Hostname: page-component-78c5997874-ndw9j Total loading time: 0 Render date: 2024-11-20T00:33:59.671Z Has data issue: false hasContentIssue false
  • English
  • Français

Climate change and the Ethiopian economy: a CGE analysis

Published online by Cambridge University Press:  05 June 2015

Zenebe Gebreegziabher ,
Jesper Stage Open the ORCID record for Jesper Stage [Opens in a new window] ,
Alemu Mekonnen  and
Atlaw Alemu
Zenebe Gebreegziabher
Affiliation:
Department of Economics, Mekelle University, Adi-Haqui Campus, P.O. Box 451, Mekelle, Tigrai, Ethiopia. Tel: + 251344410349. E-mail: [email protected]
Jesper Stage
Affiliation:
Department of Business Administration, Technology and Social Sciences, Luleå University of Technology and Department of Business, Economics and Law, Mid Sweden University, Sweden. E-mail: [email protected]
Alemu Mekonnen
Affiliation:
Department of Economics, Addis Ababa University, Ethiopia. E-mail: [email protected]
Atlaw Alemu
Affiliation:
Department of Economics, Addis Ababa University, Ethiopia. E-mail: [email protected]
Get access Rights & Permissions [Opens in a new window]

Abstract

The paper analyzes the economic impacts of climate change-induced fluctuations on the performance of Ethiopia's agriculture, using a countrywide computable general equilibrium (CGE) model. We model the impacts on agriculture using a Ricardian model, where current agricultural production is modelled as a function of temperature and precipitation, among other things, and where future agriculture is assumed to follow the same climate function. The effect of overall climate change is projected to be relatively benign until approximately 2030, but will become considerably worse thereafter. Our simulation results indicate that, over a 50-year period, the projected reduction in agricultural productivity may lead to reductions in average income of some 20 per cent compared with the outcome that would have prevailed in the absence of climate change. This indicates that adaptation policies – both government planned and those that ease autonomous adaptation by farmers – will be crucial for Ethiopia's future development.

Type
Research Article
Information
Environment and Development Economics , Volume 21 , Issue 2 , April 2016 , pp. 205 - 225
Copyright
Copyright © Cambridge University Press 2015 

