricultural capital, including in variability is most pronounced under the livestock. Therefore, the North Savannah is also Global Wet scenario. the region with the lowest mean baseline agricul- tural GDP growth. Table 20  Mean, Standard Deviation, and Extreme Values of Annual GDP Growth Rates by Region, 2006–50 Standard Coefficient of Scenario Region Mean Deviation Minimum Maximum Variation Base North Savannah 2.50 5.10 -10.19 19.03 2.04 South Savannah 3.37 3.67 -5.51 14.40 1.09 Forest 3.59 3.14 -3.13 11.37 0.87 Coastal 3.32 2.41 -4.27 9.75 0.73 Urban 3.97 0.65 2.88 6.09 0.16 Global Dry North Savannah 2.18 5.46 -10.33 19.15 2.51 South Savannah 3.16 3.49 -4.54 11.98 1.10 Forest 3.50 3.97 -6.85 10.84 1.13 Coastal 3.12 2.90 -4.24 9.47 0.93 Urban 3.82 0.70 2.75 5.97 0.18 Global Wet North Savannah 2.21 6.40 -12.01 21.42 2.90 South Savannah 3.16 5.83 -10.56 20.08 1.84 Forest 3.75 9.15 -15.32 42.35 2.44 Coastal 3.15 3.56 -5.63 11.72 1.13 Urban 3.82 0.87 2.58 7.02 0.23 Ghana Dry North Savannah 2.12 4.81 -7.17 14.22 2.27 South Savannah 3.02 3.74 -5.76 12.27 1.24 Forest 3.74 3.85 -3.28 13.52 1.03 Coastal 3.22 2.15 -2.41 10.33 0.67 Urban 3.95 0.71 2.67 6.26 0.18 Ghana Wet North Savannah 2.61 4.56 -12.26 15.21 1.75 South Savannah 3.20 4.01 -5.35 14.13 1.25 Forest 3.50 3.08 -5.44 10.67 0.88 Coastal 3.28 1.73 -0.64 8.05 0.53 Urban 3.91 0.70 2.65 6.00 0.18 54 E C O N O M I C S O F A D A P T AT I O N T O C L I M A T E C HAN G E In terms of the impact of global warming on mean absence of adaptation policy measures in order to agricultural income growth by region, climate be fully compensated for the economic impacts of change does not appear to reverse the baseline climate change. It makes no economic sense to invest growth performance ranking of regions; that is, more than this amount in adaptation measures the Forest region remains the fastest-growing and aimed at making Ghana as well off as it would be in North Savannah the slowest-growing rural region the absence of climate change. If the costs of adap- under all four GCM scenarios. The simulation tation policy measures aimed at restoring aggregate results do not suggest an unequivocal ranking of welfare to the baseline are higher than the welfare regions in terms of the severity of climate change loss from climate change, it would be cheaper to impacts. For instance, while the North Savannah is restore welfare through lump-sum compensation projected to experience the largest percentage- payments. Each of the adaptation scenarios is briefly point decline in mean growth under three GCM discussed below. scenarios, the results suggest an increase in growth for this region and a growth slowdown for all other Adaptation scenarios regions in the Ghana Dry scenario. Road design. In this scenario, adaptation of road infrastructure investment strategy is considered Economic Implications of in order to make the road network more climate- resilient at no additional cost compared to the Adaptation to Climate baseline. That is, the baseline road infrastructure Change—CGE Model Results budget is just reallocated through changes in road design standards, as explained chapter 3. This To analyze the economic implications of adaptation is more costly initially and reduces the amount for Ghana, the following adaptation scenarios were available for the expansion of the road network, simulated, including the baseline growth path. but at the same time there is less climate change These were (a) road design; (b) investment in agri- damage to the road network later on. culture; (c) investment in agriculture and hydro; and (d) investment in education (i.e., economic develop- Since these road infrastructure adaptation measures ment as an adaptation strategy). In all of these do not reduce the total budget available for other options, a fixed resource envelope for adaptation adaptation investments, it is assumed that such bud- investments was considered. get-neutral road design adaptations take place in all of the following three adaptation scenarios. In these simulations, it is assumed that the total amount available for adaptation measures over the Investment in agriculture. It is assumed in this sce- simulation period (2010–50) is equal to the present nario that the whole adaptation resource enve- value of the cumulated annual real absorption losses lope is spent for gradual expansion of irrigated due to climate change in the absence of adaptation land area from 2012 onward. The resulting yield measures reported in table 17. Absorption is used increases are calculated by determining the result- here as a measure of welfare and is defined as the ing increase of the share of irrigated land in total volume of goods produced by the economy plus cultivated area and information gathered from imports less exports, or equivalently as total domes- the Ghana EACC agriculture component, which tic final expenditure (private consumption plus gov- suggests that yields are twice as large on irrigated ernment consumption plus investment expenditure). land. The assumed upfront investment cost of From an economywide perspective, these figures irrigation is $18,000 per ha—taking account represent the lump-sum income transfers Ghana of Ghana-specific cost estimates for recent and would have to receive from external donors in the planned irrigation projects, as well as the need G h a n a CO U N T RY ST U DY 55 for complementary investment in water harvest- on additional investments in hydropower relative ing, etc.—as this strategy requires that Ghana’s to the baseline, which eliminates negative climate area of irrigable land expands beyond the total change impacts on power generation. The remain- area currently considered as irrigable. For exam- ing part of the resource envelope is spent on agri- ple, under the Global Dry scenario, the share of cultural productivity improvements. These returns irrigated land rises gradually from less than 0.4 include an increase in productivity of crops and to 23 percent of the current total cultivated area. livestock products. The present value of the addi- The resulting average annual factor productiv- tional power investment up to 2050 is estimated at ity increase for crop agriculture as a whole is an $859 million, which reduces the amount available additional 0.54 percentage points above baseline for agricultural investment. For example, under productivity growth. Ghana Dry, 32 percent of the resource envelope is allocated to power and the rest to agriculture. This scenario can also be interpreted as represent- The agriculture yield gains are correspondingly ing other productivity-raising agricultural adapta- reduced in relation to the previous scenario. tion measures with a comparable yield impact per dollar spent. Increases in agricultural productivity Investment in Education. This scenario assumes that due to investment in infrastructure, R&D, and the whole adaptation resource envelope is spent agricultural extension services are widely reported on additional investment in broad-based educa- in previous studies. For example, Alston et al. (2000) tion and training that raises labor productivity showed that typically the return to investment in across all skill groups. The rationale is that educa- agricultural R&D generates 40 to 60 percent tion spurs growth and thus reduces vulnerability returns annually to each dollar invested. to negative climate change shocks. Under Global Dry, for example, the additional annual education The climate change impact results reported earlier spending is on the order of $65 per capita of the in this chapter do not strongly suggest that particu- under-16 population in 2010. It is assumed that lar agricultural activities in any of the four regions this raises labor productivity growth by a conser- distinguished in the analysis become entirely unvi- vative 0.2 percentage points per annum relative able and should be abandoned altogether. There- to the baseline. fore, the stylized agricultural adaptation scenarios assume that the available adaptation investment Simulation results budget is broadly spread across regions and crops Table 21 and Figure 24 report deviations of the in proportion to initial baseline production pat- present value of real absorption from baseline for terns.7 This implies that the regional distribution the three key alternative adaptation strategies in of the agricultural adaptation funds is roughly combination with the budget-neutral road adap- equal to the baseline distribution of total agricul- tation strategy. In order to generate a meaningful tural production across regions (Forest 42 percent, comparison across alternative adaptation invest- South Savannah 26 percent, North Savannah 22 ment paths with different sectoral emphasis, the percent, Coastal 9 percent). total resource envelope for adaptation investments is the same across the different strategies (but dif- Investment in agriculture and hydro. Under this scenario, ferent across the four climate scenarios). The total part of the available resource envelope is spent resource envelope of adaptation investments is determined based on consultation with the gov- 7 A fine-tuned allocation of the adaptation funds into activities ernment of Ghana coupled with priority setting with the highest expected returns would be desirable in principle and an adaptation agenda (see Annex 6 for each but at present a solid knowledge base for such a fine-tuned alloca- tion does not exist. sector’s proposed adaptation strategies). 