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Climate Change and the Ethiopian Economy: A Computable General Equilibrium Analysis

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  • Gebreegziabher, Zenebe
  • Stage, Jesper
  • Mekonnen, Alemu
  • Alemu, Atlaw

Abstract

This paper analyses the economic impacts of climate change on Ethiopia’s agriculture using a countrywide computable general equilibrium model. The impacts on agriculture are based on results from a Ricardian model where current (and future) agricultural production is analyzed as a function of temperature and precipitation. We project that the effect of overall climate change will be relatively benign until approximately 2030 and then worsen considerably. Our simulation results indicate that, over a 50-year period, the projected reduction in agricultural productivity may lead to 30 percent less average income, compared with the possible outcome in the absence of climate change. Autonomous adaptations that the farmers make and government policies in response will be crucial for Ethiopia’s future development.

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Bibliographic Info

Paper provided by Resources For the Future in its series Discussion Papers with number dp-11-09-efd.

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Date of creation: 14 Oct 2011
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Handle: RePEc:rff:dpaper:dp-11-09-efd

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Keywords: climate change; computable general equilibrium; agriculture; Ethiopia;

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  1. Seo, S. Niggol & Mendelsohn, Robert & Dinar, Ariel & Hassan, Rashid & Kurukulasuriya, Pradeep, 2008. "A ricardian analysis of the distribution of climate change impacts on agriculture across agro-ecological zones in Africa," Policy Research Working Paper Series 4599, The World Bank.
  2. Zhai, Fan & Lin, Tun & Byambadorj, Enerelt, 2009. "A general equilibrium analysis of the impact of climate change on agriculture in the People's Republic of China," MPRA Paper 21127, University Library of Munich, Germany.
  3. Balassa, Bela, 1985. "Exports, policy choices, and economic growth in developing countries after the 1973 oil shock," Journal of Development Economics, Elsevier, vol. 18(1), pages 23-35.
  4. Arndt, Channing & Strzepeck, Kenneth & Tarp, Finn & Thurlow, James & Fant, Charles & Wright, Len, 2010. "Adapting to Climate Change An Integrated Biophysical and Economic Assessment for Mozambique," Working Paper Series wp2010-101, World Institute for Development Economic Research (UNU-WIDER).
  5. S. Niggol Seo & Robert Mendelsohn, 2008. "Measuring impacts and adaptations to climate change: a structural Ricardian model of African livestock management-super-1," Agricultural Economics, International Association of Agricultural Economists, vol. 38(2), pages 151-165, 03.
  6. Deressa, Temesgen Tadesse, 2007. "Measuring the economic impact of climate change on Ethiopian agriculture : Ricardian approach," Policy Research Working Paper Series 4342, The World Bank.
  7. Pattanayak Subhrendu K. & Ross Martin T. & Depro Brooks M. & Bauch Simone C. & Timmins Christopher & Wendland Kelly J. & Alger Keith, 2009. "Climate Change and Conservation in Brazil: CGE Evaluation of Health and Wealth Impacts," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 9(2), pages 1-44, September.
  8. Thurlow, James & Zhu, Tingju & Diao, Xinshen, 2009. "The impact of climate variability and change on economic growth and poverty in Zambia:," IFPRI discussion papers 890, International Food Policy Research Institute (IFPRI).
  9. Temesgen Tadesse Deressa & Rashid M. Hassan, 2009. "Economic Impact of Climate Change on Crop Production in Ethiopia: Evidence from Cross-section Measures," Journal of African Economies, Centre for the Study of African Economies (CSAE), vol. 18(4), pages 529-554, August.
  10. Deressa, Temesgen & Hassan, R. M. & Alemu, Tekie & Yesuf, Mahmud & Ringler, Claudia, 2008. "Analyzing the determinants of farmers' choice of adaptation methods and perceptions of climate change in the Nile Basin of Ethiopia:," IFPRI discussion papers 798, International Food Policy Research Institute (IFPRI).
  11. Deressa, Temesgen & Hassan, Rashid M. & Ringler, Claudia, 2008. "Measuring Ethiopian farmers' vulnerability to climate change across regional states:," IFPRI discussion papers 806, International Food Policy Research Institute (IFPRI).
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