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

REFERENCES

Adenew, B. (2006), ‘Effective aid for small farmers in sub-Saharan Africa: southern civil society perspectives’, [Available at] http://www.ccic.ca/_files/en/working_groups/003_food_2007-01_small_farmers_research_report_ethiopia.pdf.Google Scholar
Andersson, C., Mekonnen, A., and Stage, J. (2011), ‘Impacts of the productive safety net program in Ethiopia on livestock and tree holdings of rural households’, Journal of Development Economics 94(1): 119–126.Google Scholar
Antle, J. (2010), ‘Adaptation of agriculture and the food system to climate change’, RFF Policy Issues Series, Issue Brief No. 10-03, Resources for the Future, Washington, DC.Google Scholar
Arndt, C., Strzepeck, K., Tarp, F., Thurlow, J., Fant, C., and Wright, L. (2010), ‘Adapting to climate change: an integrated biophysical and economic assessment for Mozambique’, UNU-WIDER Working Paper Series No. 2010/101, UN University, World Institute of Development Economics Research, Helsinki.Google Scholar
Arndt, C., Robinson, S., and Willenbockel, D. (2011), ‘Ethiopia's growth prospects in a changing climate: a stochastic general equilibrium approach’, Global Environmental Change 21(2): 701–710.Google Scholar
Balassa, B. (1985), ‘Exports, policy choices, and economic growth in developing countries after the 1973 oil shock’, Journal of Development Economics 18(1): 23–35.CrossRefGoogle Scholar
Bezabih, M., Chambwera, M., and Stage, J. (2011), ‘Climate change and total factor productivity in the Tanzanian economy’, Climate Policy 11(6): 1289–1302.CrossRefGoogle Scholar
Boko, M., Niang, I., Nyong, A., Vogel, C., Githeko, A., Medany, M., Osman-Elasha, B., Tabo, R., and Yanda, P. (2007), ‘Climate change: impacts, adaptation and vulnerability: Contribution of Working Group II to the Fourth Assessment Report of the Intergovernmental Panel on Climate Change’, in Parry, M.L., Canziani, O.F., Palutikof, J.P., Van der Linden, P.J. and Hanson, E.E. (eds) Fourth Assessment Report of the Intergovernmental Panel on Climate Change, Cambridge: Cambridge University Press, pp. 433–467.Google Scholar
Dercon, S. (2009), ‘Innovations in insuring the poor: risk, poverty, and insurance’, IFPRI 2020 Vision, Focus 17, Brief 3, International Food Policy Research Institute, Washington, DC.Google Scholar
Deressa, T.T. (2007), ‘Measuring the economic impact of climate change on Ethiopian agriculture: Ricardian approach’, Policy Research Working Paper Series No. WPS 4342, World Bank, Washington, DC.Google Scholar
Deressa, T.T., and Hassan, R.M. (2009), ‘Economic impact of climate change on crop production in Ethiopia: evidence from cross-section measures’, Journal of African Economies 18(4): 529–554.Google Scholar
Deressa, T.T., Hassan, R.M., Alemu, T., Yesuf, M., and Ringler, C. (2008a), ‘Analyzing the determinants of farmers’ choice of adaptation methods and perceptions of climate change in the Nile Basin of Ethiopia', IFPRI Discussion Paper Series No. 00798, International Food Policy Research Institute, Washington, DC.Google Scholar
Deressa, T.T., Hassan, R.M., and Ringler, C. (2008b), ‘Measuring Ethiopian farmers’ vulnerability to climate change across regional states', IFPRI Discussion Paper Series No. 00806, International Food Policy Research Institute, Washington, DC.Google Scholar
Development Prospects Group (2008), A Country Study on the Economic Impacts of Climate Change, Ethiopia Report No. 46946-ET, Washington, DC: World Bank.Google Scholar
Easterly, W. (2006), Growth in Ethiopia: Retrospect and Prospect, New York: Center for Global Development, New York University.Google Scholar
Gebreegziabher, Z., Mekonnen, A., Deribe, R., Abera, S., and Kassahun, M.M. (2013), ‘Crop–livestock inter-linkages and climate change implications for Ethiopia's agriculture: a Ricardian approach’, RFF Discussion Paper Series No. EfD 13–14, Resources for the Future, Washington, DC.Google Scholar
Kates, R.W. (2000), ‘Cautionary tales: adaptation and the global poor’, Climatic Change 45(1): 5–17.Google Scholar
Kurukulasuriya, P. and Mendelsohn, R. (2006), ‘Crop selection: adapting to climate change in Africa’, CEEPA Discussion Paper Series No. 26, Centre for Environmental Economics and Policy in Africa (CEEPA), University of Pretoria, South Africa.Google Scholar
Kurukulasuriya, P., Mendelsohn, R., Hassan, R.M., et al. (2006), ‘Will African agriculture survive climate change?’, World Bank Economic Review 20(3): 367–388.CrossRefGoogle Scholar
Löfgren, H., Harris, R.L., Robinson, S., Thomas, M., and El-Said, M. (2002), A Standard Computable General Equilibrium (CGE) Model in GAMS, Washington, DC: International Food Policy Research Institute.Google Scholar
Mideksa, T.K. (2010), ‘Economic and distributional impacts of climate change: the case of Ethiopia’, Global Environmental Change 20(2): 278–286.Google Scholar
MoARD (Ministry of Agriculture and Rural Development) (2010), Ethiopia's Agriculture Sector Policy and Investment Framework (PIF) 2010–2020, Addis Ababa, Ethiopia.Google Scholar