56 E C O N O M I C S O F A D A P T AT I O N T O C L I M A T E C HAN G E Table 21  Deviations of Welfare from Baseline under Alternative Adaptation Strategies (Present values in $ billions) Adaptation Investment in Scenario No Adaptation Road Design Agriculture Hydro /Agriculture Education Global Dry -13.118 -10.308 -0.121 -0.941 -2.090 Global Wet -10.095 -5.854 -2.973 2.116 0.584 Ghana Dry -2.709 -3.009 -1.193 -1.782 -1.308 Ghana Wet -4.050 -0.766 1.936 1.358 1.795 Note:   Key assumption: Resource envelope is externally financed and does not reduce Ghana’s baseline investment path. Table 22  Average Annual Real GDP Growth Rates (2010–50) under Alternative Adaptation Strategies (Percent)   Adaptation Investment in Scenario No Adaptation Agriculture Agric/Hydro Education Global Dry 3.58 3.61 3.73 3.72 Global Wet 3.56 3.62 3.7 3.69 Ghana Dry 3.70 3.70 3.72 3.71 Ghana Wet 3.68 3.72 3.75 3.74 Note:  Baseline growth rate: 3.74 percent Figure 22  Deviations of Welfare from Baseline under Alternative Adaptation Strategies (Present values in US$ Billions) 4.000 2.000 0.000 -2.000 BILLION US$ -4.000 -6.000 -8.000 -10.000 -12.000 -14.000 GLOBAL DRY GLOBAL WET GHANA DRY GHANA WET No Adaptation Agri Agri/Hydro Education G h a n a CO U N T RY ST U DY 57 Furthermore, the benefits and/or investment results reported here suggest that even under the impacts from adaptation in one sector to the other very moderate assumptions about returns to broad- sectors are indigenously determined by the com- based education investments used in the simulation putable general equilibrium (CGE) modeling pro- analysis, such measures can be quite effective in cess (see Annex 6). Changes in road design countering the macroeconomic growth impacts of standards alone provide significant reductions in climate change across all climate scenarios. welfare losses, with the notable exception of Ghana Dry. In this scenario, the reallocation of funds from Table 22 presents average annual real GDP road network expansion to road hardening slows growth rates from 2010 to 2050 for the three down road network growth without generating net alternative adaptation strategies compared to benefits, because climate shocks to the road system the case of no adaptation. In the absence of turn out to be very mild. This result suggests that in adaptation, climate change causes a decline in the case of Ghana road design, change is not an real output growth in all the GCM scenarios. unequivocal no-regret adaptation measure. For example, adaptation investment in agricul- ture provides gains in real GDP growth ranging The simulated adaptation investments in agricul- from 0.02 percentage points (Ghana Dry) to ture, in combination with road design, slightly 0.15 percentage points (Global Dry). overcompensate the climate change damages in a macroeconomic sense under Global Dry. This The message that emerges from these simulation means that in this case the total cost of returning results is that planned adaptation can be effective aggregate welfare to the baseline is actually lower in compensating the adverse impacts of climate than the assumed adaptation investment expendi- change. The adaptation strategies under consider- ture of $4.05 billion. In the other three scenarios, ation aim to restore aggregate absorption to the the agriculture-focused strategy restores aggre- baseline, rather than to restore each “sector� to the gate real absorption close to the baseline level, but baseline, as the latter approach is unlikely to lead to the negative signs in table 21 indicate some resid- an efficient allocation of a limited adaptation bud- ual damage. In these cases, it would appear advis- get. As a case in point, coastal and flood protection able to channel the investments selectively to is not included in the range of adaptation measures crops and regions with high expected returns and considered here because the separate DIVA model use the remaining part of the resource envelope results presented below seem to indicate that the for lump-sum compensation payments. costs of these measures would exceed the benefits considerably. To the extent that the adaptation The comparison of the combined hydropower/ interventions under consideration succeed in agriculture adaptation strategy with the pure returning the growth path of the economy close to agriculture adaptation strategy suggests that only the baseline growth path across the different cli- under the Ghana Wet climate is it preferable to mate change scenarios, they can be seen as reason- divert a fraction of the adaptation envelope from ably robust low-regret measures in the presence of agriculture to hydropower investments. considerable uncertainty about actual future cli- mate outcomes. However, it is important to draw Finally, the results for investment in education serve attention to the fact that the macro level at which to represent an adaptation strategy that does not the foregoing analysis was conducted masks the directly address climate change impacts in particu- residual damage that can occur at the micro or sec- lar sectors, but is aimed at spurring growth perfor- tor level. There will be a need for additional poli- mance in general in order to reduce vulnerability cies to address the problems arising from residual to negative climate change shocks. The illustrative damage at the micro level, including compensation 58 E C O N O M I C S O F A D A P T AT I O N T O C L I M A T E C HAN G E mechanisms that involve redistribution from “net include construction of small- to mid-size irrigation adaptation winners� to adversely affected popula- facilities and improvements in the land tenure sys- tion groups – Figure 22. The next section presents tem. There is also a need to improve entrepreneurial a more detailed discussion of adaptation options in skills to generate off-farm income (alternative liveli- response to climate change. hoods) and to improve access to loans and microcre- dit. Finally, the need to investigate gender-specific adaptation needs and to improve market infrastruc- Adaptation Options ture and linkages was highlighted. This section further discusses adaptation options Road transport in response to climate change. These options have Adaptation options for the road transport sector been discussed with various government agencies were identified in the areas of road maintenance and stakeholders. They are not to be interpreted and construction of new roads in response to the as optimal adaptation options in the sense that expected increases in both temperature and precipi- they are the least-cost ways of achieving given tation. On road maintenance, timely routine and objectives. The adaptation options were ranked period maintenance is deemed to be of high impor- as high, medium, and low according to their stra- tance. There is a need for a review of overall road tegic importance. design criteria, including materials and design stan- dards for construction of bridges, culverts, and Agriculture drains. For example, measures proposed for road Some adaptation actions are already being under- maintenance to deal with temperature increase taken in the agricultural sector