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With a GDP of US$41.61 billion in 2012, Ethiopia has sustained a high and impressive growth rate in the last decade and is on track to achieving middle-income status by 2025.
A sizeable proportion of the GDP is associated with climate sensitive activities. For example, agriculture contributes 45% to the GDP. Approximately 83% of the population relies directly on agriculture for their livelihoods, with many more dependent on agriculture-related activities. Agriculture is predominantly rain-fed and vulnerable to the impacts of climate change and extreme weather events. Climate change induced damages are projected to result in a 2-10% loss of GDP by 2045 relative to baseline growth. With a relatively low capacity to absorb the shocks of extreme weather events, Ethiopia is at risk of losing out on the gains it has made through its remarkable economic growth. The recent report on ‘The geography of poverty, disasters and climate change’ ranks Ethiopia as the 11th country most at risk of disaster induced poverty.
In addition to the challenges posed by climate change, a number of development opportunities are emerging in response to climate policy.
Ethiopia has adopted a Climate Resilient Green Economy Strategy (CRGE) to keep its development objectives on track in the context of a changing climate. The government is designing an impressive portfolio of public policy responses to address climate change and capitalise on the opportunities provided by climate change policies, like access to climate finance and technology.
This paper provides a baseline assessment of public policy responses in Ethiopia with a focus on outlining the evolution of responses within policy, institutional and financial frameworks and key development programmes. It will assist policymakers in taking stock and reflecting on progress, as public policy responses are refined and implemented.