Saving forests to mitigate climate change: What can microfinance contribute to the REDD+ policy process in Ghana?

Abstract

Deforestation is estimated to contribute to one-fifth of climate change. The idea of Reducing Emissions from Deforestation and forest Degradation (REDD+) has been promoted by UN Framework Convention on Climate Change (UNFCCC) to save tropical forest and mitigate climate change. In Ghana, deforestation is thought to have been driven largely by expansive cocoa production system. In view of this, the policy strategy of the Government has focused on improving cocoa productivity to reduce the expansive forms of agriculture into forest areas. This paper discusses the roles that microfinance can play in this effort. It draws on long-term research on microfinance and semi-structured interviews from hundred households in seven communities around the Kakum National Park in the Twifo Hemang Lower Denkyira District, Ghana. The paper finds that microfinance can enable smallholder farming communities to reduce deforestation in Ghana through at least three roles. These are (a) agricultural investment (b) technological adoption and (c) agribusiness skills development. Based on these findings, it is recommended that the project implementers   stand a better chance of achieving the project objective if they include microfinance elements into the programme. Given the centrality of REDD+ in the international effort of climate change mitigation, this research adds important insights into one of the ways through which the vision of halting, slowing and reversing trends of deforestation could be achieved in Ghana and elsewhere.

Keywords: microfinance, REDD+, climate change, Ghana, agriculture