as part of develop- included development of new, heat-resistant paving ment plans. However, additional investments are materials, as well as binding coarse material to sup- required in response to climate change. There is a press dust levels. To account for precipitation need for increased investment in agricultural R&D, increase, numerous measures were proposed, includ- backed by extension services, to adapt crop varieties ing designs for more frequent flooding, increased (including early-maturing) and livestock breeds. maintenance to repair potholes and cracks, protec- Given the expected variability in precipitation, the tion of road shoulders, and improved road drain- need for improvement in water storage capacity to age. Further details are provided in Annex 2. utilize excess water from wet years was highlighted. There is also a need for provision of rural roads to Water and energy enhance both national agricultural marketing and Water. Adaptation options were identified for sur- exports of cash crops. In the fisheries subsector, face water supply, water demand (domestic and there is a need for programs such as fish farming to industrial), groundwater resources, and flood pro- diversify livelihoods. These adaptation measures tection. For surface water supply, increased water were accorded a high priority. In the Savannah transfer from the Volta basin was identified as a region as a whole, construction of more dams for high priority in order to meet the needs of the irrigation projects was identified as necessary for growing urban population. Changing the loca- sustainable water management and subsurface tion or height of water intakes, installing canal water storage construction. Measures that were linings, and using closed conduits instead of open rated a medium priority include setting up monitor- channels in transporting water were assigned a ing systems, managing water resources more effi- medium priority. A number of soft options were ciently (especially in the Volta basin), and identifying identified for surface water supply, including pro- specific crop/livestock adaptation needs in the vari- motion of aforestation to enhance dry season ous agroecological zones. Other required measures flows in basins (high priority); increased rainfall G h a n a CO U N T RY ST U DY 59 harvesting at domestic level (medium priority); Energy. The need to reduce dependence on a and improved land use practices such as avoid- single source of energy and diversify the energy ance of uncontrolled deforestation, protection of mix was seen as crucial to improving the overall river courses, and de-sedimentation of reservoirs resilience and adaptability in the energy sector. In (high priority). view of the potential climate change impacts such as extreme weather events, the choice of location For domestic and industrial water demand, con- of new infrastructure and selective relocation of struction of efficient infrastructure capable of key infrastructure were assigned a high priority. maintaining the correct water pressures and water In terms of diversifying energy sources, develop- heads was rated a high priority. Minimization of ment of renewable sources—such as solar, wind, water losses through prompt repair of burst pipes biomass, waste conversion, as well as mini-hydro was seen to be a high priority. The following soft dams—were deemed to be necessary and were options were identified: education on economic accorded a high priority. Given a medium pri- use of water (low priority); promotion of water ority were upgrading engineering standards and storage during wet season for usage in dry season building norms, and retrofitting existing infra- (high priority); and charging economic rates for structure. Promoting policies and measures aimed water to sustain systems and deter water wastage at enhancing energy efficiency in all sectors in by consumers (medium priority). order to manage a reduction in emissions without impairing developments was rated a high priority. For groundwater resources, the main hard adap- On the other hand, promoting the development tion option identified was expansion of wells to of climate-friendly conversion and curbing the the rural areas and harvesting rainwater to help use of fossil fuels in energy generation processes recharge groundwater. This was assigned a high was rated as low. priority. Soft options seen as high priority were optimal use of water to reduce wastage; more effi- Coastal zone cient use of water; and recycling of wastewater to Adaptation options were identified to enhance reduce demand for freshwater. Other soft options resilience and robustness of natural and human identified as medium or low priority included systems in the coastal zone. A number of hard afforestation and alternative uses of wastewater. options were identified for both shoreline protec- tion and shoreline accommodation. The former The key hard options for flood protection are included increasing sea dikes; creating and removal of sediments to create more path for enhancing construction of river dikes to protect floodwater flows (high priority); redesign and con- ports and harbors; beach nourishment; increased struction of additional spillways to protect exist- maintenance; and coastal mangrove protection ing dams (medium priority); and design and and management. Shoreline accommodation construction of improved primary and secondary options included promoting flood-proof building drains (medium priority). Numerous soft options construction; preventing construction of immov- include enforcement of building regulations to able structures within the shoreline zone prone to ensure that buildings are not sited in water ways inundation; avoiding development in areas sub- or drainage courses; improvements in solid waste ject to liquefaction during earthquakes, and reset- management; and education on the relationship tlement of emerging peri-urban slum areas. between solid waste management practices and Numerous soft adaptation options were also iden- threats of flooding. These were all accorded a tified with an emphasis on enhancing capacity in high priority. Further details on these adaptation early warning systems and use of GIS and satel- options are provided Annex 3. lite imagery. New oil and gas development and 60 E C O N O M I C S O F A D A P T AT I O N T O C L I M A T E C HAN G E related infrastructure and regional development Agriculture accounts for approximately 40 per- in the Western Region would need to be designed cent of GDP and employs 55 percent of the labor with adaptation in mind force. Agricultural structure and the regional dis- tribution of agricultural GDP significantly differ across Ghana’s agroecological zones. The Forest Adaptation Costs Zone accounts for 43 percent of agricultural GDP, compared to about 10 percent in the This section presents partial-analytic estimates Coastal Zone, and 26.5 and 20.5 percent in the of the costs of undertaking adaptation. In line Southern and Northern Savannah Zones respec- with the modeling approach adopted, these are tively. Table 20 shows the corresponding shares in the costs of actions that the government needs to agricultural gross output value. The Northern take solely because of climate change and that Savannah zone is the main producer of cereals. are not part of the normal development budget. More than 70 percent of the country’s sorghum, Furthermore, these costs do not completely millet, cowpeas, groundnuts, beef, and soybeans return the economy exactly to the no-climate- come from the Northern Zone, while the Forest change position, so there will still be some resid- Zone supplies a large share of higher-value prod- ual damage. ucts, such as cocoa and livestock (mainly commer- cial poultry) (Breisinger et al. 2008). At the Agriculture regional level, the contribution to agricultural The adaptation objective in the agricultural sector growth from land expansion and yield increases is to restore climate-impacted crop production back between 1992 and 2005 varied across crops. to the baseline scenario at the aggregate level. This However, the general trend suggests that land approach to adaptation implies that there will still expansion contributed more than yield increases be residual damage in some subsectors/regions. (per hectare) to the growth of most crops, with the Table 23  Regional Shares in Agricultural Production by Commodity (%Shares in Gross Output Value 2005)   Coastal Forest S. Savannah N. Savannah Total Maize 0.21 0.34 0.26 0.18 1 Rice 0.15 0.4 0.05 0.4 1 Sorghum 0 0.01 0.14 0.86 1 yam roots 0.04 0.38 0.24 0.34 1 Cassava 0.04 0.27 0.44 0.25 1 Pulses 0 0.08 0.1 0.81 1 Oilseeds 0.08 0.35 0.09 0.48 1 Fruits 0.15 0.52 0.2 0.14 1 vegetables 0.13 0.33 0.36 0.18 1 Cocoa 0.03 0.67 0.28 0.02 1 Other crops 0.47 0.19 0.04 0.3 1 Livestock 0.21 0.47 0.24 0.08 1 Total 0.09 0.42 0.26 0.22 1 G h a n a CO U N T RY ST U DY 61 exception of cassava and yam in the Coastal The FASDEP II (GoG 2007) document provides Zone. In some cases, yield growth has been nega- strategies to deal with the consequences of climate tive over this period—such as for maize, sorghum, change in the agricultural sector. For instance, the and yam—in the Northern Savannah and policy strategy is to enhance the development of cocoyam, plantain and yam in the Forest Zone 22,590 ha of micro-irrigation schemes by 2015, and (Breisinger et al. 2008). 