- Country: Ethiopia
- Geographic Coverage: National
- Lead Local Agencies:
- Ministry of Environment and Forest (MEF)
- Ministry of Finance & Economic Development (MOFED)
- Prime Minister’s Office (PMO)
- Ethiopian Development Research Institute (EDRI)
- Ministry of Water Irrigation and Energy (MOWIE)
- Ministry of Agriculture (MOA)
- Ministry of Urban Development Housing and Construction (MUDHC)
- Ministry of Industry (MoI)
- Climate Resilient Green Economy (CRGE)
The Government of Ethiopia’s development goal is to eradicate poverty through broad based, equitable, and sustainable economic growth. Over the past decade, they have made substantial progress toward this goal through the Sustainable Development and Poverty Reduction Program (SDPRP), the Plan for Accelerated and Sustained Development to End Poverty (PASDEP), and the first phase of the Growth and Transformation Plan (GTP I). Ethiopia’s economy has grown rapidly and consistently, averaging 11% annual growth (real GDP) between 2003/04 and 2012/13. This growth has been accompanied by significant reductions in poverty.
The government’s growth plan aims to maintain double-digit growth rates to reach middle-income status by 2025 ($1,045 USD per capita). The core pillars of the strategy to achieve this are “growth”, that is rapid and sustained economic growth, and “transformation”, that is economic, labor and export transformation. This is not economic growth at any cost, but a development model that aims to benefit the poor as the economy grows; and to reinvest growth to drive poverty reduction.
Ethiopia has a highly variable climate and is also exposed to future climate change. Current and future climate variability pose risks to the planned growth and transformation pathway. In particular through:
1. Dependence on rainfed agriculture: this has a significant impact on agricultural performance.
2. Domestic food insecurity: livelihoods are highly climate dependent, so variability can impact household incomes and food security.
3. Rainfall dependent power sector: 95% of electricity is generated by hydropower and subject to significant fluctuation throughout the year. Rainfall has a major impact on generation capacity.
In addition, greenhouse gas emissions (GHGs) pose a long term economic liability and a low carbon growth pathway will be higher performance in the long-run because:
1. Low carbon growth has significant co-benefits: For example, renewable energy will increase energy independence and improve the balance of payments position. Early action to develop competitive, low-carbon industries will give Ethiopia first-mover advantage in new market sectors.
2. Carbon will become an economic drag: Carbon will increasingly be priced or regulated meaning that carbon intensive industries will lose competitiveness in future
3. Climate change requires collective action: By demonstrating that Ethiopia is a responsible global citizen and that green growth is not just possible, but preferable, we can stimulate global economic reform. In addition, we will be more likely to attract private and public climate finance.
In response to this set of challenges and opportunities, the Government launched the Climate Resilient Green Economy (CRGE) initiative, a commitment to grow to become a climate resilient middle-income country by 2025 with no net increase on greenhouse gas emissions. GGGI has supported the Government of Ethiopia to develop and implement the Climate Resilient Green Economy (CRGE) initiative. Launched in 2010, the CRGE vision is supported by a planning process (the Sectoral Reduction Mechanism) and financial mechanism (CRGE Facility) to deliver climate resilient green growth across the economy.
GGGI is supporting Ethiopia to develop the CRGE systems (SRM and CRGE Facility); integrate the CRGE into the national development plan (GTP II); and accelerate delivery of CRGE-relevant policies, programmes and projects across the economy. Our model is demand-led and responsive to government needs. To do this, our core team is embedded in the Ministry of Environment and Forest (MEF), the Ministry of Finance and Economic Development (MOFED) and the Ethiopian Development Research Institute (EDRI), supported by advisers in Ministry of Agriculture (MOA) and the Ministry of Water, Irrigation and Energy (MOWIE).
Watch the In-Country Views interview with Country Representative, Robert Mukiza:
Country Planning Framework