Awash EthiopiaADDIS ABABA – August 24, 2016 – High levels of water vulnerability in Ethiopia’s Awash river basin pose risk to continued economic growth in Ethiopia, according to new report published by Vivid Economics on behalf of the Global Green Growth Institute.

The Awash basin is a critical region of Ethiopian agricultural production, and home to an estimated 15 million people.  However, the economy of the Awash basin is highly exposed to hydrological variability. Despite an overall abundant supply of water, the basin routinely suffers from localized water shortages at specific points in time, and is prone to destructive episodes of flood and drought.

The report, Water resources and extreme events in the Awash basin: economic effects and policy implications, seeks to better understand and quantify this critical economic vulnerability, as well as draw out the implications of this for water management policies.

The study examines scenarios where agricultural production is effected by water scarcity and extreme hydrological events, and calculates the economic impact to Ethiopia’s agricultural sector as well as the knock-on effects of reductions in the supply of agricultural produce in other sectors of the economy.

“Agriculture is the backbone of Ethiopia’s economy, and is a key driver of the country’s continuing development,” notes Robert Mukiza, GGGI Country Representative for Ethiopia. “Ensuring the appropriate water management policies are in place to sustain this economic engine is of critical importance.”

Awash report cover

Click image to view report

The study finds that a protracted drought could reduce GDP in the Awash basin by as much as 20% under current economic conditions.  As Ethiopia’s economy and population grows rapidly in the coming years, this economic vulnerability will become much more severe unless substantial policy changes are enacted to mitigate water vulnerability.

“The high levels of water vulnerability in the Awash basin translates in to a high value for water, and for the need to prioritize investments that will help mitigate water related risks in the basin,” says Oliver Walker of Vivid Economics. “Policies reflect this value by improving water allocation and investment decisions are therefore much needed.”

To mitigate this vulnerability, the report discusses the efforts of the Awash Basin Authority to improve data collection, forecast supply-demand balances, and develop tariff and permitting schemes for water abstraction and wastewater discharges.

While supporting these activities, the report also stresses the importance of quantifying the economic value of water. This can be used to quantify the costs and benefits of different programs and thereby improve decision making over water allocation and investment policies.

The report and its findings will be presented at World Water Week in Stockholm on August 29.

Read more here.

 

About GGGI

Based in Seoul, GGGI is an intergovernmental organization founded to support and promote green growth. The organization partners with countries to help them build economies that grow strongly, are more efficient and sustainable in the use of natural resources, less carbon intensive, and more resilient to climate change. GGGI works with countries around the world, building their capacity and working collaboratively on green growth policies that can impact the lives of millions. To learn more about GGGI, see http://www.gggi.org and visit us on Facebook and Twitter.

Awash report coverA new report prepared for the Global Green Growth Institute explores the economic impacts of water-related extreme events in Ethiopia’s Awash basin. The economy of the Awash basin is highly exposed to hydrological variability. Despite an apparently abundant supply of water in aggregate terms, the basin routinely suffers from localized water shortages at specific points in space and time, and is prone to destructive episodes of flood and drought.

The Water resources and extreme events in the Awash basin: economic effects and policy implications report, produced by Vivid Economics on behalf of GGGI, seeks to better understand and quantify this critical economic vulnerability, and draw out the implications of this for water management policies.

The report first analyses the sensitivity of the basin’s crop production to water scarcity and extreme hydrological events, before considering how these impacts transmit to other sectors. Crop output in the basin not only depends on the overall level of rainfall and incidence of flooding and drought, but is also sensitive to the timing of rains and their distribution across areas of the basin. As a consequence, large production losses are possible under a diverse range of plausible future climate scenarios: both where the level of rainfall decreases and where its distribution over space and time changes. The knock-on effects on other sectors in the economy tend to amplify these losses, as reductions in the supply of agricultural produce leading to a fall in productivity in other sectors.

Under current economic conditions, the report finds the consequences of hydrological variability to be severe. Plausible future hydrological conditions drawn from global climate models, applied to the Growth and Transition Planning period (GTP) from 2011-15, lead to swings in basin GDP of the order of 5-20%. Furthermore, as the economy is projected to grow sharply in coming years so is the degree of water scarcity. Unless rapid and very substantial policy changes are enacted to mitigate this sensitivity, these estimates will serve as lower bound estimates of future impacts.

High levels of vulnerability imply a high value of water – and thus a high priority for investments to reduce exposure in the basin. The Awash Basin Authority (AwBA) has a program to improve data collection, forecast supply-demand balances, and develop tariff and permitting schemes for water abstraction and wastewater discharges. The findings of this report provide strong support for all of these activities. However, a missing ingredient of its planning framework is an economic value of water, ideally at a temporally and geographically granular level, which can be used to quantify the costs and benefits of different programs and thereby improve decision making over water allocation and investment policies. This study shows that the gains from such improvements could be very large indeed.

