Ethiopia - A Country Study on the Economic Impacts of Climate Change
2008
World Bank
It is now widely recognized that low-income countries in tropical and sub-tropical regions will be disproportionally affected by the adverse impacts of climate change. The combination of already fragile environments, dominance of climate-sensitive sectors in economic activity, and low autonomous adaptive capacity in these regions implies a high vulnerability to the harmful effects of global warming on agricultural production and food security, water resources, human health, physical infrastructure and ecosystems. Recent authoritative scientific assessments emphasize that, even under the most optimistic assumptions about the success of future global mitigation action, an acceleration of adaptation efforts in developing countries over the next decades is essential to build resilience and reduce damage costs. The effects of climate change vary across countries, and adaptation and coping capabilities are influenced by geographical, economic, cultural and political factors. Successful adaptation programs must therefore take into account country-specific circumstances. This pilot study aims to develop a methodology that provides an economy-wide framework for analyzing economic impacts from climate change and potential adaptation policies that developing countries might undertake in the near and long term. To accomplish this objective, the paper modifies and extends a dynamic, single-country prototype 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.
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