Investments in environment: creating a comfortable environment subject to climate change, using Ghana as a case study

Preamble

Climate change presents both a challenge and an opportunity for nations world- wide. For Ghana, a developing country with an economy reliant on agriculture, mining, and energy, the impact of climate change is becoming increasingly evident. Rising temperatures, erratic rainfall, and coastal erosion threaten food security, infrastructure, and public health. With strategic investments, Ghana can harness the benefits of green energy, sustainable agriculture, and climate adaptation to cre- ate a more resilient economy.
According to Pierre Laporte, World Bank Country Director for Ghana, Liberia, and Sierra Leone. “Ghana’s contribution to global greenhouse gases emis- sions is small, with emissions on a per capita basis at 24% of the global average. The country can take a more resilient development pathway, avoiding costly lock-ins,

leapfrogging to cutting-edge technologies, and starting to mobilize climate finance. “This essay explores how targeted environmental investments can enhance eco- nomic and social stability, ensuring a comfortable and sustainable environment for future generations.

Core Hypothesis: Investing in Environmentally Sustainable Practices to Mitigate Climate Change Effects and Enhance Economic Growth

Environmental investments have the potential to drive economic transforma- tion in Ghana. By prioritising renewable energy, climate-smart agriculture, affor- estation, and waste management, Ghana can not only mitigate climate change effects but also create jobs, boost GDP, and improve the quality of life for its cit- izens.

Analytical Insights and Statistical Data

Ghana stands at a critical juncture where climate change, environmental degradation, and resource management directly influence economic stability and national development. With climate-related disasters such as floods and drought already costing the nation an estimated 1.7% of its GDP annually, a figure pro- jected to increase by 23% by 2050 without intervention, this could rise to 4% by 2050 (EPA, 2022). Ghana’s Renewable Energy Master Plan aims to achieve a 10% renewable energy contribution to the national energy mix by 2030. Solar and wind energy investments could generate thousands of jobs while reducing reliance on fossil fuels (Energy Commission of Ghana, 2021).
Again, Ghana loses about 135,000 hectares of forest annually due to logging and farming. Agroforestry initiatives can reverse this trend, increasing carbon sequestration and improving soil fertility for better yields (Forestry Commission, 2023). Accra, the capital of Ghana alone generates over 3,000 metric tons of waste daily, with only 40% properly managed. Investments in recycling and waste-to- energy projects can reduce pollution and generate new economic opportunities (Zoomlion Ghana Limited, 2022). The Climate Change Vulnerability Index places Ghana in a high-risk category, predicting that erratic rainfall patterns will continue to affect cocoa and maize production, key contributors to the country’s economy (World Bank, 2023).

The Role of Illegal Mining (Galamsey) in Climate Change

One of the most pressing human-induced environmental challenges in Ghana is illegal small-scale mining, known as galamsey. While mining contributes signifi- cantly to Ghana’s GDP, illegal mining activities have led to massive environmen- tal degradation. Deforestation and Land Degradation, large swathes of forests are

cleared to make way for illegal mining activities, leading to a loss of biodiversity and disruption of ecosystems. The use of mercury and other harmful chemicals in ille- gal mining contaminates rivers and water bodies, affecting aquatic life and making drinking water unsafe for communities (Amoah, 2022)

The Future of ESG and Its Role in Ghana’s Environmental Investments

Environmental, Social, and Governance (ESG) principles are becoming essen- tial in global investment decisions. As Ghana moves towards sustainable devel- opment, the integration of ESG frameworks will play a crucial role in shaping its environmental policies and business practices. Companies operating in Ghana will need to adhere to strict environmental compliance standards, reduce carbon emis- sions, protect biodiversity, and invest in circular economies.
ESG frameworks should emphasize community engagement, fair labour prac- tices, and public health. Investment in sustainable agriculture, clean water, and education will enhance social equity and economic empowerment. Ghana has an opportunity to attract foreign direct investment (FDI) by aligning its economic pol- icies with sustainability goals. The government must establish clear ESG policies and encourage businesses to adopt sustainable practices for long-term economic resilience.

Economic and Social Effects of Environmental Investments

Environmental investments, from renewable energy projects to sustainable agriculture and waste management play a crucial role in fostering long-term eco- nomic and social development. These investments drive economic growth by creating jobs, improving resource efficiency, and enhancing productivity while mitigating environmental risks. They also yield significant social benefits, such as improved public health, increased resilience to climate change, and enhanced quality of life.

Economic Effects

Investment in the environment has significant economic effects, including job creation, increased agricultural productivity, foreign direct investment (FDI), and energy security. In Ghana, several initiatives illustrate these impacts: Investments in reforestation and afforestation projects, such as the Ghana Forest Plantation Strategy, have created thousands of jobs for local communities. Ghana’s push for eco-friendly industries has attracted FDI, such as the Norwegian-backed Green Ghana Initiative, which supports reforestation and sustainable timber production, drawing international partnerships.

Social Effects

Investing in the environment has significant social benefits. Reduced air and water pollution lowers cases of respiratory diseases and waterborne illnesses, improving public health and reducing healthcare costs. Sustainable land and water management ensures that local communities have access to clean resources while preserving biodiversity, which supports ecosystems and agriculture. Greener cities with more trees, parks, and clean energy enhance residents’ quality of life, provid- ing better air quality, recreational spaces, and mental well-being.

General Conclusions and Expected Results

Investing in Ghana’s environmental sector is no longer an option but a neces- sity. Ghana can mitigate the adverse effects of climate change while fostering economic growth. The expected results include a diversified economy, enhanced food security, improved public health, and a more resilient society. Illegal mining (galamsey) remains a significant threat to Ghana’s climate resilience.
The future of ESG in Ghana presents a new frontier for responsible economic development. By integrating ESG principles into national policies and business operations, Ghana can secure international investments, ensure environmental sustainability, and promote social equity.