Voluntary Carbon Market
The Voluntary Carbon Market Analytics (VCM) Analytics Module provides a detailed overview and analysis of the country's voluntary carbon market activity. It is designed to offer policymakers, investors, and other stakeholders a comprehensive understanding of the current state and dynamics of the VCM in the country.
Country
Breakdown of Project Registrations by Sector
The dominance of the Household & Community sector in Ghana's Voluntary Carbon Market highlights the country's strong commitment to projects that deliver direct social impacts alongside carbon reductions. The significant presence of the Forestry & Land Use sector (22%) showcases Ghana's strategic use of its rich forest resources to contribute to climate goals, leveraging the carbon sequestration potential of these ecosystems. The emerging interest in Chemical Processes (4%), although currently small, suggests a growing recognition of the role industrial carbon capture and storage solutions can play in Ghana's carbon market. With targeted policy support and increased investment, this sector could expand and diversify Ghana's carbon reduction strategies.
Composition of Issued Carbon Credits by Sector
The alignment between the distribution of project registrations and issued carbon credits, with 89% of credits originating from the Household & Community sector, underscores the effectiveness and scalability of community-centric projects in delivering measurable carbon reductions. The Forestry & Land Use sector's contribution of 10% to issued credits highlights its crucial role in carbon sequestration and the potential for further expansion of nature-based solutions in Ghana's carbon market. While the Chemical Processes sector currently accounts for a marginal 2% of issued credits, it presents an opportunity for growth and diversification, particularly as industrial carbon capture and storage technologies advance and become more cost-effective.
Historical Comparison of Issued and Retired Carbon Credits
The growing trend in both issued and retired carbon credits from 2007 to 2023 is a positive indication of Ghana's active and expanding carbon market. The significant increase in issued credits in recent years, particularly in 2023, demonstrates robust demand and the successful scaling of projects. However, the slower pace of credit retirement compared to issuance necessitates encouraging the retirement of credits, through increased awareness, incentives, and partnerships with organisations and nations committed to emission reduction and removal. This can help Ghana realise the full potential of its carbon market in driving real-world climate action.
Distribution of Carbon Projects
The emphasis on community and conservation projects underscores Ghana's strategic focus on initiatives that deliver tangible benefits to local populations. These projects not only contribute to carbon reduction but also improve the quality of life for residents, addressing social and environmental challenges simultaneously. The lower representation of more diversified projects, such as those focusing on 'Biodiversity Conservation' and 'Other Renewable Energy,' indicates room for growth in these sectors. By encouraging the development of a wider range of projects, Ghana can tap into the multiple co-benefits of carbon reduction initiatives, such as protecting biodiversity, promoting sustainable land use, and fostering the adoption of renewable energy technologies. Diversifying the project portfolio can also attract a broader range of investors and stakeholders, strengthening the resilience and long-term sustainability of Ghana's carbon market.
Stages of Voluntary Carbon Projects
The distribution of projects across various lifecycle stages in Ghana's carbon market pipeline provides valuable insights into the project development process. The presence of 7 listed projects and 6 in the certification stage indicates a healthy progression towards project realization, demonstrating the market's ability to move projects forward. However, the existence of 5 projects under validation and several in earlier stages, such as 'Registration Requested,' suggests potential bottlenecks or delays in project maturation. To accelerate project certification and increase the market's output, Ghana could focus on streamlining processes, providing clearer regulatory guidelines, and offering targeted support to project developers.
Carbon Project Registrations by Certification Standard
The Gold Standard dominates the certification landscape in Ghana, representing a majority of the market share. This prevalence indicates that GS's rigorous standards for quantifying, monitoring, and reporting carbon emissions are well-trusted and widely adopted within the country. Gold Standard is known for its focus on achieving sustainable development outcomes alongside carbon reduction, especially in household and community projects.
Proportion of GHG Removals to Reductions
The overwhelming focus on GHG reductions in Ghana's carbon market, with only a minor fraction of activities dedicated to permanent GHG removals, aligns with global trends where reduction projects are often more straightforward to implement and verify. This distribution reflects the immediate need to mitigate emissions from sources like fossil fuels and deforestation, which contribute significantly to climate change. However, to achieve long-term climate resilience and align with international climate targets, Ghana will need to increase its capacity and investment in technologies and projects that facilitate permanent GHG removals. By fostering research, development, and deployment of removal technologies, such as direct air capture and enhanced mineralization, Ghana can position itself as a leader in this emerging field and attract investment from international partners seeking to support comprehensive climate solutions.
Yearly Trend of Carbon Project Registrations with Issuances
The trend in carbon project registrations reflects Ghana's evolving engagement in the carbon market. The initial slow growth suggests a period of market development and capacity building, as stakeholders navigated the complexities of carbon project development and certification. The peak in 2019 indicates a surge in market participation, likely driven by enhanced national and international focus on climate commitments, as well as increased awareness and interest among project developers. However, the drop in registrations and issuances from 2020 shows the impact of global factors on VCM activity. To sustain growth and maintain the momentum achieved in 2019, Ghana will need to implement strategies that address these potential barriers and create an enabling environment for continued carbon market engagement. This could involve streamlining regulatory processes, providing targeted incentives for project developers, and fostering international partnerships to support market development. By proactively addressing the factors contributing to the 2022 decline and implementing measures to boost market participation, Ghana can regain its growth trajectory and establish itself as a robust and attractive destination for carbon market investment.
Sources:
- Berkeley Carbon Trading Project's Voluntary Registry Offsets Database which contains all carbon offset projects listed globally by four major voluntary offset project registries: American Carbon Registry (ACR), Climate Action Reserve (CAR), Gold Standard, and Verra (VCS). These four registries generate almost all of the world's voluntary market offsets and include UN Clean Development Mechanism (CDM) projects that transitioned into one of the voluntary registries.
Citation:
Barbara K. Haya, Aline Abayo, Ivy S. So, Micah Elias. (2024, May). Voluntary Registry Offsets Database v11, Berkeley Carbon Trading Project, University of California, Berkeley.
Disclaimer : The insights presented in this module are derived from verified registries, third-party databases, and proprietary analytics to offer a robust view of market dynamics. However, these registries capture only a portion of actual activities, as delays in project validation, inclusion, and approval—due to VVB (Validation and Verification Body) processes and other constraints—can create data gaps. Additionally, carbon market trends are inherently volatile. Users are advised to cross-reference this data with other sources before making decisions. Verst Carbon disclaims liability for actions based on these insights.