25 June 2015

Ethiopia: Country's Green Economy - Making Sustainable Development a Reality


Ethiopia is one of the fastest growing economies in Africa and in the world. It aspires to become a middle-income country by 2025 without increasing its net greenhouse gas emissions and protecting itself against the negative impacts of climate change. Ethiopia has long recognized the link between environmental concerns and economic development.

The country has historically been prone to extreme whether events. High rainfall variability causes droughts and floods on an almost annual basis, with severe consequences for the country's economy and people. No doubt, the social and economic costs arising from climate variation and climate extremes are significant, and expected to become even more severe under climate change. If no adaptation measures are taken, climate change may reduce Ethiopia's GDP by as much as 2.5 per cent per year by 2050.

The government of Ethiopia, therefore, recognizes the importance of designing development policies with a view to mitigate the impacts of climate change. For Ethiopia, green growth is a necessity as well as an opportunity to be seized. It is an opportunity to realize the country's huge potential in renewable energy and a necessity so as to arrest agro-ecological degradation that threatens the lives of its citizens.

Against this backdrop, in the Growth and Transformation Plan (GTP) the issue of sustainable development has been given much emphasis. Moreover, the seven strategic pillars of the GTP deal with sustaining rapid and broad based economic growth. Hence, the government launched the Ethiopia's Climate Resilient Green Economy (CRGE) Facility in August 2012 to ensure sustainable and environmentally friendly economic growth.

Ethiopia's emission of CO2 is insignificant compared to the developed nations. Needless to say, climate is a major environmental resource that affects nearly all human activities. Ethiopia's contribution to the increased concentration of greenhouse gases in the atmosphere is negligible. But it is highly sensitive to climate change and variability. It has large arid and semi-arid areas as well as development sectors which have already suffered much from the vagaries of climatic variations and are likely to suffer seriously due to the occurrence of a shift in climate.

Thus, the adverse impact of climate change has the potential of hampering the astounding socio-economic development already gained. The impact in climate change is inevitable for at least the next few centuries. Therefore, the formulation and implementation of a climate change adaptation programme is a must for this economically emerging country. Thus, recognising the close links between environmental and development concerns, Ethiopia has been working to integrate climate considerations into its broader development planning processes.

The Ethiopian Climate Resilient Green Economy (CRGE) initiative, which was launched in late 2011, laid the foundation for integrated planning for climate-resilient development. The CRGE initiative aims to "climate-proof" its national development plan goals so as to stabilise its net greenhouse gas emission while building resilience against current climate risks and future climate change. In due time, it aims to go beyond climate-proofing, to fully align its green growth and climate resilience objectives with its future national development plans. The CRGE initiative led to establishment of new institutions, new efforts in capacity building and financial resource mobilization and triggered comprehensive climate risk and vulnerability analyses.

The country's decision to develop a strategic, national-level response to climate change has been triggered by a strong awareness about climate risks and strong political leadership. The historically high exposure to climate variability has created strong awareness about current and future climate impacts in Ethiopia. The CRGE process builds on Ethiopia's five-year national development plan, with a view to ensuring that Ethiopia's development targets are achieved in a low-carbon and climate resilient manner. The CRGE's three key objectives are fostering growth and economic development; managing greenhouse gas emissions and improving resilience to climate change. This marks a significant shift in the nation's climate change policy, lifting both climate change mitigation and adaptation from the environmental to a cross-governmental sphere. To fully mainstream climate resilience and green growth into development planning, the government aims to incorporate the CRGE into its next national development plan, which will cover the period 2015- 2020.

The CRGE consists of four elements which, once finalized, are intended to build a comprehensive national framework for Ethiopia's climate change mitigation and adaptation policy. These elements include: the development of a national vision, laying out the key objectives and long-term development goals; the development of a national strategy, outlining concrete steps for both climate change adaptation and mitigation; the establishment of an institutional climate change system to facilitate cross-governmental co-operation and planning linkages; and the establishment of financial and capacity-building mechanisms to support the implementation of the national CRGE strategy.

No doubt, linking climate change and development planning requires close co-ordination and co-operation across ministries and levels of government. In recognition of this, the government has worked to establish a new institutional set-up for effective development and implementation of the CRGE. The concrete design of this structure has evolved significantly since the CRGE launch in 2011, in response to administrative, coordinative or technical needs as they became apparent.

The changing nature of the CRGE's institutional framework reflects the novelty of climate-resilient development planning and points to the need to adopting a flexible, 'learn-by-doing' approach. To spur the development of the CRGE strategy in early 2011, Ethiopia has put in place a new institutional system. The Environmental Council, chaired by the Prime Minister Office and comprising members from federal ministries, presidents of regional states, and private sector and civil society representatives provides overall oversight and responsibility the realization of the CRGE Vision.

A new body, the CRGE Inter-Ministerial Committee, was established to directly oversee and guide the process to ensure overall policy coherence and alignment to existing government structures. The CRGE Inter-Ministerial Committee is composed of high-level representatives from line ministries and chaired by the Prime Minister's Office, which provides a direct link to Ethiopia's key national planning institution. Line Ministries have also established CRGE units, with overall responsibility of coordinating and facilitating the planning and implementation of sectoral CRGE strategies. The government furthermore has upgraded the Ethiopian Environmental Protection Agency to obtain ministerial status with enhanced role of coordinating the realization of the CRGE Vision.

Finance is one of the three constraints, in addition to technology and capacity, which can pose a major challenge to effectively implement the CRGE. Preliminary estimates indicate that building the green economy will alone require total expenditure of around 150 billion USD over the next 20 years, with around 80 billion USD required funding estimated to be capital investment and the remaining 70 USD billion assessed as being necessary to cover operating and programme expenses. Of course, Ethiopia has one of the lowest per capita rates of consumption of fossil fuel in the world. Its contribution to climate change is, therefore, negligible. And, compared to the rest of the world Ethiopia's contribution to atmospheric pollution that causes climate change has been negligible its impact is going to increase with the growth of industrialization.

Therefore, it should do all it can to avoid emissions of atmospheric pollutants and pursue a clean path of development. Ethiopia has been working to ensure sustainable and equitable economic development focusing on green economy. Therefore, the CRGE Facility is a very crucial mechanism in order to implement the green economy strategy which aims to achieve sustainable development with net-zero emission and building resilience.


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