Abstract
Long-run economic development in Ghana is potentially vulnerable to anthropogenic climate change given the country’s dependence on rain-fed agriculture, hydropower and unpaved rural roads. We use a computable general equilibrium model, informed by detailed sector studies, to estimate the economy-wide impacts of climate change under four climate projections. Climate change is found to always reduce national welfare, with poor and urban households and the northern Savannah zone being the worst affected. However, there is wide variation across scenarios in the size of climate impacts and in the relative importance of sectoral impact channels, thus underscoring the need for multi-sector approaches that account for climate uncertainty. Our analysis of adaptation options indicates that investing in agricultural research and extension, and improved road surfaces, are potentially cost-effective means of mitigating most of the damages from climate change in Ghana.
Highlights
Ghana is vulnerable to climate change in at least three areas that are crucial for the country’s long-term economic development
During 2006–2013, agricultural gross domestic product (GDP) grew at a slower pace than industry and services, causing the share of agriculture in total GDP to decline [17]. This declining share of agriculture is consistent with the experiences of other countries during their development processes and so is likely to continue in Ghana into the future
Analyzing the economic impacts of climate change is complicated by its multiple impact channels and high degree of uncertainty
Summary
Ghana is vulnerable to climate change in at least three areas that are crucial for the country’s long-term economic development. A majority of these studies focus on agriculture and measure impacts using either historical econometric analysis or process-based crop models. Our multi-sector framework draws on the findings from sector studies covering four major impact channels: agriculture, energy, infrastructure, and coastal inundation from sea level rise. As mentioned above, these four channels are expected to be among the most important for Ghana, given the country’s dependence on agriculture, hydropower and an unpaved road network. The section describes the climate change projections for Ghana and summarizes the main findings from the sector studies used in the economic analysis.
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