From Policy to Practice: An In-depth Review of Ghana’s Emissions Levy Act

Ghana’s 2020 updated Nationally Determined Contribution (NDC) commits to several policy actions aimed at achieving absolute greenhouse gas (GHG) emission reductions of 64 MtCO2e and avoiding at least 2,900 premature deaths per year through improved air quality.

In line with its commitment to curb pollution and reduce GHG emissions, the Government of Ghana (GoG) has enacted the Emissions Levy Act, 2023 (Act 1112). This Act imposes a levy on carbon dioxide equivalent (CO2e) emissions from specified sectors of the Ghanaian economy and on combustion emissions from gasoline and diesel vehicles.

The Act also serves as a policy instrument to implement the Environmental Fiscal Reform (EFR) envisaged by Ghana’s Medium-Term Revenue Strategy (MTRS 2024-2027). The goal of the EFR is to develop climate-friendly and environmentally sustainable policies that encourage the adoption of alternative and renewable energy sources while addressing harmful activities, such as those causing pollution.

With the introduction of this levy, Ghana becomes the third African country to implement a form of carbon tax, following South Africa and Mauritius. The President of Ghana assented to the Act on December 29, 2023. The Act was gazetted on December 29, 2023, and became effective on February 1, 2024.

This policy report provides an in-depth analysis of Ghana’s Emissions Levy Act, 2023, examining its objectives, key features, and potential impacts on reducing GHG emissions and improving air quality. The report also identifies critical implementation challenges, design gaps, and the necessity for transparent revenue allocation to enhance public acceptance and effectiveness. Through this comprehensive review, the report aims to offer valuable insights into how Ghana can leverage the Emissions Levy Act to achieve its environmental and public health goals while promoting sustainable economic development.

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