Two factors critical to assuring food security, whether at the local or the global level, are increasing crop productivity and increasing access to sustainable water supplies. These factors are also vital to the economic success of agriculture, which is particularly important in Ethiopia given that the sector accounts for about 41 percent of the country’s gross domestic product (GDP), produces 80 percent of its exports, employs 80 percent of the labor force, and is a major source of income and subsistence for the nation’s poor.
Extreme hydrological variability and seasonality have constrained Ethiopia’s past economic development by negatively affecting crop production—chiefly through droughts—and by destroying roads and other infrastructure due to flooding. As climate change unfolds, average climatic variables will shift, and weather variability will intensify, exposing Ethiopian agriculture to higher levels of risk and jeopardizing economic growth, food security, and poverty reduction. Most of the studies that have helped clarify the strong relationship between climate variability and Ethiopia’s GDP have been based on historical data, but future projections of climatic changes are critical to our understanding of the evolution of hydrological conditions in Ethiopia and our ability to extrapolate their associated effects on economic growth.
This brief is based on a paper that models the effects of three climate change–driven factors on the Ethiopian agricultural sector and overall economy. The model investigates the economic impact of water constraints on rainfed food production, changes in CO2 fertilization due to increased atmospheric CO2, and losses due to floods.