General equilibrium effects of public adaptation in agriculture in LDCs: Evidence from Ethiopia

Amsalu Woldie Yalew, Georg Hirte (), Hermann Lotze-Campen and Stefan Tscharaktschiew

No 11/17, CEPIE Working Papers from Technische Universität Dresden, Center of Public and International Economics (CEPIE)

Abstract: Ethiopia is one of the most vulnerable countries to climate change. This is because its important economic sector, agriculture, is virtually rain-fed. The role of the sector in the current economic structure and the potency of the anticipated biophysical impacts of climate change necessitates proactive adaptation in agriculture. This, however, breeds questions of adaptation costs and adaptation finance. This study attempts to derive plausible range of planned adaptation costs in agriculture along with their economy-wide and regional effects in Ethiopia. It also assess the economy-wide and regional effects of the likely options available to a government of a least-developed country to finance adaptation in agriculture. The results show that planned public adaptation in agriculture puts pressure on government surplus, impedes on manufacturing and private services, and GDP of urbanized regions. As such, it may strain the current macroeconomic endeavors of the country which puts government driven structural transformation and reducing fiscal deficit relative to GDP at the center. Government of Ethiopia may reconcile this by laying out incentives to urban agriculture and private investment in agriculture. Besides, foreign support in the form of biotechnology transfer and debt-relief may help to control the side effects of grants on foreign exchange market and trade balance.

Keywords: climate change; agriculture; public adaptation; CGE model; Ethiopia (search for similar items in EconPapers)
JEL-codes: C68 D58 H50 H60 O55 Q16 Q28 Q54 Q56 Q58 R11 R13 (search for similar items in EconPapers)
Date: 2017
New Economics Papers: this item is included in nep-agr and nep-env
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
https://www.econstor.eu/bitstream/10419/163524/1/894604406.pdf (application/pdf)

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:zbw:tudcep:1117

Access Statistics for this paper

More papers in CEPIE Working Papers from Technische Universität Dresden, Center of Public and International Economics (CEPIE) Contact information at EDIRC.
Bibliographic data for series maintained by ZBW - Leibniz Information Centre for Economics ().