Climate change and Ethiopia

Climate change and Ethiopia
It is now widely recognized that developing countries—and in particular low-income countries in tropical and sub-tropical regions—will be sproportionately affected by the adverse impacts of climate change. This study modifies and extends a dynamic single country Computable General Equilibrium (CGE) model to include stochastic elements that are characteristic of climate change and a representation of the sectors that are most likely to be affected in order to evaluate potential adaptation policies.

The focus of the modeling is on stochastic elements in general and extreme events in particular. Surprisingly, this focus is relatively new in the economics of climate change. It follows on the work of Hope (2006), who developed the PAGE model. By placing risk and uncertainty at center stage, the PAGE model illustrates that the potential economic damages from climate change, and hence the potential gains from mitigation and effective adaptation, are much larger than had previously been estimated. As stated recently by Stern (2008, p. 18), "most studies prior to a year or two ago grossly underestimated damages from business as usual."

A failure to recognize the potential for significant damages as a result of rare events represented the primary source of this underestimation. When viewed through the optic of rare events, a fundamental challenge, if not the fundamental challenge, of the economics of climate change involves representing a highly uncertain future climate distribution. The approach employed here follows recent work by Weitzman (2007). He proves that
Bayesian updating of nonergodic systems causes rational agents to significantly thicken the tails of their subjective prior distributions of future outcomes. We employ information theory to preserve the information
content of past climate realizations while fattening the tails of the historical distribution in order to account for the implications of climate change. The magnitude of the shift is motivated by existing studies of Ethiopia and by the revealed behavior of investors in the development of subjective prior distributions concerning the evolution of the US economy. Both, but especially the latter, imply that rational decisionmakers should substantially increase the weight on relatively rare outcomes as compared with historical experience. Our case country, Ethiopia, is heavily dependent on rain-fed agriculture, and its geographical location and topography in combination with low adaptive capacity entail a high vulnerability to adverse impacts of climate change. In 2006/07, agricultural production generated around 46 percent of Ethiopia's
gross domestic product and employed 80 percent of the working population. Historically, there is a strong observable link between climate variations and overall economic performance. This is due to both direct impacts on agricultural sector performance and indirect links to other sectors of the economy. We find that expansion of variance on its own has a relatively minor impact on growth rates. If the future is like the past, but with just increased variation, the impact of climate shocks on average growth rates is modest. If the shocks become more negative, the impact is much more serious even if trend underlying growth in total factor productivity is maintained.

http://iopscience.iop.org/1755-1315/6/32/322009/pdf/1755-1315_6_32_322009.pdf

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Tags:

• Ethiopia
• ሞያሌ
• ድርቅ
• ዝናብ
• Climate
• change
• and

[levar1979]

...If by Climate Change, you mean the weather is sometimes unpredictable - I'd say yes, it is a problem. But if these people didn't have environmentalists and other NGOs lobbying to stop hydroelectric projects that will provide most of its citizens with electricity and easier access to water and irrigation, then maybe they won't have to be at the mercy of any change in climate.

[BikerVincennes]

Is 2010 the warmest of all time ? Are the research on my channel right or wrong ?