For many years, forests have mainly been viewed as sources of timber, fuelwood and land for economic activities. But as the world intensifies efforts to tackle climate change, forests are gaining a new economic value, not only for what they produce, but for their ability to absorb carbon dioxide and help reduce global warming.
This emerging opportunity, known as the forest carbon market, is attracting increasing attention globally, with countries and companies looking for ways to finance climate action.
However, experts say that for Ghana to fully benefit from this growing market, the country must address important questions around transparency, accountability, ownership and how benefits from carbon-related activities are shared.
It is against this background that Transparency International Ghana (TI-Ghana) has launched a project aimed at strengthening governance systems around Ghana’s forest carbon markets.
The project, titled “Towards Inclusive Governance for Forest Carbon Markets in Ghana,” seeks to promote transparency, accountability and inclusive participation as Ghana positions itself to benefit from emerging opportunities in climate finance.
The initiative is being implemented under the Forest Governance, Markets and Climate Programme Phase II (FGMC II), with funding support from the UK Foreign, Commonwealth and Development Office (FCDO).
The launch and inception meeting brought together key stakeholders in Ghana’s climate and governance space, including civil society organisations (CSOs), carbon market organisations (CMOs), representatives from Transparency International Ghana (formerly Ghana Integrity Initiative), the Environmental Protection Agency (EPA), the Basel Institute on Governance, Resource Extraction Monitoring (REM), academia, private sector actors and other stakeholders involved in forest governance and climate finance.
The engagement provided a platform for stakeholders to discuss opportunities and risks associated with Ghana’s emerging forest carbon market, particularly how the country can build a system that attracts investment while ensuring fairness for communities and other stakeholders.
Understanding forest carbon: How trees become part of a global market
Unlike traditional markets where people buy and sell physical goods such as cocoa, gold or oil, the forest carbon market deals with the environmental service provided by forests.
Simply put, forest carbon refers to the carbon dioxide (CO₂) absorbed and stored by trees, plants and forest soils.
Trees naturally absorb carbon dioxide from the atmosphere through photosynthesis and store that carbon in their trunks, branches, roots and surrounding soil.
This makes forests a carbon sink, meaning they help remove greenhouse gases from the atmosphere.
The challenge is that activities such as illegal mining, logging, agricultural expansion and deforestation can destroy forests and release the stored carbon back into the atmosphere.
As countries seek to reduce emissions and limit global temperature increases, protecting forests has become not only an environmental responsibility but also an economic opportunity.
How carbon credits create value
The economic side of forest carbon comes through what is known as carbon credits.
A carbon credit is a certificate representing a verified reduction or removal of greenhouse gas emissions.
In simple terms, one carbon credit usually represents one tonne of carbon dioxide equivalent that has either been removed from the atmosphere or prevented from being released.
For example, if a community protects a forest and experts verify that the forest has prevented the release of 100,000 tonnes of carbon dioxide, that project may generate 100,000 carbon credits.
Those credits can then be purchased by companies or organisations seeking to support climate action and reduce their environmental impact.
The money generated from these transactions can support forest protection, community development, conservation activities and sustainable livelihoods.
Ghana’s opportunity and the governance challenge
Speaking at the launch, Project Coordinator at TI-Ghana, Michael H. Okai, said Ghana’s growing participation in forest carbon markets presents an opportunity for the country to attract climate finance, but strong governance will determine whether the benefits are achieved.
He said transparency, accountability and inclusive decision-making will be critical to ensuring that climate finance supports both environmental protection and the people connected to forest resources.
“Good governance is fundamental to sustainable development. Strong institutions, informed citizens, transparent decision-making and accountable leadership remain essential ingredients for ensuring that climate finance serves both people and the planet,” he said.
Mr. Okai stressed the need for collaboration among government institutions, traditional authorities, communities, private sector actors and civil society organisations to build confidence in the sector.
Forest carbon as a new economic opportunity
Senior Research Scientist at the Council for Scientific and Industrial Research-Institute for Industrial Research (CSIR-IIR), Dr. Kofi Ampomah Benefo, described forest carbon markets as an emerging business opportunity created by global efforts to address climate change.
He explained that while traditional markets involve the exchange of physical goods, carbon markets involve trading verified climate benefits.
“Forest carbon is basically the absorption of carbon dioxide by trees,” Dr. Benefo explained.
He noted that as the world seeks to reduce emissions and remain within global climate targets, countries that can protect forests and reduce carbon emissions can participate in a growing international market.
Dr. Benefo compared the forest carbon market to other forms of economic activity, explaining that understanding how the market works is important for businesses, institutions and individuals interested in participating.
Legal questions over ownership of forest carbon
While the opportunity is growing, legal experts say Ghana must address unresolved questions around ownership and benefit sharing.
Legal representative from TylorCrabbe, Dennis Lang-Yel Tuoyire, highlighted uncertainty surrounding who has legal rights over forest carbon and the financial benefits generated from carbon credits.
He explained that although Ghana has introduced measures to regulate carbon market activities, including the establishment of structures such as the Carbon Market Office, Carbon Market Committee and carbon registry, there remains a gap in clearly defining ownership rights over forest carbon.
According to him, questions remain over whether carbon benefits should belong to the State, landowners, traditional authorities, farmers or investors involved in carbon projects.
He explained that existing laws on land and tree ownership create further complexity.
For instance, a person may own land but not necessarily own naturally occurring trees on that land, as such trees may be considered national resources. However, individuals who plant trees may have stronger claims over those planted trees and related benefits.
Building confidence in Ghana’s carbon future
As Ghana seeks to position itself within the global climate finance landscape, stakeholders believe governance will determine whether forest carbon markets deliver meaningful economic benefits.
Beyond protecting forests, the emerging market has the potential to create new opportunities in conservation, investment, research, community development and sustainable businesses.
However, experts say the success of Ghana’s forest carbon market will depend on ensuring that the system is transparent, legally clear and inclusive.