2,385 ha of small-scale irrigation schemes devel- oped by 2010 to benefit 50,000 households. FAS- Climate change impacts and national plans to DEP II emphasizes water management schemes deal with these changes are not explicitly stated in developed to benefit 10,000 households, identifying national and agricultural sector goals. For suitable areas for rainwater harvesting and agricul- instance, the national strategy of economic devel- tural water management schemes. The policy docu- opment takes the relatively short-term view of ment also mentions feasibility studies for large-scale taking into consideration the pillars of CAADP, irrigation projects in the Accra Plains. Feasibility which include sustainable land development and studies are completed for the Accra Plains that focus reliable water control systems and restoration of on harnessing the water resources of the Volta River degraded environment. It emphasizes main- for economic development and provide detailed cost streaming and supporting the scaling up of sus- estimates for the construction of an irrigation canal tainable land management (SLM) practices, as (GoG/MoFA/GIDA 2009). Other studies for the well as addressing interactions among agriculture, Afram Plains and Northern Savannah irrigation climate change, and biodiversity loss through areas were completed by 2010, and funds for imple- mainstreaming SLM practices in agriculture sec- mentation sourced by 2012. The policy document tor planning and implementation. emphasizes that small- and large-scale irrigation sys- tems and efficient water harvesting and Table 24  Commodity Composition of Agricultural Production by Region (% Shares in Gross Output Value 2005)   Coastal Forest S. Savannah N. Savannah Total Maize 0.15 0.05 0.06 0.05 0.06 Rice 0.04 0.03 0.01 0.05 0.03 Sorghum 0.00 0.00 0.02 0.15 0.04 Yam roots 0.07 0.15 0.15 0.24 0.16 Cassava 0.05 0.07 0.19 0.12 0.11 Pulses 0.00 0.00 0.00 0.04 0.01 Oilseeds 0.05 0.04 0.02 0.11 0.05 Fruits 0.14 0.11 0.07 0.05 0.09 Vegetables 0.17 0.10 0.17 0.10 0.12 Cocoa 0.06 0.34 0.23 0.02 0.22 Other crops 0.05 0.00 0.00 0.01 0.01 Livestock 0.21 0.10 0.08 0.03 0.09 Total 1.00 1.00 1.00 1.00 1.00 Source:   Ghana Social Accounting Matrix (SAM) 2005. 62 E C O N O M I C S O F A D A P T AT I O N T O C L I M A T E C HAN G E management systems are required to reduce reli- adaptation are therefore estimated to be $84 mil- ance on rainfed agriculture (GoG 2007). lion in 2012, rising to a high of $113.6 million in 2040 and falling to $39 million in 2050. The cumu- The government recently completed an agricul- lative total cost over this period is estimated to be tural SLM strategy and action plan that seeks to $2.7 billion, and the average is estimated to be prioritize a policy objective of FASDEP II devoted about $67 million per annum. to environment and natural resource management in line with stakeholders’ welfare (Gog/MoFA Coastal zone 2008). The composition of the various agricultural This section presents estimates for a coastal zone sector crops across the spatial dimension of the adaptation strategy based on DIVA model results. analysis (regional level) used for the study is sum- The DIVA low-sea-level scenario assumes that marized in Tables 23 and 24. compared to 1990, sea levels will gradually increase from 4 centimeters in 2010 to 15.6 centimeters by The primary adaptation strategy will be increas- 2050. The high-sea-level scenario assumes that sea ing or decreasing the cropland that is irrigated, level would increase from 7.1 centimeters in 2010 based on the available water and crop demand. to 37.8 centimeters by 2050 compared to 1990 lev- Two water management techniques will also be els. Coastal adaptation costs include sea dikes, river available for modeling in CliCrop: zai holes (or dikes, beach nourishment, and maintenance for planting holes) and organic mulching techniques. both sea and river dikes. These results indicate that the annual average costs in the 2020s decade will Road transport range between $47.44 million—assuming a low On the basis of business-as-usual, annual road sea level rise—up to about $116 million in the maintenance costs are estimated to be $64 million in high-sea-level-rise scenario. In the 2020s decade, 2010, rising to $248 million by 2050. With adapta- costs of adaptation increase from $55.17 million in tion, annual road transport costs are estimated to be the low-sea-level-rise scenario up to about $128 $68 million in 2010, rising to $246 million by 2050 million. In the 2030s, the DIVA model results indi- (Figure 24). In the absence of adaptation, the total cate that adaptation costs are expected to rise from estimated road maintenance costs by the end of the $59.27 to $141 million annually. In the last decade period will be $5.1 billion to $5.6 billion, while the of the analysis (2040s), Ghana’s adaptation costs equivalent costs with adaptation will range from are expected to vary from $63 million up to $155 $5.2 billion to $5.6 billion. Average annual road million. The medium range of Ghana’s coastal maintenance costs with adaptation are estimated to adaptation costs are between the high sea level rise be between $129 million (Global Wet) and $143 and the low sea level rise results (Table 25). The million (Ghana Wet) (Figure 24). It is also estimated annual full range of Ghana’s coastal adaptation that between $0.5 and $1.5 billion in new road costs is $47.44 million, assuming a low seal level investment will be required over the 40-year period. rise in the 2010s, to $154.86 million in the 2040s. These results generally show that the investment Energy costs of coastal zone adaptation are likely to exceed In the business-as-usual scenario, the projected the benefits in terms of avoided damage. total expenditure in the energy sector will be $31 million in 2012, rising to $89 million in 2040, Cost Summary. The CGE modeling indicates that before declining to $31 million by 2050 (Figure 25). losses from climate change impacts to agriculture With adaptation, the additional cost is estimated to could be as much as $122 million per annum, be $53 million in 2012, declining to $14 million by while losses from impacts on transport and 2050 (Figure 257). The total energy costs with hydropower could be up to $630 million and $70 G h a n a CO U N T RY ST U DY 63 Figure 23  Annual Road Maintenance Costs, 2010–50 1,400 1,200 1,000 GHANA WET W/ ADAPTATION MILLION US$ 800 GHANA DRY W/ ADAPTATION GLOBAL WET W/ ADAPTATION 600 GLOBAL DRY W/ ADAPTATION 400 BASE W/ ADAPTATION 200 0 2010 2015 2020 2025 2030 2035 2040 2045 2050 Figure 24  Annual Average Road Maintenance Costs, 2010–50 144 142 140 138 136 MILLION US$ 134 132 130 128 126 124 W/ Adaptation Annual Average 122 No Adaptation Annual Average GLOBAL GLOBAL GHANA GHANA DRY WET DRY WET Figure 25  Total Energy Adaptation Costs 140 Adaptation Costs BAU (Cost w/ no Adaptation INVESTMENT COST IN MILLION US$ AVERAGE GHANA 120 ANNUAL ADAPTATION COST IS $67 MILLION 100 80 60 40 20 0 2011 2016 2021 2026 2031 2035 2041 2045 64 E C O N O M I C S O F A D A P T AT I O N T O C L I M A T E C HAN G E Table 25  Summary of Ghana Coastal Seal Level Rise (SLR) Annual Adaptations Costs Medium SLR High SLR with with Low SLR with No SLR with Adaptation