1st Roundtable on Carbon Policy and Governance

Ghana’s National Technical REDD Committee and the Climate Change Unit of Ghana Forestry Commission convened the 1st Roundtable on Carbon Policy and Governance in Accra on November 27 & 28, 2008. The roundtable focused on “Operationalizing Carbon Finance for Sustainable Tree Crops in Ghana.” The series is funded by Cadbury plc and facilitated by Forest Trends and Nature Conservation Research Centre.

Ghana has one of the highest deforestation rates in the world, – about 2% per annum. It has lost about 85% of its forest cover over the last 100 years. Carbon finance has the potential to alter the economics of deforestation by giving value to standing forests, and providing an economic incentive for planted trees by responding directly to market failure and providing a market-based incentive for better policies and governance.

The global market for carbon credits provides a new and significant economic opportunity for Ghana, one that requires, in the case of forest-based carbon credits, new or modified land, forest and climate policy, regulatory frameworks, and fiscal policy. Ghana has taken significant steps to prepare for entering carbon markets, but it is still early days and the fundamental structures for regulating production, trade and export of carbon credits are not in place.

The major bottleneck to making rapid progress on the carbon finance agenda is the lack of understanding and capacity, especially at policy levels – therefore there is no clear carbon finance strategy in Ghana. These factors also make it difficult for Ghana to present a coherent national position at the UNFCCC discussions, which will reach a climax at the Copenhagen meeting in December 2009 when the post-Kyoto regime, including a REDD mechanism, will be negotiated. There is therefore great urgency to move forward on the carbon finance agenda, initially over the next 12 months.

There is also a vital social and economic context around sustainable cocoa production. This is the main livelihood basis for approximately 30% of the population and Ghana’s 2nd place export. At the same time cocoa is a key driver of encroachment of forest reserves. Preliminary research in a traditional cocoa growing area of the Eastern Region of Ghana has documented that traditional shade-tree cocoa contains about two-thirds of the carbon stored in intact high forest, and about twice that found in intensive cocoa agriculture, including hybrid or non-shade cocoa systems. Particularly in the Western Region, there is a rapidly advancing full sun hybrid cocoa frontier causing major carbon emissions. In addition hybrid cocoa is unsustainable in the longer term, unlike shaded cocoa. This sets up a major social and economic potential for –’Cocoa Carbon’, as well as its importance in global climate change mitigation.

There is an urgent need to explore scenarios for REDD carbon payments that may incentivize farmers to prefer shade-tree cocoa over hybrid cocoa or other low carbon storage land use options, and thus promote a sustainable land use system (ensuring the long-term supply of cocoa exports) with major poverty reduction benefits. Rapid progress is needed on three main fronts: (a) Understanding and capacity at the policy level, including for the development of a facilitating policy, legal and institutional framework for carbon finance, especially REDD. (b) Technical capacity building, including for national and sub-national or project level carbon baselines, monitoring and accounting. This roundtable is the first in a series of high level policy and technical meetings on carbon finance over the next 12 months: two 1.5 day roundtable events on developing the legal, policy and institutional framework for forest carbon finance, involving about 40 senior government, private sector and civil society representatives, feeding into a major Katoomba Group Conference on carbon finance, with a special focus on tree crops, to be held in Accra in October 2009. Support is also being provided to Ghana’s technical committee to move the process forward between the various meetings.