Economic Implications Of Climate Change In Ethiopia A Computable General Equilibrium Analysis

Climate change has become one of the pressing problems worldwide as it affects socio-economicrnactivities - agriculture being one of the most vulnerable sectors. Specifically, this study hasrnattempted to evaluate the short-run economic impacts of climate change (change in the levels ofrntemperature and precipitation) with a focus on the Ethiopian economy. In so doing, it uses arncomputable general equilibrium model based on the 2005/06 Ethiopian Social AccountingrnMatrix. The results show that climate change has a dampening effect on economic growth andrnmany key macroeconomic indicators. Investment is the only macroeconomic variable thatrnincreases despite the changes in climate. It has also a negative impact on sectoral growth andrntrade, and the effect varies across agro-ecological zones. The findings further revealed thatrnhousehold livelihoods (measured in terms of income and welfare) have declined, and the effect isrnunevenly distributed across different household groups. The highest losses are likely to bernincurred by the poor households that are residing in smaller urban centers. Thus, the results ofrnthe study calls for improved climate adaptation actions to reduce both economic decline andrnwelfare deteriorations

Get Full Work

Report copyright infringement or plagiarism