Abstract: This study uses the Ricardian approach to analyze the impact of climate change on Ethiopian agriculture and to describe farmer adaptations to varying environmental factors. The study analyzes data from 11 of the country's 18 agro-ecological zones, representing more than 74 percent of the country, and survey of 1,000 farmers from 50 districts. Regressing of net revenue on climate, household, and soil variables show that these variables have a significant impact on the farmers' net revenue per hectare. The study carries out a marginal impact analysis of increasing temperature and changing precipitation across the four seasons. In addition, it examines the impact of uniform climate scenarios on farmers' net revenue per hectare. Additionally, it analyzes the net revenue impact of predicted climate scenarios from three models for the years 2050 and 2100. In general, the results indicate that increasing temperature and decreasing precipitation are both damaging to Ethiopian agriculture. Although the analysis did not incorporate the carbon fertilization effect, the role of technology, or the change in prices for the future, significant information for policy-making can be extracted.

This study uses the Ricardian approach to analyze the impact of climate change on Ethiopian agriculture and to describe farmer adaptations to varying environmental factors. The study analyzes data from 11 of the country's 18 agro-ecological zones, representing more than 74 percent of the country, and survey of 1,000 farmers from 50 districts. Regressing of net revenue on climate, household, and soil variables show that these variables have a significant impact on the farmers' net revenue per hectare. The study carries out a marginal impact analysis of increasing temperature and changing precipitation across the four seasons. In addition, it examines the impact of uniform climate scenarios on farmers' net revenue per hectare. Additionally, it analyzes the net revenue impact of predicted climate scenarios from three models for the years 2050 and 2100. In general, the results indicate that increasing temperature and decreasing precipitation are both damaging to Ethiopian agriculture. Although the analysis did not incorporate the carbon fertilization effect, the role of technology, or the change in prices for the future, significant information for policy-making can be extracted.

In this paper, we analyze the economic impacts of response measures adopted in Ethiopia to curtail the spread of the COVID-19 pandemic. We carry out simulations using an economywide multiplier model based on a 2017 Social Accounting Matrix (SAM) for the country that properly depicts interactions between economic agents. The pandemic’s impact on the global economy combined with disruptions it causes in Ethiopia represents a large, unprecedented shock to the country’s economy. In such situations, a SAM-based multiplier model provides an ideal tool for measuring the short-term direct and indirect impacts of a shock on an economic system since there is limited room for proper adjustment of economic decisions. We model the seven-week partial lockdown policy implemented in Ethiopia from mid-March to early May 2020. We also consider two possible economic recovery scenarios that may emerge as the COVID-19 control policies are relaxed during the latter part of 2020 in order to generate insights on the potential continuing impact of the virus at the end of 2020. Although the country took early swift measures, our assessment of the partial lockdown measures suggests that they were not as strict as those observed in other Africa countries. Accordingly, our estimates of the economic costs of COVID-19 on Ethiopia are significantly lower than those reported for other countries on the continent. We estimate that during the lockdown period Ethiopia’s GDP suffered a 14 percent loss (43.5 billion Birr or 1.9 billion USD) compared to a no-COVID case over the same period. Nearly two-thirds of the losses were in the services sector. Although no direct restrictions were imposed on the agriculture sector, which serves as the primary means of livelihood for most Ethiopians, the sector faced a 4.7 percent loss in output due to its linkages with the rest of the economy. Poor export performance due to a slowdown in global trade and restrictions on the transport sector also partly explain the decline in agricultural output. The broader agri-food system also was affected considerably because of its linkages with the rest of the economy. In terms of the welfare of Ethiopians, we estimate that the economic impacts during the lockdown caused 10.1 million additional people to fall below the poverty line. These findings have implications for better understanding the direct and indirect impacts of COVID-19 and for policy design during the recovery period to return Ethiopia’s economy to a normal growth trajectory and to protect the livelihoods of the most vulnerable in the process.

Amsalu Woldie Yalew attempts to address the direct and indirect economic effects of climate change, adaptation costs, and adaptation finance in developing countries with emphasis to Ethiopia using a static computable general equilibrium (CGE) model coupled with a regional module. The results show that the economy-wide effects of climate change are profound. Planned public adaptation that aims to fully neutralize climate change-induced agricultural productivity shocks may help to avert the aggregate effects but with residual effects. The results also indicate that structural change underpins climate-resilient development as it contributes to dampen the adverse consequences of climate change on aggregate GDP and households’ welfare.

Ethiopia, which is one of least developing country in the world, has able to prove the world the possibility of becoming one of middle income earning countries of the world, if the current economic performance sustainably continues. Although the country is economically improving, the main economic providing sector, agriculture is performed with obsolete technology and farming poverty is becoming a centre of concern. Besides the living poverty and stagnant technologies, the country is one of the nations where people are highly exposed to climate change and environmental degradations. Climate change is observed to repeatedly taking away invaluable economic outputs, mainly agricultural activities, at least once in every 10 years. Having observed severe consequences of climate change on main economic activity, the researcher is inclined to measure the extent of economic loss created by climate simulation scenarios. For this purpose, the researcher has adopted dynamic computable general equilibrium model. In order to measure the impact of climate change on overall economic activities of the country and more specifically on agriculture, the researcher has shocked total factor productivity of its respective initial value using the elasticity value of production activities attributable by climate change simulation scenarios. Five non overlapping climate simulations are developed based on the values of climate change model (and values from series of research on emission scenarios) prediction. The result then is compared against the initial and baseline values to measure the extent of economic loss created by each hypothesized climate change occurrences in future. The study revealed that the long run impact of climate change is terrible unless strong clean resilient green economic counter policies are implemented. Climate change has horrifying impact especially to those people living in pastoralist and drought prone areas. The poor and less skilled labourers are adversely affected by each climate change simulation scenarios. Cereal crop and livestock production are also comparatively more affected by climate change in Ethiopia. If climate change happens as predicted, the economy is projected to lose 5%-10% of its value relative to baseline values per annum and in long run this value could further be tripled.

This study deals with three interrelated problems. First, it pursues the quest for local knowledge to understand climate variability and change at local levels. Due to controversies, uncertainties, skepticism and embedded economic and political interests in the climate change discourse, effective world collective action is more likely to delay for quite some time to come. Moreover, as climate change discourse remains very weak at engaging local knowledge, policies that emanate from the discourse might be less responsive to local climate problems both in terms of policy ingredients and time frame. So, having highlighting the paramount importance of local knowledge, this study documents and critically analyzes this knowledge system among subsistence farmers in Ethiopia. Secondly, it analyzes the economic impacts of climate variability and change and adaptation through quantitative methods with a special focus on crop production. Finally, it analyzes the factors that influence adaptive behavior. In so doing, it challenges the traditional approach of adaptation research and brings in a conceptual framework borrowed from psychosocial theory and empirically tests the approach in explaining adaptive behavior of farmers.