Alemayehu Derege
Published: 2019
Total Pages:
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Ethiopia, which is one of least developing country in the world, has able to prove the world the possibility of becoming one of middle income earning countries of the world, if the current economic performance sustainably continues. Although the country is economically improving, the main economic providing sector, agriculture is performed with obsolete technology and farming poverty is becoming a centre of concern. Besides the living poverty and stagnant technologies, the country is one of the nations where people are highly exposed to climate change and environmental degradations. Climate change is observed to repeatedly taking away invaluable economic outputs, mainly agricultural activities, at least once in every 10 years. Having observed severe consequences of climate change on main economic activity, the researcher is inclined to measure the extent of economic loss created by climate simulation scenarios. For this purpose, the researcher has adopted dynamic computable general equilibrium model. In order to measure the impact of climate change on overall economic activities of the country and more specifically on agriculture, the researcher has shocked total factor productivity of its respective initial value using the elasticity value of production activities attributable by climate change simulation scenarios. Five non overlapping climate simulations are developed based on the values of climate change model (and values from series of research on emission scenarios) prediction. The result then is compared against the initial and baseline values to measure the extent of economic loss created by each hypothesized climate change occurrences in future. The study revealed that the long run impact of climate change is terrible unless strong clean resilient green economic counter policies are implemented. Climate change has horrifying impact especially to those people living in pastoralist and drought prone areas. The poor and less skilled labourers are adversely affected by each climate change simulation scenarios. Cereal crop and livestock production are also comparatively more affected by climate change in Ethiopia. If climate change happens as predicted, the economy is projected to lose 5%-10% of its value relative to baseline values per annum and in long run this value could further be tripled.