Climate Change, Agriculture, and Economic Development in Ethiopia

Amsalu Woldie Yalew, Georg Hirte (), Hermann Lotze-Campen and Stefan Tscharaktschiew
Additional contact information
Hermann Lotze-Campen: Potsdam Institute for Climate Impact Research (PIK), Member of the Leibniz Association, P.O. Box 601203, 14412 Potsdam, Germany
Stefan Tscharaktschiew: Institute of Transport and Economics, Technische Universität Dresden, 01062 Dresden, Germany

Sustainability, 2018, vol. 10, issue 10, 1-23

Abstract: Quantifying the economic effects of climate change is a crucial step for planning adaptation in developing countries. This study assesses the economy-wide and regional effects of climate change-induced productivity and labor supply shocks in Ethiopian agriculture. We pursue a structural approach that blends biophysical and economic models. We consider different crop yield projections and add a regionalization to the country-wide CGE results. The study shows, in the worst case scenario, the effects on country-wide GDP may add up to −8%. The effects on regional value-added GDP are uneven and range from −10% to +2.5%. However, plausible cost-free exogenous structural change scenarios in labor skills and marketing margins may offset about 20–30% of these general equilibrium effects. As such, the ongoing structural transformation in the country may underpin the resilience of the economy to climate change. This can be regarded as a co-benefit of structural change in the country. Nevertheless, given the role of the sector in the current economic structure and the potency of the projected biophysical impacts, adaptation in agriculture is imperative. Otherwise, climate change may make rural livelihoods unpredictable and strain the country’s economic progress.

Keywords: climate change; agriculture; migration; structural change; CGE model; Ethiopia (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

Downloads: (external link)
https://www.mdpi.com/2071-1050/10/10/3464/pdf (application/pdf)
https://www.mdpi.com/2071-1050/10/10/3464/ (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:gam:jsusta:v:10:y:2018:i:10:p:3464-:d:172567

Access Statistics for this article

Sustainability is currently edited by Ms. Alexandra Wu

More articles in Sustainability from MDPI
Bibliographic data for series maintained by MDPI Indexing Manager ().