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Grand Ethiopian Renaissance Dam: A Global CGE Model to Assess the Economic Effects on the Ethiopian Economy

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  • Ferrari, Emanuele
  • McDonald, Scott
  • Osman, Rehab

Abstract

The Grand Ethiopian Renaissance DAM (GERD) will become the largest dam and hydroelectric scheme in Africa; it is also one of the world’s most controversial dam projects and one of four large scale hydropower projects currently under construction in Ethiopia. Ethiopia’s endowment of water resources, with its 12 major river basins, is impressive but its potential to exploit is scarcely developed (AQUASTAT, 2005). It is estimated that over 85% of the Nile waters and sediment reaching Egypt originate from the Ethiopian highlands. Nevertheless the 1959 Nile Waters Treaty, between Egypt and Sudan, allocated well over 95% of the estimated available Nile waters to Egypt (75%) and Sudan (25%) thereby leaving very little to the other 8 states in the Nile basin. This study uses a variant of the GLOBE_EN, extended by segmenting the electricity generating sector between hydro and fossil fuel powered electricity generating sections in Ethiopia, Egypt and Rest of Eastern Africa (that includes Sudan). The simulations are conducted using the recursive dynamic variant of the GLOBE_EN model. Preliminary results indicate that GERD investments would slow down development in Ethiopia and that the exports of hydroelectricity need to expand rapidly straight after the completion of GERD if the project is to be successful.

Suggested Citation

  • Ferrari, Emanuele & McDonald, Scott & Osman, Rehab, 2013. "Grand Ethiopian Renaissance Dam: A Global CGE Model to Assess the Economic Effects on the Ethiopian Economy," Conference papers 332370, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    • Handle: RePEc:ags:pugtwp:332370
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    File URL: https://ageconsearch.umn.edu/record/332370/files/6331.pdf
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    References listed on IDEAS

    as
    1. Scott McDonald & Sherman Robinson & Karen Thierfelder, 2007. "Globe: A SAM Based Global CGE Model using GTAP Data," Departmental Working Papers 14, United States Naval Academy Department of Economics.
    2. World Bank, 2010. "Economics of Adaptation to Climate Change: Ethiopia, Volume 2. Annexes," World Bank Publications - Reports 13214, The World Bank Group.
    3. Ermias Engida & Eyasu Tsehaye & Seneshaw Tamru, 2011. "Does Electricity Supply Strategy Matter? Shortage and Investment:Reflections based on CGE Analysis," Working Papers 006, Policy Studies Institute.
    4. Strzepek, Kenneth M. & Yohe, Gary W. & Tol, Richard S.J. & Rosegrant, Mark W., 2008. "The value of the high Aswan Dam to the Egyptian economy," Ecological Economics, Elsevier, vol. 66(1), pages 117-126, May.
    5. Burniaux, Jean-Marc & Truong Truong, 2002. "GTAP-E: An Energy-Environmental Version of the GTAP Model," GTAP Technical Papers 923, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University.
    6. Burniaux, Jean-March & Truong, Truong P., 2002. "Gtap-E: An Energy-Environmental Version Of The Gtap Model," Technical Papers 28705, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    7. Sherman Robinson & Dirk Willenbockel & Kenneth Strzepek, 2012. "A Dynamic General Equilibrium Analysis of Adaptation to Climate Change in Ethiopia," Review of Development Economics, Wiley Blackwell, vol. 16(3), pages 489-502, August.
    8. World Bank, 2010. "Economics of Adaptation to Climate Change : Ethiopia," World Bank Publications - Reports 12504, The World Bank Group.
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