Adaptation Adaptation Adaptation ADAPTATION COSTS 2010s 116.05 86.08 47.44 18.06 Sea dike costs (millions $/year) 87.08 62.02 30.59 9.60 River dike costs (millions $/year) 0.87 0.64 0.38 0.17 Beach nourishment costs (millions $/year) 19.29 16.59 12.53 6.44 Maintenance of sea dike costs (millions $/year) 8.76 6.80 3.92 1.84 Maintenance of river dike costs (millions $/year) 0.05 0.04 0.03 0.02 ADAPTATION COSTS 2020s 127.73 94.26 55.17 18.47 Sea dike costs (millions $/year) 86.58 62.21 34.26 9.01 River dike costs (millions $/year) 0.91 0.65 0.37 0.16 Beach nourishment costs (millions $/year) 22.73 18.31 13.16 6.53 Maintenance of sea dike costs (millions $/year) 17.41 13.02 7.33 2.74 Maintenance of river dike costs (millions $/year) 0.09 0.07 0.05 0.03 ADAPTATION COSTS 2030s 140.70 103.26 59.27 19.65 Sea dike costs (millions $/year) 86.69 62.22 34.18 9.27 River dike costs (millions $/year) 0.97 0.68 0.38 0.16 Beach nourishment costs (millions $/year) 26.82 21.01 13.89 6.53 Maintenance of sea dike costs (millions $/year) 26.08 19.24 10.75 3.66 Maintenance of river dike costs (millions $/year) 0.14 0.11 0.07 0.03 ADAPTATION COSTS 2040s 154.86 111.75 62.79 20.07 Sea dike costs (millions $/year) 85.80 61.27 33.17 8.75 River dike costs (millions $/year) 1.00 0.69 0.38 0.15 Beach nourishment costs (millions $/year) 33.19 24.25 15.07 6.58 Maintenance of sea dike costs (millions $/year) 34.68 25.39 14.09 4.55 Maintenance of river dike costs (millions $/year) 0.19 0.14 0.09 0.04 million, respectively. Using our definition of adap- economic geography/regional development levels, tation, which is to restore welfare to the baseline socioeconomic status, and social differentiation rather than to restore each sector to the baseline, including migrant status and gender. the economywide cost of adaptation is estimated to range from $236–$764 million per annum. Physical geography. Physical location and hazard- proneness greatly affect household vulnerability, as in the drought-prone areas that are chronically Social Dimensions exposed to low rainfall. Just as asset depletion occurs in a chronic form at the household level, at the Key findings on sources of vulnerability area level too, repeated hazard events can reduce Vulnerability stems from a number of factors. a region’s resilience to climate change, particularly These include elements of physical geography, when combined with poor resource management. G h a n a CO U N T RY ST U DY 65 Economic geography and area asset base. Vulnerability both women and migrants’ adaptive capacity. can also arise from the existing livelihood systems Rural-rural migrants, for example, forgo income and policy regimes governing these systems. For by not planting long-gestation cash crops for lack example, single-sector fisheries livelihoods are nat- of secure title in receiving areas. Gender norms in ural-resource-dependent, and therefore vulnerable agricultural production also vary by region, with to climate change and to state policies on resource Northern region women able to cultivate com- management. Livelihoods across Ghana, from mercially on their own lands acquired from sub- forest-based resources, to fisheries, and agriculture, chiefs, in contrast to more strictly family-farmed depend on a clear and effective rule of law regard- units in the Savannah region. ing natural resource ownership and use rights, and more transparent use of resources. Further, Adaptation practices and coping strategies the export-oriented path followrf by the national Adaptation practices by households vary accord- government has led to preferential investment in ing to livelihood group, and asset holding level, social services and economic infrastructure (includ- and to some extent according to zone. In the ing roads). This means that the Northern Savan- Northern Savannah, households cultivated larger nah and Coastal rural locations in particular have farms through agricultural extensification as a lower resilience and adaptive capacity than the form of livelihood insurance. Dry-season garden- Forest and Transitional zones, which have received ing with small irrigation systems (hand-dug wells more state intervention to date. and river pumps) was increasing. Women were also taking on more agricultural tasks, rather than Socioeconomic status. Poverty status (including low remaining limited to sowing and harvesting as in physical, financial, and human capital asset lev- the past. New crop varieties were being used with els) lead to extreme vulnerability of households. shorter gestation periods and higher market value, Common factors here include low levels of edu- as well as hardy crops such as cassava (in the cation, landholdings, and other productive assets Transition zone). Fertilizer use had increased. such as boats and outboard motors for fishers. Key Off-farm activities—such as charcoal and fuel- vulnerable livelihood groups include smallholder wood harvesting, as well increased shea and farmers, rural migrant farm laborers, artisanal dawadawa harvesting and processing—had coastal and inland fishermen and fishmongers, increased. Outmigration was being undertaken, and urban slum dwellers. and diversification into livestock rearing also was present. Similar practices were undertaken in the Social differentiation, including gender and migrant status. Transition zone, plus adjusting of planting dates Physical hazards have differential effects on to the timing of rains. Forest zone adaptation diverse groups. Social vulnerability factors identi- practices included erosion control measures and fied in Ghana include gender, migrant status, age, use of community volunteer fire officers to man- and female-headed household status. Vulner- age bushfires. Fishing community members were able groups identified through community dis- fishing at night and in deeper lake and river areas, cussions included the expanding group of rural using foreign nets that could cast deep. They were landless, and the elderly and sick due to their also diversifying to other livelihood activities due limited adaptive capacity. Formal and informal to lowered catches. Coastal zone respondents institutions structure the extent of individual and were moving from low-value cereals to vegetables group access to resources. Specifically, the gen- (onions) with higher value. dered nature of the inheritance system, local gov- ernance and customary law, and multiple forms Focus group discussions revealed robust adapta- of land tenure systems disproportionately harm tion practices that could be augmented with state 66 E C O N O M I C S O F A D A P T AT I O N T O C L I M A T E C HAN G E support. These included (a) developing drought- interventions were a continuation of “hard� resistant short gestation crops; (b) developing strategies of infrastructure and technology, but small-scale irrigation systems; (c) improving with a focus on management capacities to ensure farmer knowledge and supporting integrated sustainable integrated resource management. farming approaches; (d) promoting woodlots and Adaptation strategies in the agriculture, water, mangrove regeneration with incentives; (e) and services sectors were identified as having research into appropriate, less-expensive building strong synergies with each other and with other technology; (f) enhancing mechanization of agri- sectors. Interventions were prioritized for various culture and encouraging productivity using agro- regions, according to the nature of threats and chemicals; (g) refining arrangements for access to impacts and vulnerability characteristics. land; (h) providing microcredit and skills for diver- sified livelihoods; (i) encouraging aquaculture, The PSD workshops revealed broad support for restocking rivers and lakes with fingerlings; (j) pro- National Adaptation Plans of Action (NAPA) and viding community social and economic infra- related climate strategy priorities in-country, in structure, including insurance; (k) providing early such areas as agriculture and water resources man- warning information; and (l) targeting the poorest agement, land management, roads, and early households with starter packs and access channels warning systems. However, they also revealed for livelihood diversification. stakeholder preferences for investments in gover- nance, social protection, training