Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/163524
Authors: 
Yalew, Amsalu W.
Hirte, Georg
Lotze-Campen, Hermann
Tscharaktschiew, Stefan
Year of Publication: 
2017
Series/Report no.: 
CEPIE Working Paper 11/17
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.
Subjects: 
climate change
agriculture
public adaptation
CGE model
Ethiopia
JEL: 
C68
D58
H50
H60
O55
Q16
Q28
Q54
Q56
Q58
R11
R13
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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