Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Ghana COU Economics of Adaptation to Climate Change Climate to Adaptation of Economics n TRY STUDY TRY G hana i ii ECOnOMICS OF aDaPTaTIOn TO CLIMaTE ChanGE EACC Publications and Reports 1. Economics of Adaptation to Climate Change: Synthesis Report 2. Economics of Adaptation to Climate Change: Social Synthesis Report 3. The Cost to Developing Countries of Adapting to Climate Change: New Methods and Estimates Country Case Studies: 1. Bangladesh: Economics of Adaptation to Climate Change 2. Bolivia: Adaptation to Climate Change: Vulnerability Assessment and Economic Aspects 3. Ethiopia : Economics of Adaptation to Climate Change 4. Ghana: Economics of Adaptation to Climate Change 5. Mozambique: Economics of Adaptation to Climate Change 6. Samoa: Economics of Adaptation to Climate Change 7. Vietnam: Economics of Adaptation to Climate Change Discussion Papers: 1. Economics of Adaptation to Extreme Weather Events in Developing Countries 2. The Costs of Adapting to Climate Change for Infrastructure 3. Adaptation of Forests to Climate Change 4. Costs of Agriculture Adaptation to Climate Change 5. Cost of Adapting Fisheries to Climate Change 6. Costs of Adaptation Related to Industrial and Municipal Water Supply and Riverine Flood Protection 7. Economics of Adaptation to Climate Change-Ecosystem Services 8. Modeling the Impact of Climate Change on Global Hydrology and Water Availability 9. Climate Change Scenarios and Climate Data 10. Economics of Coastal Zone Adaptation to Climate Change 11. Costs of Adapting to Climate Change for Human Health in Developing Countries 12. Social Dimensions of Adaptation to Climate Change in Bangladesh 13. Social Dimensions of Adaptation to Climate Change in Bolivia 14. Social Dimensions of Adaptation to Climate Change in Ethiopia 15. Social Dimensions of Adaptation to Climate Change in Ghana 16. Social Dimensions of Adaptation to Climate Change in Mozambique 17. Social Dimensions of Adaptation to Climate Change in Vietnam 18. Participatory Scenario Development Approaches for Identifying Pro-Poor Adaptation Options 19. Participatory Scenario Development Approaches for Pro-Poor Adaptation: Capacity Development Manual Ghana COUnTRY STUDY i Economics of Adaptation to Climate Change Ghana Ministry of Foreign Affairs Government of the Netherlands ii ECOnOMICS OF aDaPTaTIOn TO CLIMaTE ChanGE © 2010 The World Bank Group 1818 H Street, NW Washington, DC 20433 Telephone: 202-473-1000 Internet: www.worldbank.org E-mail: [email protected] All rights reserved. This volume is a product of the World Bank Group. The World Bank Group does not guarantee the accuracy of the data included in this work. 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All images © The World Bank Photo Library, except Pages 4, 31, 34 and 68 © Shutterstock Ghana COUnTRY STUDY iii Contents Abbreviations and Acronyms vii Acknowledgements ix Caveat xi Executive Summary xiii Impacts of Climate Change xiii Adaptation to Climate Change xiv Lessons and Policy Recommendations xiv 1 Introduction 1 Study Objectives 2 Organization of Report 3 2 Overview of the EACC Global Track Study 5 3 Methodology 11 Overall Approach and Key Assumptions 11 Climate Forecasts 12 Sector-Specific Approaches 14 4 Study Results 35 Overview of the Ghanaian Economy 35 Climate Change Projections 39 Economic Impacts of Climate Change – CGE Model Results 42 Economic Implications of Adaptation to Climate Change – CGE Model Results 54 Adaptation Options 57 Adaptation Costs 59 Social Dimensions 62 iv ECOnOMICS OF aDaPTaTIOn TO CLIMaTE ChanGE 5 Summary and Policy Implications 69 Climate Change Impacts 69 Adaptation to Climate Change Costs 70 Looking forward 70 Summary Matrix 73 References 77 Annexes (available on line at www.worldbank.org/eacc) Annex 1. Cli-Crop Modelling for Agriculture Annex 2. Dose-Response Model for Roads Annex 3. IMPEND Model for Energy and Water Annex 4. DIVA Model for Coastal Zone Annex 5. Social Dimensions of Climate Change Annex 6. Computable General Equilibrium (CGE) Modeling Tables Table 1. Total Annual Costs of Adaptation for All Sectors, by Region, 2010–50 7 Table 2. Total Annual Costs of Adaptation for all Sectors, by Region and Period, 2010–50 7 Table 3. A Comparison of Adaptation Cost Estimates ($ billions) 8 Table 4. GCM Scenarios for Ghana Country Track