and education, Adaptation preferences arising and land tenure. Training and education was iden- from PSD workshops tified as a need not only for livelihood diversifica- The participatory scenario development (PSD) tion, but also in the area of increased capacity workshop process includes participants identifying building in community-based approaches to cli- their preferred long-term development vision for mate change adaptation and natural resource the area, as well as expected impacts of climate management. Key pro-poor adaptation invest- change on that vision, and needed adaptation ments identified by participants in local PSD work- investments needed in order to reach toward that shops included social security measures (safety vision. Key adaptation investment preferences nets); health services and awareness raising; urban identified by stakeholders in local and national social services and infrastructure; early warning PSD workshops included social protection mea- systems investments; improved tenure security; sures, health and education services, a flood early community-based land administration systems; warning system, land tenure reform, support to the and skills training. Local participants in the zonal fisheries sector, training for livelihoods diversifica- workshops were more concerned with the declin- tion, agricultural research and extension, and inte- ing living standards associated with degraded natu- grated soil and water management. ral resources and lack of public services, whereas national workshop participants looked for invest- PSD discussions focused on short- (2010–15), ments that would help local areas achieve national medium- (2015–30) and long-term (2030–50) goals, often through more expensive adaptation adaptation options. Short-term interventions investments that featured limited inputs by local tended to be less expensive, including advocacy, communities. Specific priorities at the local level relief, and support of existing strategies. Medium- included a focus on improved agricultural produc- term interventions featured infrastructure and tion and land management practices; managing institutional development needed to build area migration; improving conditions for women; and resilience, which was identified as the weakest improved governance and institutional structures. link in Ghanaian adaptive capacity. Long-term G h a n a CO U N T RY ST U DY 67 Summary of findings and ■■ Scaled-up investments in human capital (edu- recommendations cation and training), as well as organizational In sum, the study found that: development (user committees, disaster pre- ■■ Vulnerable groups include those disadvantaged paredness groups), can help reduce vulnerabil- by physical location, gender, asset or migration ity in the long and medium terms, as status, age, and source of livelihood (e.g., fishing complements to hard infrastructure invest- community or food crop farmers). ments such as irrigation and roads. ■■ Local adaptation preferences are socially dif- ■■ Facilitating two-way information flows between ferentiated. Further, they are conditioned by government and its citizens in the areas of cli- factors such as actor cognition, access to infor- mate data, early warning systems, and avail- mation, and channels for social learning. able resources can help improve production and marketing, and reduce climate-induced ■■ Climate impacts and responses are highly site- human and livestock mortality and morbidity. specific, and adaptation investments need to be similarly customized, taking into account ■■ Use socio-spatial approaches in designing and economic and social trajectories. targeting adaptation programs. ■■ Both hard and soft adaptation measures are ■■ Devote attention to governance and decentral- needed for a comprehensive response. ized planning processes to ensure users are involved in needs assessment, investment ■■ Adaptation preferences can be distinguished choices, and assessment of service delivery. by local and national levels. In Ghana, local priorities emphasized improved livelihood out- A number of measures are required to improve the comes and inputs to improved household and resilience and adaptive capacity of vulnerable area resilience (education, training, and infra- groups and regions. These include improving structure and services investments). access to services—such as health care and insur- ance, safe drinking water, affordable energy, and ■■ Past adaptation experience (both indigenous improved access to credit. Accelerated develop- knowledge and introduced best practice) can ment of rural areas is proposed as one way to stem offer insights, though negative coping strategies rural-urban migration. To address the needs of must be distinguished from transformative adap- migrants already in urban areas, there is a need to tation whether at the household or area level. support social safety nets. There is also a need for significant improvements in governance, including These findings lead to the following recommen- decentralization, and increased community par- dations. ticipation in decision making. Sustainable resource ■■ Employ a focus on assets and capabilities in management and improved land tenure systems adaptation strategy and planning. are also important in efforts to increase the adap- tive capacity of communities. As a result of the ■■ Ensure social protection measures are avail- increased warming, some farmers and fishermen able for vulnerable populations to smooth con- will have to seek alternative livelihoods. There is sumption, reduce risk, and aid in livelihoods therefore a need for practical training to build their diversification. capacity and enhance their job skills. F IV E G h a n a CO U N T RY ST U DY 69 Summary and Policy Implications Climate Change Impacts experiencing significant reduction in runoff while the southwestern part will experience Climate change is projected to have significant increases. These fluctuations will increase the impacts on Ghana. Although there will be fluc- risk of floods and/or droughts in both rural and tuations in both annual temperatures and precipi- urban areas. Because most of these changes are tation, the trend for temperature over the period caused by upstream areas outside the govern- 2010–50 indicates warming in all regions. The ment’s control, there is need for dialogue with highest temperature increases will be in the Ghana’s neighbors on the management of Northern, Upper East, and Upper West regions, shared water resources. while the lowest will be in the Brong Ahafo region. For example, under one of the climate scenarios Because Ghana’s economy is predominantly (Ghana Dry), temperatures in the three northern based on agriculture, it will suffer severe eco- regions will rise by 2.1–2.4°C by 2050. In com- nomic consequences from climate change. parison, the predicted rise in the Ashanti, West- Although there will be considerable variation in ern, Eastern, Central, and Volta regions will be real gross domestic product (GDP) growth, the 1.7–2.0°C., and the rise in the Brong Ahafo overall trend over 2006–50 clearly indicates a region will be 1.3–1.6°C. downward trajectory. Toward 2050, annual real GDP is projected to be 1.9 to 7.2 percent lower The forecast for precipitation indicates a cyclical than in the absence of climate change. Real pattern over the period 2010–50 for all regions, household consumption also declines relative to with high rainfall levels followed by a drought the baseline in all the four climate change sce- every decade or so. The wettest parts of the coun- narios analyzed in this study. try are expected to be the Forest (Ashanti and Western regions) and Coastal agroecological zone Adverse agricultural productivity impacts become (Volta, Eastern, Central, and Greater Accra). The more pronounced over time. Relative to the base- Northern and Southern Savannah regions are line, agricultural GDP will decline by 3 to 8 per- expected to be relatively dry. cent per annum by 2050. The projections for cocoa pose serious socioeconomic implications in There will also be wide fluctuations in runoff view of cocoa’s significant contribution to national and stream flows, with areas in the Volta basin income and farmers’ livelihoods. 