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The Impact of the Local Green Economy of Ghana: A General Equilibrium Analysis

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Listed:
  • Osei-Agyeman Yeboah

    (L. C. Cooper, Jr. International Trade Center, A-25 C.H. Moore Agricultural Research Facility, North Carolina A&T State University, Greensboro, NC 27411, USA)

  • Nicholas Mensah Amoah

    (Department of Agribusiness, Applied Economics and Agriscience Education, North Carolina A&T State University, Greensboro, NC 27411, USA)

  • Shaibu Fuseini

    (Societas Socialis (SOS) Children’s Villages, Nana Boakye Ansah Debrah Street, Adum-Kumasi P.O. Box KS 15280, Ghana)

  • Issah Sugri

    (Council of Scientific and Industrial Research, Savannah Agricultural Research Institute (SARI), Tamale P.O. Box TL 52, Ghana)

Abstract

The Ghanaian forestry sector has experienced a paradigm shift toward resilient and sustainable forest management practices through climate change mitigation and adaptation policies. Ghana has acknowledged the urgent need to address these issues via comprehensive policy measures as a nation that is vulnerable to the adverse effects of climate change. To assess economy-wide impacts, this paper employs a computable general equilibrium with a static specific factor model that can be readily simulated with various vectors of price changes. The model uses a competitive production structure that assumes constant returns, full employment, competitive pricing, and perfect labor mobility across sectors. Factor shares, industry shares, and substitution matrices from 2022 Labor Force Report’s data were constructed for four skilled groups (managers, professionals, service, and production) across industry, service, the rest of agriculture, and forestry sectors. Predictions of price increases from climate change mitigation policies compliance were simulated for the long run and short run. Forestry, agricultural, and industrial sectors will enjoy higher prices under a green economy, but these would not translate into higher wages. It is rather capital owners in agriculture and forestry that would benefit. Wage adjustments to the green economy are smaller than what might be expected in a partial equilibrium model.

Suggested Citation

  • Osei-Agyeman Yeboah & Nicholas Mensah Amoah & Shaibu Fuseini & Issah Sugri, 2023. "The Impact of the Local Green Economy of Ghana: A General Equilibrium Analysis," Sustainability, MDPI, vol. 15(23), pages 1-11, November.
    • Handle: RePEc:gam:jsusta:v:15:y:2023:i:23:p:16358-:d:1289268
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    References listed on IDEAS

    as
    1. Jones, Ronald W & Scheinkman, Jose A, 1977. "The Relevance of the Two-Sector Production Model in Trade Theory," Journal of Political Economy, University of Chicago Press, vol. 85(5), pages 909-935, October.
    2. Ronald W. Jones, 2018. "The Structure of Simple General Equilibrium Models," World Scientific Book Chapters, in: International Trade Theory and Competitive Models Features, Values, and Criticisms, chapter 4, pages 61-84, World Scientific Publishing Co. Pte. Ltd..
    3. Chang, Winston W, 1979. "Some Theorems of Trade and General Equilibrium with Many Goods and Factors," Econometrica, Econometric Society, vol. 47(3), pages 709-726, May.
    4. Mostafa Malki & Henry Thompson & Osei-Agyeman Yeboah, 2009. "A Specific Factor Model of FTAA and North Carolina Textile and Apparel Industries," International Economic Journal, Taylor & Francis Journals, vol. 23(2), pages 227-236.
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