Study 12 Table 5. Trends in the Growth Rate of the Transport Sector 19 Table 6. Share of the Transport Sector in Total GDP in Purchaser’s Value, 2002–2007 (%) 19 Table 7. Road Sector Vulnerability to Potential Climate Change 20 Table 8. Dose-Response Descriptions for Maintenance Costs 20 Table 9. Electricity and Water Subsectors Growth Rates of Real GDP 23 Table 10. Electricity and Water’s Share of GDP and Contribution to Overall GDP Growth 23 Table 11. Projected Population of the Coastal Regions and Estimated Population at risk to Sea Level Rise 27 Table 12. Land Area Distributions of the Ten Provinces of Ghana, divided into three zones 30 Table 13. Economic Development Indicators in Ghana, 2005 to 2008 36 Table 14. Temperature (Co) in Regional CC Scenarios, 2010–50 38 Table 15. Precipitation Projections for Ghana’s 16 subbasins – Descriptive Statistics 41 Ghana COUnTRY STUDY v Table 16. Standard Deviation of Annual Real Consumption Growth 45 Table 17. Welfare Impact without Adaptation Investments 45 Table 18. DIVA Annual Results for High Sea Level Rise Scenario 51 Table 19. DIVA Annual Results for Low Sea Level Rise Scenario 52 Table 20. Mean, Standard Deviation, and Extreme Values of Annual GDP Growth Rates by Region, 2006–50 53 Table 21. Deviations of Welfare from Baseline under Alternative Adaptation Strategies 56 Table 22. Average Annual Real GDP Growth Rates (2010–50) under Alternative Adaptation Strategies (%) 56 Table 23. Regional Shares in Agricultural Production by Commodity 60 Table 24. Commodity Composition of Agricultural Production by Region 61 Table 25. Summary of Ghana Coastal Seal Level Rise (SLR) Annual Adaptations Costs 65 Table 26. Summary recommendation on low-regret options and policy interventions in short and long term following the Ghana EACC Analysis 74 Figures Figure 1. Shares of the Total Annual Costs of Adaptation by Region 2010–50 7 Figure 2. Flow Chart of Model Sequencing 14 Figure 3. Trends in the Growth Rate of the Agricultural Sector, 2002–10 16 Figure 4. Rural-Urban Potable Water Coverage by Region, 2006 and 2007 (%) 26 Figure 5. Ghana, West Africa: (a) Geographical location, (b) Administrative units (termed provinces) and major coastal towns, and (c) The coastal zone 29 Figure 6. Ghana Sector Contribution to the GDP 37 Figure 7. Annual Real Growth Rate by Sector, 2002–09 37 Figure 8. Ghana Dry Scenario Temperature Changes Compared to Base, 2010–50 39 Figure 9. Temperature Variability Compared to Base 40 Figure 10. Surface flow average difference from the no-climate change scenario, 2010–50 41 Figure 11. Annual Deviations of Real GDP from Base, 2010–2050 (%) 42 Figure 12. GDP Growth Path in Levels 2010–2050 43 Figure 13. Terminal Period Real GDP (average annual GDP, 2046–50) 43 Figure 14. Terminal Real Household Consumption Level (annual average, 2046–50) relative to 2005 Level 45 Figure 15. Decomposition of Climate Change Impacts on Present Vale of Real Absorption (deviation from base in billion $) 46 vi ECOnOMICS OF aDaPTaTIOn TO CLIMaTE ChanGE Figure 16. Average Annual Agricultural Real GDP, terminal period 2046–50 46 Figure 17a. Real GDP Deviation from Base for Maize, 2020–50 47 Figure 17b. Real GDP Deviation from Base for Cocoa, 2020–50 47 Figure 17c. Real GDP Deviation from Base for Cocoa, South Savannah 2020–50 47 Figure 18. Climate Change Impacts of Cocoa Productivity in Ghana (deviations from baseline yields) 48 Figure 19. Decadal Average Ratios of Future Livestock Net Revenues to Net Revenues under Baseline Conditions, Ghana Dry (on left) and Wet (on right) Scenarios, 2001–50 50 Figure 20. Decadal Average Ratios of Future Livestock Net Revenues to Net Revenues under Baseline Conditions, Global Dry (on left) and Wet (on right) Scenarios, 2001–50 50 Figure 21. Average Annual Water and Energy Sector Real GDP, 2046–50 51 Figure 22. Deviations of Welfare from Baseline under Alternative Adaptation Strategies 56 Figure 23. Annual Road Maintenance Costs, 2010–50 63 Figure 24. Annual Average Road Maintenance Costs, 2010–50 63 Figure 25. Total Energy Adaptation Costs 63 Ghana COUnTRY STUDY vii Abbreviations and Acronyms AR4 Fourth Assessment Report ITCZ Inter-Tropical Conversion Zone BAU Business-as-usual LCA Latin America and Caribbean Region CAADP Comprehensive Africa Agriculture MDGs Millennium Development Goals Development Program NCAR National Center for