70 E C O N O M I C S O F A D A P T AT I O N T O C L I M A T E C HAN G E The annual average GDP of the water and energy per annum, while losses in transport and hydro- sector will decline to within a range of $2.19 billion power could be up to $630 million and $70 mil- (Ghana Wet) to $2.26 billion (Ghana Dry) from a lion, respectively. Total economywide impacts are baseline output of $2.33 billion. This represents a estimated to range from $158 to $765 million per decline of between 3.0 percent and 6.0 percent per annum. Using the above definition of adaptation, annum on average. Damage to the coastal zone in the which is to restore aggregate welfare to the base- form of flooding, land loss, and forced migration is line rather than to restore each sector to the base- estimated to be $4.8 million per annum by the 2020s, line, the economywide cost of adaptation is thus rising to $5.7 million per annum by the 2030s. estimated to range from $158 to $765 million per annum. Incomplete partial equilibrium modeling The predicted climatic changes will have adverse puts economywide adaptation costs in a mid- effects on human well-being and activities, food range of $300 to $400 million per annum. insecurity, and reduced water availability. In response to these climate changes, people will New climate change impacts and adaptation esti- migrate in search of better land and environment. mates are provided based on both the partial and The migration and relocation of population will computable general equilibrium modeling. In slow economic growth and development. Migra- terms of the impacts, the partial equilibrium mod- tion will occur not only within the country, but eling estimates impacts in agriculture to be more also from countries to the north of Ghana that than $34 million per annum. For coastal prelimi- will also become hotter and drier. nary results, the impacts range from $25 to $144 million per annum, while they range from $129 to In order to address the impacts predicted to occur, $142 million per annum for the roads sector. Esti- a number of adaptation options were identified in mated impacts for hydropower range from $31– consultation with the stakeholders in the areas of $89 million per annum. The estimated mid-range agriculture, road transport, water and energy, and impacts economywide are about $300–$400 mil- the coastal zone. Measures to address the social lion per annum. Partial/sector equilibrium uses a impacts of climate change were also identified. simplistic approach that does not reveal interaction between sectors, nor include indirect impacts. Adaptation to Climate General equilibrium results show that in the absence Change Costs of adaptation, losses in real absorption will range (in present value terms) from $158 million (Ghana Dry) to $765 million (Global Dry) per annum. On a per Adaptation in this study is aimed at restoring aggre- capita basis, they amount to $6.5 to $31.46 for gate national output to the baseline, rather than Ghana Dry and Ghana Wet, respectively. Specific restoring each sector to the baseline. This suggests Ghana scenarios showed a narrow range of losses in that even with adaptation, there will still be some real absorption relative to the global-like scenarios. residual damage at the sector level. Given the scarcity of resources at the government’s disposal, this implies that tough choices must be made on the design and Looking Forward sectoral balance of the national development strategy in light of the challenges posed by climate change. In view of the expected variability in temperature and precipitation, strategic planning in Ghana The general equilibrium modeling indicates that should take regional climate change variability losses in agriculture could be as much as $122 million into consideration. G h a n a CO U N T RY ST U DY 71 At the national level, the National Development Planning Commission’s draft Medium-Term National Development Policy Framework for 2010 to 2013 (Gog/NDPC 2009) lays out the priorities of the government installed since February 2009. This framework was used to establish the base- line scenario of development, upon which this study is based. As the government moves to implementation of this new plan, recommenda- tions from adaptation options presented in this study should be considered. For each region, the possible sets of climate change impacts need to be addressed through the local development plans. Specific needs are discussed below. Agriculture Water and energy There is a need for increased investment in agri- Recommended hard options for the water subsec- cultural R&D, backed by extension services, to tor include increased water transfer from the produce adapted crop varieties (including early- Volta basin to meet the needs of the growing maturing) and livestock breeds. There is also a urban population, construction of efficient infra- need for improvement in water storage capacity structure, and construction of water storage facil- to utilize excess water in wet years. There is a ities and blocking of dry stream channels to need to improve agricultural extension services harvest rainwater to recharge the groundwater and marketing networks. Other necessary mea- system and also serve as an alternative water sup- sures include construction of small- to mid-size ply. A number of soft options were also deemed to irrigation facilities. There is also a need to improve be of high priority. These include afforestation, entrepreneurial skills to generate off-farm income improved land use practices, protection of river (alternative livelihoods) and to improve access to courses, and de-sedimentation of reservoirs. loans and microcredit. A high priority is diversification of the energy mix Specifically on cocoa, the most important cash and development of renewable sources such as crop for Ghana, adaptation measures include solar, wind, biomass, waste conversion, and mini- programs to promote the diversification of liveli- hydro dams. Soft options include promoting poli- hoods, including alternative cash crops and non- cies and measures aimed at enhancing energy farm-income generating activities. efficiency in all sectors. Road transport Coastal zone Recommended actions include proper timing of The modeling results generally show that the invest- road construction (for example, before the rainy ment costs of coastal zone adaptation are likely to season). There is a need to ensure routine and be uneconomic because the costs are likely to far timely maintenance, as well as review overall road exceed any benefits. Therefore, defending the entire design criteria, including materials and drainage, coastline by building dikes and sea defense walls is road sizes, and protection of road shoulders. not a sensible strategy. A better strategy would be to 72 E C O N O M I C S O F A D A P T AT I O N T O C L I M A T E C HAN G E protect key investments and natural resources— Multisectoral interventions that aim to improve ports, harbors, beaches, and coastal mangroves— area resilience through reducing the development and to zone significant new facilities distanced—from gap are particularly effective forms of investment, vulnerable areas to the greatest extent possible. including programming in education, social pro- Emphasis must be placed on soft options such as tection and health, roads, market services, natural enhancing capacity in early warning systems and resource management, and skills training. the use of GIS and satellite imagery. New oil and gas development and related infrastructure and Enabling policies require attention alongside spe- regional development in the Western Region would cific sectoral interventions (for example, land pol- need to be designed with adaptation in mind. icy, decentralization, natural resource management, technology). Climate change adaptation portfolios Social dimensions within countries cannot only be stand-alone invest- Complementary investments in both hard and soft ments in infrastructure and services, but also adaptation options are needed to ensure effective require attention to support for enabling environ- use of infrastructure and to meet the needs of the ment policies and mainstreaming of climate con- poorest. Adaptation investments in hard infrastruc- cerns in specific sectoral frameworks. ture without complementary investments in policy, service, and extension support will not