Estimating the distributive impacts of climate mitigation policies in the power sector in Ghana

29 Jun 2023
29 Jun 2023

Monica Lambon-Quayefio, Bruno Merven, Alison Hughes, Faaiqa Hartley, and Robert D. Osei
TSITICA Project Working Paper no. 8, June 2023.
Published by ARUA Centre of Excellence in Climate Change and Development & African Centre of Excellence for Inequality Research.

Cover of Estimating the distributive impacts of climate mitigation policies in the power sector in Ghana

Many developing countries have been encouraged to adopt various mitigation and adaptation strategies to minimise the effects of climate change in all sectors of the economy. However, there is limited understanding of the full macroeconomic and distributive effects of these strategies that such countries implement. Using an approach which links the power sector economic model with the computable general equilibrium model, the current study compares two mitigation scenarios with the reference case scenario which illustrates the impacts of the existing mitigation strategies. Considering two sources of financing climate mitigation in Ghana; under moderate and ambitious mitigation scenarios, the findings suggest that climate change significantly reduces GDP and this reduction ranges from 1.5% – 8.1% in the long term. However, these reductions are offset significantly when GDP increases between 2.7% – 4% in the long term and when the mitigation efforts are financed from foreign sources. Results from the redistributive analyses suggest declines in household incomes with largest impacts on less educated rural farm households. Again, foreign financing significantly minimises the negative impacts of climate change on poverty. Read more

TSITICA was a collaborative, multi-country interdisciplinary research project. It brought together two ARUA Centres of Excellence with researchers from the universities of Ghana, Nairobi and Cape Town, and from the UK universities of Bristol, East Anglia and Manchester and the London School of Economics. The support of the African Research Universities Alliance and UK Research and Innovation are gratefully acknowledged. Visit project website.