Pattanayak, S.K., Ross, M.T., Depro, B.M., Bauch, S.C., Wendland, K.J., and Alger, K. (2009), ‘Climate change and conservation in Brazil: CGE evaluation of health and wealth impacts’, BE Journal of Economic Analysis and Policy 9(2): 1–42.Google Scholar
Reid, H., Sahlén, L., Stage, J., and MacGregor, J. (2008), ‘Climate change impacts on Namibia's natural resources and economy’, Climate Policy 8(5): 452–466.Google Scholar
Reilly, J. and Schimmelpfennig, D. (1999), ‘Agricultural impact assessment, vulnerability, and the scope for adaptation’, Climatic Change 43(3): 745–788.Google Scholar
Reilly, J.N., Baethgen, W., and Chege, F.E. (1996), ‘Agriculture in a changing climate: impacts and adaptations’, in Watson, R., Zinyowera, M., Moss, R. and Dokken, D. (eds), Climate Change 1995: Impacts, Adaptations, and Mitigation of Climate Change – Scientific-Technical Analyses, Cambridge: Cambridge University Press for the IPCC.Google Scholar
Robinson, S., Willenbockel, D., and Strzepek, K. (2012), ‘A dynamic general equilibrium analysis of adaptation to climate change in Ethiopia’, Review of Development Economics 16(3), 489–502.Google Scholar
Robinson, S., Strzepek, K., and Cervigni, R. (2013), ‘The cost of adapting to climate change in Ethiopia: sector-wise and macro-economic estimates’, Ethiopia Strategy Support Program Working Paper Series No. 53, International Food Policy Research Institute, Washington, DC.Google Scholar
Rosenzweig, C. and Parry, M.L. (1994), ‘Potential impact of climate change on world food supply’, Nature 367(6450): 133–138.Google Scholar
Sachs, J., Panatayou, T., and Peterson, A. (1999), ‘Developing countries and the control of climate change: a theoretical perspective and policy implications’, Consulting Assistance for Economic Reform II Discussion Paper Series No. 44, Harvard Institute for International Development, Cambridge, MA.Google Scholar
Seo, S.N. and Mendelsohn, R. (2008a), ‘Measuring impacts and adaptations to climate change: a structural Ricardian model of African livestock management’, Agricultural Economics 38(1): 1–15.Google Scholar
Seo, S.N. and Mendelsohn, R. (2008b), ‘Climate change impacts and adaptations on animal husbandry in Africa’, African Journal of Agriculture and Resource Economics 2(1): 65–82.Google Scholar
Seo, S.N., Mendelsohn, R., Dinar, A., Hassan, R.M., and Kurukulasuriya, P. (2009), ‘A Ricardian analysis of the distribution of climate change impacts on agriculture across agro-ecological zones in Africa’, Environmental and Resource Economics 43(3): 313–332.Google Scholar
Stage, J. (2010), ‘Economic valuation of climate change adaptation in developing countries’, Annals of the New York Academy of Sciences 1185(1): 150–163.Google Scholar
Stern, N. (2008), ‘Richard T. Ely Lecture: the economics of climate change’, American Economic Review 98(2): 1–37.Google Scholar
Strzepek, K. and McCluskey, A. (2007), ‘The impacts of climate change on regional water resources and agriculture in Africa’, World Bank Policy Research Working Paper Series No. 4290, World Bank, Washington, DC.Google Scholar
Tebekew, T., Amoge, A., Teferra, B., et al. (2009), Ethiopia Input Output Table and Social Accounting Matrix 2005/06, Unpublished manuscript, Ethiopian Development Research Institute, Addis Ababa, Ethiopia in collaboration with the Institute of Development Studies, University of Sussex.Google Scholar
Thurlow, J., Zhu, T., and Diao, X. (2009), ‘The impact of climate variability and change on economic growth and poverty in Zambia’, IFPRI Discussion Paper Series No. 00890, International Food Policy Research Institute, Washington, DC.Google Scholar
Nations, United (2009), ‘World population prospects: the 2008 revision’, [Available at] http://www.un.org/esa/population/publications/wpp2008/wpp2008_highlights.pdf.Google Scholar
Von Braun, J. and Webb, P. (1995), Famine and Food Security in Ethiopia: Lessons for Africa, Washington, DC: International Food Policy Research Institute.Google Scholar
Bank, World (2008), ‘Ethiopia: a country study on the economic impacts of climate change’, Environment and Natural Resource Management Report Series No. 46946-ET, World Bank Sustainable Development Department, Africa Region, Washington, DC.Google Scholar
Yesuf, M., DiFalco, S., Ringler, C., and Köhlin, G. (2008), ‘Impact of climate change and adaptation to climate change on food production in low-income countries: household survey data evidence from the Nile Basin of Ethiopia’, IFPRI Discussion Paper Series No. 00828, International Food Policy Research Institute, Washington, DC.Google Scholar
Zhai, F., Lin, T., and Byambdorj, E. (2009), ‘A general equilibrium analysis of the impact of climate change on agriculture in the People's Republic of China’, Asian Development Review 26(1): 206–225.Google Scholar
Supplementary material: PDF

Gebreegziabher supplementary material

Appendix

Download Gebreegziabher supplementary material(PDF)
PDF 41.5 KB