Ghana has started operating a Carbon Market Office (CMO) to trade in the multibillion business in the climate change space.

Carbon markets are trading systems in which carbon credits – a permit acting as commodity- are sold towards sustainable development.

The market helps in reducing greenhouse gas emission cost effectively.

One tradable carbon credit (a unit) equals one tonne of carbon dioxide or the equivalent amount of a different greenhouse gas reduced, removed or avoided.

Dr Daniel Tutu Benefoh, Ghana’s Focal Person, United Nations Framework Convention on Climate Change, disclosed this to the Ghana News Agency on Saturday.

“Just like we trade in gold and cocoa with other countries, we will export our surplus carbon credits to other countries that need the credits based on their limited allowances of emissions,” he said.

“The release of greenhouse gasses is posing a challenge to society that is why a price has been placed on it. This in a way is a form of the polluter pays system – the more you pollute, the more you pay.”

Dr Benefoh said the mandate of the CMO is to ensure that public and private project developers and other actors are provided with regulatory support and guidance on the rules and requirements of the business.

Its also provides approval letters, including authorisation of carbon credits within the permissible emission budget of Ghana’s updated Nationally Determined Contributions.

The CMO has developed a Ghana Carbon Registry (GCR) and other international private registries that provide registry services.

He said the registry had been set up to serve as a digital infrastructure system for recording and tracking carbon credits arising from mitigation projects being implemented in Ghana.

The GCR is managed by the CMO under the Ministry of Environment, Science, Technology, and Innovations with support from the Environmental Protection Agency.

The country’s quest to trade in that “commodity”, he said, was to contribute to raising funds to implement its 25 mitigation programmes in Ghana’s updated climate plans called Nationally Determined Contributions (NDCs) under the Paris Agreement to enable the country to live with climate change impacts and build resilience.

The country already has funding for nine of the NDCs, described as unconditional mitigation measures. The remaining 25 are conditional mitigation measures.

Dr Benefoh said the country needed over $6.3 billion in funding the implementation of the conditional mitigation programmes.

A study in 2020 provided grounds for the country to go into carbon trading, he said.

Mrs Juliana Bempeh, Principal Programme Officer at the EPA, said projects for the carbon trade must be centred around reduction in gas flaring in oil and gas production, landfill gas management, waste to energy, biological treatment of waste by compost and biogas.

Others are wildfire management, forest conservation and forest plantation, freight rail transport and electric vehicles, energy efficiency in residence, commerce, public buildings and industry.

The rest are energy-efficient and renewable energy-powered public water facilities, green cooling in air conditioners and domestic refrigerators, improved biomass and LPG cooking stoves, sustainable charcoal production, solar PV systems, mini-grids utility-scale solar and utility-scale wind.

She said the CMO was engaging some companies on the trading system.

The completion of regulations around Article 6.2 concluded at 26th Conference of Parties meeting in Glasgow, paved the way for Ghana to operationalise an already signed bilateral agreement with Switzerland on carbon trade.

It allows the two Parties to mobilise key national stakeholders to co-create a legally binding agreement to govern the generation, authorisation and tracking of Internationally Transferred Mitigation Outcomes (ITMOs) in the light of the requirements of the Article 6.2 cooperative approach.

So far, four countries – Switzerland, Sweden, Singapore, and Korea – are engaging Ghana at the bilateral level on carbon trade.