operate in Regional integration an optimally efficient manner. It is important for Ghana to improve dialogue with her neighbors in order to effectively deal It is important to foster a shift from support for with the challenges of climate change. Areas coping strategies for climate shocks at the house- where negotiations and consultations would be hold level to transformative adaptation strategies required are in the management of shared water that can increase resilience at the household and resources and possible regional migration. area level. The poorest are particularly vulnerable to climate shocks, as they do not have stored assets Long-term planning upon which they can rely during times of stress. A Given the development challenges and threats posed pro-poor approach to climate change adaptation by climate change and variability, Ghana needs a would look not only at reducing shocks to house- long-term national plan that takes these factors into holds, but also engage in transformative adaptation account. Currently, Ghana only has a medium-term strategies that increase resilience and overcome development plan. The long-term plan also needs to past biases in subnational investment. be integrated into regional, districts level develop- ment plans to provide a coherent and integrated Geographically targeted, multisectoral interven- approach to development planning. tions are needed to reduce the “development defi- cit� of vulnerable regions. Poverty and sensitivity to climate-related hazards are increasingly con- Summary Matrix centrated in particular regions within countries. In many cases, poor communities (such as recent The draft technical report—entitled Ghana Medium urban in-migrants) are relegated to the most mar- Term National Development Policy Framework (MTDF): ginal areas of the city. Adaptation policies at the Shared Growth and Development Agenda—was released national level must take into account the diverse in July 2010. This document aims to inform the socioecological settings within the country, and development agenda for the period of 2010–13 devise area-specific interventions that can support and was available in matrix format in 2009 as well the livelihoods of these vulnerable populations. as in a reduced volume edition. G h a n a CO U N T RY ST U DY 73 The 2010 MTDF indicated the importance of the report. To implement a successful climate climate change and their impacts on several areas. change adaptation strategy, Ghana should seek to The MTDF is rightfully seeking to mainstream work more efficiently in the multisector coordina- adaptation to climate change within the sector’s tion of the climate change agenda. planning goals and specific objectives. In the MTDF, climate change is mentioned in sectors In times of world economic crisis and budget related to disaster risk management, awareness deficits in Ghana, the country will not be able to raising, reducing vulnerability of the poor, the implement climate change adaptation strategies urban sector, energy, and in general about build- without additional funds to implement the so- ing capacity needs in response to climate change called “no-regret� options for adaptation. This is extreme events. about choosing rights-of-way for new roads to also serve the secondary purpose of water reten- In the backdrop of the findings of this EACC case tion, or enhancing technical specifications of study, Ghana will need to gradually incorporate drainage systems in cities, and in general doing EACC findings into the national planning process. simple maintenance of drainage and culverts so This can be challenging under budget constraints, that the infrastructure is saved and serves the and it takes political courage, but it is doable. purpose for which it was built. Similarly on no- regret actions, some key economic port infra- The World Development Report 2010 (World Bank structure and new O&G infrastructure should 2010b) was on climate change. The report lists be built with climate change adaptation in mind. many approaches to climate change mitigation Starting now, such considerations should be sys- and adaptation. The main message of the report tematically and gradually incorporated through- is that a “climate-smart� world is possible if we out the MTDF plans. act now, act together, and act differently. The report turns to specifying the need for a funda- The following table provides an overview of the mental shift at the government level, at the level key recommendations emerging from the under- of institutions, and at the level of individuals. In taking of the Ghana EACC, as well as from the response, a multiyear Ghana MTDF should have process of consultation that occurred over an climate change as a stronger theme throughout 18-month period up to mid-2010. 74 E C O N O M I C S O F A D A P T AT I O N T O C L I M A T E C HAN G E Table 26  Summary Recommendation on Low-regret Options and Policy Interventions Following the Ghana EACC Analysis Short Term (three years) Theme Low Regret Investments Low Regret Policy Agriculture Construction of small- to mid-size Promote the diversification of livelihoods in cocoa irrigation facilities producing areas, including alternative cash crops and non-farm income generating activities Promote research into and production of adapted crop varieties (including early- maturing) and livestock breeds. Improve access to loans and microcredit for vulnerable groups Build entrepreneurial skills to generate off-farm income Crop failure and livestock diseases response programs Energy and Construction of dug-out and blocking of Diversification of the energy mix and development Water dry stream channels to harvest rainwater to of renewable sources such as solar, wind, biomass, recharge the groundwater system and also waste conversion, and mini-hydro dams serve as alternative water supply Promoting policies and measures aimed at Water resources management, and monitoring enhancing energy efficiency in all sectors of water resource balance, for hydrology and irrigation scheduling and return flow enhancement Afforestation, improved land use practices, protection of river courses, and de-sedimentation of reservoirs Transport Review of overall road design criteria, Proper timing of road construction ensure routine including materials and drainage, road sizes, and timely maintenance protection of road shoulders Coastal Zone Protect key investments and natural Identify coastal vulnerable areas resources (e.g., ports, harbors, beaches, and coastal mangroves and lagoons) New oil and gas development and related infrastructure would need to be designed with adaptation in mind Social Coping strategies for climate shocks at household Dimensions level to transformative adaptation strategies that can increase resilience at household and area level Reduce the “development deficit� of vulnerable regions Institutions Include regional integration aspects into climate for CC change adaptation strategy Strengthen the capacity of NADMO to respond to erratic and extreme weather events (flooding, droughts) disaggregate national level planning to local development plans G h a n a CO U N T RY ST U DY 75 Long Term (beyond three years) Priority Investments Priority Policy Possible Instruments Improve water storage to use excess Support research and development Irrigation Development Fund, water from wet years (R&D), deployment, and extension and private sector investments in services, including livestock irrigation development initiatives Increased water transfer from the Support system to define water Energy and Water Coordination Fund Volta basin to meet the needs of rights growing urban population Encourage multipurpose hydro, Develop efficient irrigation drainage irrigation, and flood protection systems to increase returns flows development programs Increase maintenance and expansion Policy for roads drainage systems Roads and Bridges Maintenance and of feeder roads to increase rural and create plans for roads and Enhancement fund and cash crop producers’ access to bridges rerouting for emergency goods and services response Protect the livelihood and economic Protect identified more vulnerable Coastal Protection Fund activities of the fisheries community cities and villages along the coastlines . 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