Evaluating the Economic Impact and Food Security Implications of Climate Change in Ethiopia: An Economy-wide Analysis

Abstract

The impact of climate change on Ethiopian agriculture and overall economy, as well as its implications on food security, is evaluated using a multi-country, multi-sector computable general equilibrium (CGE) model. The analysis employs the GTAP 10 Database and the GTAP-W model that differentiates between rainfed and irrigated agriculture. The economy-wide impact of climate change in 2050 is evaluated for two global emissions scenarios (A1 and B1), each from two global circulation models (GCMs) (CSIRO and MIROC). The results reveal that climate change induces a significant decline in agricultural production, resulting in a surge in market prices of crops. Climate change also depresses economic growth and results in substantial welfare loss. Moreover, the findings of the study reveal that climate change worsens the already grave food security situation in the country through its adverse effect on the ‘food availability’ and ‘access to food’ dimensions of food security. Therefore, government policy needs to be geared towards supporting adaptation to climate change in the country through the provision of access to credit, land, and climate information.