Full Length Research Paper

Environmental effects associated with the depletion of timber stocks in Ghana

William Angko

Department of Banking and Finance, School of Business and Law, University for Development Studies, Wa Campus, Box UPW 36, Wa.

E-mail: angwillie@gmail.com or wangko@uds.edu.gh

Accepted October 21, 2013

Abstract

Economic activity in Ghana is largely dependent on the natural resource base. The wrongful perception that natural resources are unlimited in supply has encouraged a massive exploitation and uncontrolled use of these resources. As a result, forests are being depleted at rates that raise concern, water bodies have become polluted and the stock of aquatic life is deteriorating amongst others. Despite the fact that natural resources are used in the generation of output, the current system of accounting for the level of output in Ghana and other developing countries fails to incorporate an element that will capture the depletion of these resources and the associated environmental degradation cost. A failure to capture fully environmental effects into the broader macroeconomic framework will make it difficult for Ghana to ascertain the extent to which her natural resource base is being used in the generation of output. Bearing in mind that disinvestment in natural capital cannot be sustained indefinitely, it is, imperative that the conventional account of Ghana is adjusted for environmental effects, (that is, an environmentally adjusted GDP). The study sort to account for some environmental effects associated with the depletion of timber stocks. This adjustment will generate a measure of GDP that is sustainable and would go a long way to help achieve the objectives of the Ghana Vision 2020 programme as well as the Millennium Development Goals (MDG). An economic and environmental accounting framework will help formulate an effective planning mechanism and appropriate policies to facilitate the sustainable use of our resources.

Keywords: Natural Resource accounting, Environmental Effects, Forest resource base, depletion