Ghana and Singapore partner to use blockchain technology to facilitate the trading of carbon credits.
Cementing Ghana’s Position as Africa’s Carbon Market Leader
Ghana’s Environmental Protection Agency (EPA) has entered into an agreement to add the country’s Ghana Carbon Registry (GCR) to a blockchain-based Internationally Transferred Mitigation Outcomes (ITMO) network. This follows an initial agreement between the two parties to operationalize the digital trading and settlement of ITMOs.
Governed under Article 6.2 of the Paris Agreement, ITMOs are a form of carbon credit used to incentivize climate action and contribute to global efforts to mitigate climate change. They can be transferred internationally and used to generate climate finance for climate mitigation and adaptation projects.
By operationalizing ITMOs, Ghana strengthens its position as a leader in Africa’s carbon markets. Simultaneously, the agreement between the GCR and Singapore’s ZERO13 helps the Southeast Asia nation maintain its status as a global hub for carbon credit trading.
John Kingsley Krugu, Executive Director of the EPA, commented:
“With the work EPA and other bodies in Ghana have been doing, the country has shown it can be a pioneer in making Article 6.2-related ITMO activity a reality under its implementation agreement with Singapore.”
As part of the arrangement, Singaporean companies will be able to secure high-quality carbon credits from Ghanaian projects, helping them meet their emissions reduction targets. Hirander Misra, CEO of Zero13, praised GCR’s collaboration with his company, saying it demonstrates how technology can play a crucial role in advancing climate action.
This agreement between Singapore and Ghana sets a precedent for international collaboration on carbon markets and climate action.
While hailed for offering a promising mechanism for international climate cooperation, ITMOs have several drawbacks including the risk of double counting, the lack of standardized methodologies as well as market volatility and price uncertainty. To overcome these challenges, countries must agree on and implement robust international governance, transparent accounting, and rigorous verification processes.
