Climate Risk and Business
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CLIMATE RISK AND BUSINESS AGRIBUSINESS Public Disclosure Authorized Ghana Oil Palm Development Company Full Report Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Acknowledgments © 2011, International Finance Corporation Authored by Vladimir Stenek, International Finance Corporation Richenda Connell, Acclimatise The authors wish to thank the following institutions for their valuable contributions to the study: Ghana Oil Palm Development Company (GOPDC); Agriculture- engineering Department, Faculty of Engineering Science, University of Ghana, Legon; CSIR Water Research Institute, Ghana; Department of Crop Science, University of Ghana, Legon; Department of Geology, University of Ghana, Legon; Food and Agriculture Organization, Ghana; Ghana Environmental Protection Agency, Ghana Meteorological Services, GOPDC Outgrowers’ Association; Kade Agricultural Research Center, University of Ghana, Kwaebibirem District, Ghana; Oil Palm Research Institute, Ghana; Presidential Special Initiative, Ghana; St. Dominic’s Hospital, Akwatia; University of Ghana, Legon; World Health Organization, Ghana; Centre de cooperation international en recherché agronomique pour le developpement (CIRAD); and SIAT. CLIMATE RISK AND BUSINESS AGRIBUSINESS Ghana Oil PalmDevelopment Company Full Report Table of Contents Chapter 1: Observed climate and future climate change at GOPDC ........................................................... 9 1.1 Observed climatic conditions at GOPDC................................................................................................10 1.2 Future climatic conditions at GOPDC.....................................................................................................18 Chapter 1 References.........................................................................................................................................20 Chapter 2: Climate risk analysis for oil palm yield at GOPDC Kwae Nucleus Estate.................................21 2.1 Literature review: factors influencing oil palm yield ................................................................................22 2.2 Analysis of current climatic conditions at Kwae Nucleus Estate and their suitability for oil palm production ...........................................................................................................................................................32 2.3 Analyses of current and potential future fresh fruit bunch yields at Kwae Nucleus Estate .....................32 2.4 Potential future impacts of climate change on financial performance.....................................................61 2.5 Concluding remarks and suggested adaptation actions.........................................................................63 Chapter 2 References.........................................................................................................................................64 Chapter 3: Climate risk analysis for oil palm pests and diseases at GOPDC ............................................66 3.1 Pests and diseases relevant to oil palm at GOPDC and potential for losses of FFB..............................67 3.2 Pest and disease control at GOPDC and costs......................................................................................68 3.3 Climate sensitivities of pests and diseases and possible impacts of climate change.............................69 3.4 Recommended adaptation actions.........................................................................................................71 Chapter 3 References.........................................................................................................................................72 Chapter 4: Climate risk analysis for ecosystem services............................................................................74 4.1 Pollination...............................................................................................................................................75 4.2 Biodiversity plots ....................................................................................................................................78 4.3 Adaptation options and conclusions.......................................................................................................80 Chapter 4 References.........................................................................................................................................81 Chapter 5: Climate risk analysis for GOPDC industrial operations.............................................................83 5.1 Electrical equipment...............................................................................................................................84 5.2 Mill..........................................................................................................................................................84 5.3 Cooling water system.............................................................................................................................85 5 5.4 Refinery..................................................................................................................................................87 5.5 Fractionation plant..................................................................................................................................95 5.6 Power production ...................................................................................................................................98 Chapter 5 References.......................................................................................................................................101 Chapter 6: Climate risk analysis for water and wastewater at GOPDC....................................................102 6.1 Groundwater ........................................................................................................................................103 6.2 Wastewater ..........................................................................................................................................111 6.3 Conclusion ...........................................................................................................................................113 Chapter 6 References.......................................................................................................................................113 Chapter 7: Climate risk analysis for community and social issues ...........................................................116 7.1 Climate impacts on the community around GOPDC ............................................................................117 7.2 General social issues in the community around GOPDC.....................................................................121 7.3 Direct and indirect impacts of community issues on GOPDC...............................................................121 7.4 Possible GOPDC actions .....................................................................................................................122 Chapter 7 References.......................................................................................................................................125 Chapter 8: Climate risk analysis for malaria at GOPDC ...........................................................................127 8.1 Climate and malaria .............................................................................................................................130 8.2 Economic impacts of malaria for GOPDC ............................................................................................136 8.3 Impacts of climate change....................................................................................................................138 8.4 Existing and proposed adaptation actions............................................................................................138 Chapter 8 References.......................................................................................................................................140 Annexes .................................................................................................................................................... 142 Annex A: Greenhouse gas emissions scenarios...............................................................................................142 Annex B: Results of statistical analyses of FFB yields and climate variables ...................................................144 Annex C: Methods used to perturb observed yield models...............................................................................154 Annex D: Statistical tests ..................................................................................................................................155 Annex E: Results of Pearson’s correlation analysis..........................................................................................156 6 Overview of Ghana Oil Palm Development Company Ghana Oil Palm Development Company (GOPDC) Limited is an integrated agroindustrial company specialized in the organic cultivation of oil palm (OP), extraction of crude palm oil (CPO) and palm kernel oil (PKO) and in the refining and fractionation of CPO. The company was set up in 1975 as a state enterprise with the main objective of diversifying agricultural production in Ghana and was later transformed into a limited liability company in 1995. Located in the Eastern Region