Vivid Economics’ development of the report was supported by colleagues at Oxford University Centre for the Environment and local experts, including from Addis Ababa University and Water and Land Resource Centre.

Read the full report here.

Read the report annexes here.

Frank_Rijsberman 3SEOUL – August 22, 2016 – Dr. Frank Rijsberman, the former CEO of the Consultative Group for International Agricultural Research (CGIAR) Consortium, has been appointed as the Director-General of the Global Green Growth Institute (GGGI). Dr. Rijsberman will lead the Seoul-based international organization for a four-year term, beginning on October 1, 2016, succeeding Yvo de Boer.

“The opportunity to support developing countries to achieve their economic growth ambitions while reducing poverty and minimizing the environmental impact is inspiring and very motivating to me,” Dr. Rijsberman said. “While GGGI is a relatively young organization, it has already established a strong track record in laying the policy foundations for green growth, increasing green investment flows, and sharing its knowledge and experience with partner countries. I look forward to building on this success and driving the Institute’s work towards achieving its vision of a resilient world with strong, inclusive, and sustainable green growth.”

The appointment of Dr. Rijsberman became effective following the unanimous agreement by the GGGI Assembly, GGGI’s supreme organ. “On behalf of GGGI’s 26 Member countries, I warmly welcome Dr. Rijsberman to the Institute,” said H.E. Dr. Susilo Bambang Yudhoyono, President of the Assembly and Chair of the Council of GGGI. “We are confident that under Dr. Rijsberman’s leadership, GGGI will accelerate its Members’ transition to a new model of growth, aligned with their Nationally-Determined Contributions to the Paris Climate Agreement and the internationally-agreed Sustainable Development Goals.”

At CGIAR, Dr. Rijsberman led the Consortium’s transformation from 15 independent research centers towards a single integrated organization. This included a process of cultural and institutional change towards results-based management, including the development of the Consortium’s 2016-2030 Strategy and new portfolio of research programs for 2017-2022, building an integrated organization and governance structure, and developing its policies and procedures to ensure accountability.

Prior to leading CGIAR, Dr. Rijsberman was the first Director of Water, Sanitation, and Hygiene for the Bill and Melinda Gates Foundation, where he developed a strategy to help achieve universal access to sustainable sanitation services using radical new technologies and innovative market-based mechanisms. Dr. Rijsberman also has worked as Program Director at Google.org, the philanthropic arm of Google, where he led grant making in the public health initiative and was responsible for programs and partnerships in health, disaster response, geo-informatics, and climate-change adaptation. Before Google Dr. Rijsberman was Director-General of the International Water Management Institute, an international research institute with HQ in Colombo, Sri Lanka.

Originally from the Netherlands, Dr. Rijsberman received his bachelor’s and master’s degrees in civil engineering from Delft University of Technology, and earned a multi-disciplinary Ph.D. in water resources planning and management and civil engineering from Colorado State University.

About GGGI

Based in Seoul, GGGI is an intergovernmental organization founded to support and promote green growth. The organization partners with countries to help them build economies that grow strongly, are more efficient and sustainable in the use of natural resources, less carbon intensive, and more resilient to climate change. GGGI works with countries around the world, building their capacity and working collaboratively on green growth policies that can impact the lives of millions. To learn more about GGGI, see http://www.gggi.org and visit us on Facebook and Twitter.

By Steve Bass, First Senior Associate, IIED, Inhee Chung, Senior Sustainability and Safeguards Specialist, GGGI, and Thomas Nielsen, Advisor on Poverty Reduction and Social Inclusion, GGGI.

In December 2015, one of us was in Paris for the first working day after the historic climate change agreements. The Secretary General of the Organisation for Economic Co-operation and Development (OECD), Angel Gurria, had called a group together to “begin the task of changing economies so that they deliver on our climate agreements.” We asked ourselves, “How can we shift economies off their heavy use of the fossil fuels that cause damaging climate change, and encourage economic activities that help us to be resilient to at least a 2-degree temperature rise?”

The last few years have given us some experience to build on. The financial crisis of 2008 saw many governments wondering how to boost faltering economic growth, and to create more jobs. Some countries such as Germany, Denmark, and Korea responded with “green stimulus” packages.

They had noted that there was good business to be done in clean technology production and in installing efficient transport and energy infrastructure. They chose to focus their fiscal stimulation on the new “green goods and services” sector of the economy.

A new international institution, the Global Green Growth Institute (GGGI), was set up in Korea to extend this approach across many countries, and to help deliver growth that simultaneously address poverty reduction, job creation, social inclusion and environmental sustainability.

Indeed, many business and government leaders now recognize that high-carbon intensity and heavy use of natural resources are indicators of inefficiency.

