The International Perspective for Policy Governance (IPPG), has called on President John Dramani Mahama to reconsider his proposed decision to scrap the emissions levy.
In a statement issued and signed on Wednesday, January 15, 2025 by Research Fellow at the International Perspective for Policy and Governance (IPPG), Mr. Seth Owusu-Mante said while the intent to scrap various taxes aims to alleviate economic burdens on citizens, IPPG retaining the emissions levy and strategically channeling its revenues into climate finance will support the government in fulfilling its climate change, green growth, and renewable energy manifesto promises.
“Additionally, the government could utilize the revenues to incentivize companies to adopt environmentally responsible expansions under the 24-Hour Economy policy and further finance initiatives to combat air pollution to reduce the estimated 28,000 annual premature deaths caused by air pollution in Ghana”
The emissions levy was introduced in December 2023 through the enactment of the Emissions Levy Act, 2023 (Act 1112) with a primary goal to impose charges on carbon dioxide equivalent (CO2e) emissions from key sectors such as construction, manufacturing, mining, energy, and internal combustion engine (ICE) vehicles.
IPPG, however, stated that the lack of a clearly allocated mechanism for revenue from the levy has been an oversight by the New Patriotic Party (NPP) administration undermining one of the core principles of any carbon tax and the reinvestment of revenues into clean energy projects and climate action.
It also said without reinvestment, the levy is perceived as a general tax rather than a transformative tool for addressing climate challenges and fostering green economic growth.
It said “Climate change poses significant challenges to Ghana, with severe impacts on economic sectors including agriculture, water resources, health, and infrastructure. Its effects exacerbate vulnerabilities, particularly for rural, women, and marginalized communities, who are disproportionately affected by extreme weather events, erratic rainfall patterns, and rising temperatures”.
It said the NDC, in its manifesto also acknowledged the challenges and outlined a series of actions to address climate impacts through cross-sectoral approaches as such establishing a dedicated climate fund using revenues from the emissions levy will provide an essential local financing mechanism to implement these manifesto plans.
It said such a fund would also ensure predictable and accessible resources to drive climate adaptation and mitigation efforts as well as help reduce Ghana’s reliance on external aid for climate finance and strengthen the country’s efforts to meet its climate and development goals.
It also recommended cross-sectoral climate Resilience Initiatives, such as climate-smart agriculture, water management, forestry, incentivizing Green Practices for a 24-Hour Economy, Scaling Renewable Energy to drive large-scale renewable energy projects such as solar and wind farms, waste-to-energy systems, and off-grid solutions, as outlined in the NDC manifesto among others.
It further indicated that given the NDC’s earlier promise to repeal the emissions levy, it is crucial for the government to adopt a pragmatic and strategic approach while consulting stakeholders on the benefits of retaining the emissions levy.
By Ebenezer K. Amponsah