A Dynamic General Equilibrium Analysis of Adaptation to Climate Change in Ethiopia

Authors

  • Sherman Robinson,

    1. IFPRI, Washington DC, USA
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  • Dirk Willenbockel,

    1. Institute of Development Studies, University of Sussex, Brighton, UK
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  • Kenneth Strzepek

    Corresponding author
    1. Joint Program on the Science and Policy of Global Change, Massachusetts Institute of Technology, Cambridge, MA, USA
    • Willenbockel: Institute of Development Studies, University of Sussex, Brighton BN1 9RE, UK. Tel: +44-127-391-5700; Fax: +44-127-362-1202; E-mail: d.willenbockel@ids.ac.uk. Robinson: IFPRI, 2033 K St. NW; Washington DC 20006, USA. Strzepek: Joint Program on the Science and Policy of Global Change, Massachusetts Institute of Technology, 77 Massachusetts Ave, E19-411, Cambridge, MA 02139-4307, USA.

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Abstract

This study links a multisectoral, regionalized, dynamic, computable general equilibrium (CGE) model of Ethiopia with a system country-specific hydrology, crop, road, and hydropower engineering models to simulate the economic impacts of climate change scenarios from global circulation models (GCMs) to 2050. In the absence of externally funded, policy-driven adaptation investments, Ethiopia's GDP in 2050 will be up to 10% below the counterfactual no climate change (historical climate) baseline. Suitably designed adaptation investments could restore aggregate welfare to baseline levels at a cost that is substantially lower than the welfare losses as a result of climate change. Such investments, even if funded from domestic resources, have benefits that greatly exceed their costs, and are largely consistent with Ethiopia's long-run development strategy.

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