In 2015 China, once known mainly for its very heavy pollution, became the world’s biggest solar technology and wind power producer. Bangladesh has been rolling out solar power for low-income groups. Germany and many Scandinavian countries are moving to economies powered by renewables. Even Saudi Arabia and the UAE aim to “wean the world off fossil fuels.”

While there are many “glimpses” of green growth and fine aspirations, there are also big blocks to significant progress. This is unsurprising since economies have been structured for decades around fossil fuels and big businesses liquidating natural resources to generate other physical and financial assets. Tax regimes still favor fossil fuels.

Financial rules still attract big capital to turn forests, rivers, and seas into commodities as fast as possible. What the governor of the Bank of England, Mark Carney, calls the “tragedy of short-term horizons” with daily stock-market pricing, no concern for the long term, and no regular inventory taken of our natural assets, means our economy is literally stealing from the future.

No wonder that six of the eight “biggest global risks” identified by the World Economic Forum in 2015 are connected environmental problems, poverty, and inequality.

This is why there is a growing movement to help countries remove the barriers to “green economies.” Five United Nations agencies have come together under the Partnership of Action for Green Economies (UNPAGE), to help governments analyze their economies and make improvements to policy and plans. Civil society organizations, as well as the UN, have joined up in the Green Economy Coalition (GEC), to explore what kinds of economy are needed in different countries sharing problems and ideas. Knowledge organizations have combined forces in the Green Growth Knowledge Platform (GGKP) to share information on technologies and policy instruments that work. Together, these offer the promise to put in place what has been missing in “sustainable development” for the last 40 years getting its economics right.

So what is all this work telling us a green economy should look like? My organization the International Institute for Environment and Development (IIED) and the Green Economy Coalition (GEC) have held dialogues in several developing countries, such as India, Brazil, Caribbean,
Ethiopia involving civil society, businesses, and government. It is remarkable that every dialogue revealed a common concern for:

  • Human wellbeing – green economies must create decent jobs and reduce poverty
  • Inclusion – green economies must not be owned only by big energy and infrastructure companies, a majority of the population must be able to take part and benefit
  • “Natural capital” – green economies will nurture the ‘green’ foundations of the economy by conserving soils, water, biodiversity, etc., and aim for their sustainable use Climate and ecological boundaries at the same time, green economies will not stress natural capital – taking care to get good information on it and respecting it in decisions
  • Economic growth – green economies will prioritize growth in the right places, in order to deliver above

The case for inclusion was strongly emphasized in all countries. Too many people have been failed by economic systems to date.

Cover photoGGGI together with IIED and GEC recently published a report called Pro-poor, Inclusive Green Growth, which demonstrates how well-planned green growth can also address some of the drivers of poverty and social exclusion. With a number of case studies, the report stresses the importance of strengthening institutions to promote inclusive green growth, which empowers poor women and men.

The test for greener approaches will be whether people are now better served by them by creating many new jobs at low establishment cost and with low (fossil fuel) energy use.

It will also depend on how well growth includes the informal economy the landless, and women with the resources they can access, i.e. natural capital and their own labor.

This all points to farming that makes good use of natural ecological cycling, organic manuring, and water-conserving agriculture. It points to formalizing informal activities into modern, decent jobs such as waste recycling that can compete with higher-cost corporate waste management companies.

If they embrace many people, green economy activities can benefit from the greater market size needed for rolling out small-scale solar energy, community sanitation schemes, and green construction.

No country yet has a perfect green economy plan. Some intend to “mainstream” green growth ideas into the current planning system: Zambia is shaping its 7th National Plan this way. Others know it will take a lot of learning and experimentation to get right: South Africa has a Green Economy Accord where government, business, and civil society agree to work together to evolve an approach. Germany has proven the importance of combining societal involvement with government leadership: Its Energiewende energy transition has enabled a massive shift away from fossil fuels through both government support and community ownership of renewable electricity production.

The Green Economy Coalition and Green Growth Knowledge Platform have catalogued many examples of green economic activity from all over the world.

There are renewable energy and “big data” revolutions led by progressive business. There is innovation and resilience in the informal economy, too. Policy instruments are emerging to scale up green approaches.

One example is asking environment and climate questions when public expenditure is being scrutinized. Another is environmental fiscal reform shifting taxes towards bad things like excessive fossil fuel and resource consumption and away from good things like people’s labor.
Micro-finance, micro-insurance and other financial mechanisms are spinning of, aimed at encouraging green asset classes and long-term public goods.

Many countries have recently made progress in “natural capital accounting” keeping track of the condition and use of forests, water, etc., alongside traditional national accounting. The challenge now is to bring all this together to build the integrated, inclusive institutions that will shape green economies and sustain the prosperity of people and nature.

This article is based on an article originally published in the Dhaka Tribune.