HIGHLIGHTS OF GHANA’S HIGHLIGHTS OF GHANA’S ENVIRONMENTAL FISCAL ENVIRONMENTAL FISCAL

REFORM POLICY (WIP)REFORM POLICY (WIP)

Presented by:Ebenezer Nortey (Ministry of Finance) at

UNEP Regional Workshop on Inclusive Green Economies for Poverty Reduction and Sustainable

Development in Africa, 28th February - 1st March 2015 at Cairo, Egypt

OutlineOutline

Why Environmental Fiscal Reforms (EFR)

Major Fiscal Policy ReformsFiscal, social and Environmental

implicationsImplementation/Institutional

ArrangementsRole of political economy,

challenges and mitigationConclusion

WHY EFRWHY EFR

Poverty Reduction •Addressing environmental problems that affect the Poor •Improved access to environmental infrastructure •Finances for pro-poor investments (e.g. education)

Fiscal Benefits •Revenue mobilization •Reduced distortions •Reduced drains on Public Finance

Environmental Benefits •Incentives for sustainable natural resource management •Incentives for curbing pollution (air, water, soil) •Funds for environmental agencies and investment

Major Fiscal Policy ReformsMajor Fiscal Policy Reforms

The EFR policy has 7 policy focus areas with 13 programme areas. These target the broad scope of environmental impacts and response in Ghana.

The policy themes and their respective programme areas are as follows:

Policy Themes Programme Areas1. Cross-sectoral

programme area 1:

programme area 2:programme area 3:

programme area 4:

Establishment of the Ghana EFR CommissionEstablishment of the Ghana Green FundSystematic greening of Ghana's taxes and dutiessystematic greening of public budgeting systems and expenditure frameworks

2. Waste management

programme area 5:

programme area 6:

Reform of plastic tax and product taxes as part of integrated waste recyclingEFR incentives for municipal waste management

3. Forestry programme area 7: Modifying revenue allocation of public timber sales and stumpage fees

4. Mining programme area 8:

programme area 9:

Royalties from registered small scale minersImport taxation of mining equipment and machinery

5. Transport programme area 10: Greening transport taxes and transport modes

6. Energy programme area 11:programme area 12:

Carbon dioxide TaxTax shift

7. Industry programme area 13: Industrial pollution taxes

Fiscal, Social &Environmental Fiscal, Social &Environmental Implications Implications

• Fiscal Implications:– Promote green and climate sensitive budgeting– Mobilization of resources (domestically and

internationally, public and private) to address environmental problems

– Reduced distortions– Reduced drain on public finance e.g. waste treatment cost,

reclamation/rehabilitation costs, health costs, etc.

• Social Implications:– The EFR policy provides for strategic direction and

coordination to achieve welfare gains for the entire society

– The policy promotes technological innovation, as well as the development and growth of green industries in Ghana and the creation of new employment in these industries

– Improve health of the people and longevity of life

Fiscal, Social & Env. Fiscal, Social & Env. Implications Contd. Implications Contd.

• Environmental implications:• The policy contributes to addressing the

following environmental challenges Ghana faces:– Deforestation, unsustainable forestry practices, including

related adverse effects, and protected areas development;

– Environmental pollution and degradation, including associated livelihood challenges, caused by small scale mining;

– Climate change mitigation and adaptation;– Inadequate waste management, including the

development of waste recycling and reuse industries based on separate waste collection, decreasing costs of current waste management systems;

– Unsustainable transport modes and related health and environmental impacts; and

– Education, research and awareness programmes related to all the above listed areas

– Inadequate funds for environmental agencies and investment

Implementation/Institutional Implementation/Institutional ArrangementsArrangements

A number of national institutions and private sector organizations in Ghana whose mandates/activities touch on environmental fiscal reform issues shall play key roles in ensuring successful implementation.

These institutions include the following:• Ministry of Environment, Science, Technology and Innovation• Ministry of Finance• Ministry of Lands & Natural Resources• Ministry of Local Government & Rural Development• Ministry of Energy & Petroleum• Ministry of Transport• Ministry of Health• Ministry of Education• Non-governmental / Civil Society Organizations; and• Private Sector

Role of political economy, Role of political economy, challenges and mitigationchallenges and mitigationThe policy has outlined the ff. as

critical to ensuring success:• Governance, coordination and

information• Capacity building and Education• Finance• International cooperation• Gender• Research and Development • Monitoring & Evaluation

ConclusionConclusionEFR is aimed at

◦Achieving welfare gains◦Employment creation (via creation of

green industries and green jobs) ◦Addressing important environmental

challenges in Ghana◦Mobilizing resources domestically and

internationally for sustainable development

◦Making the national budget green and climate change sensitive

THANK YOUTHANK YOU