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Green economy strategies and implementation plan in
developing countries: The case of Ethiopia
Alemu MekonnenDepartment of Economics at Addis Ababa University and EfD
Ethiopia at Ethiopian Development Research InstitutePrepared for
Development Talks on “After Rio+20: Next steps towards inclusive green growth”, organized by Sida
17 September 2012, Stockholm
Introduction
• Ethiopia one of the three fastest growing economies in Africa recently (AfDB 2012)
• Annual growth 11-14.9% until 2015 (Ethiopia’s Growth and Transformation Plan (GTP) 2010/11-2014/15)
• => May not be sustainable if environmental and social issues not addressed
Ethiopia active on climate change
– Involvement in global climate negotiations and committees
– Plans/programs/documents at national level: 1st National Communications, NAPA, NAMA
– Green economy (GE) strategy launched in 2011 - part of Climate Resilient Green Economy strategy
GE strategy process• Preparation of GE Strategy started in 2010; help from
international & national consultants
• Inter-ministerial committee provided guidance to a technical committee (7 sub-technical committees)
• +20 government institutions represented, +50 experts
• 7 sectors selected: power, buildings & cities, forestry, agric. /soil based emissions, livestock, transport & industry
GE strategy process (2)
• 60 prioritized GE initiatives
• Prioritization Criteria :– relevance, feasibility for local implementation;– contribution to reach targets of GTP; – abatement potential at reasonable cost for the
respective sectors
• Regional, sectoral consultations; Structure of permanent institutional setup
GE strategy based on 4 pillars:
1. Improved crop and livestock production, and reduced emissions
2. Protect & re-establish forests3. Expand electricity generation from
renewables4. Leapfrog to modern, energy-efficient
technologies in transport, industry & buildings
The work done
Identification of current & projected GHG emissions under business as usual (BAU) scenarios until 2030,
Identification of drivers and abatement levers in the 7 sectors,
Estimation of mitigation costs, identification of financial needs and ways of financing these,
The way forward
Projections:
Sectoral shares (%)
Sector 2010 2025
Agriculture 42 29
Industry 13 32
Services 45 39
Rapid increase in GHG emissions
- if nothing done
Sectoral distribution (Mt of CO2e)
5 55 10540
5
70
55
90
75
185
2010 2030
Agriculture (4.4%)
Forestry (2.6%)
Industry (15.7%)
Transport (11.2%)
Buildings (3.9%)
Power (0%)
Sector Main abatement measures
Forestry Improved stoves (Fuel wood, LPG, biogas, electric), sustainable forest management, Reduced Emissions from Deforestation and forest Degradation (REDD)
Agriculture Livestock: Value chain efficiency, diversification of animal mix, mechanization and pastureland improvement Crops: low emitting and yield increasing techniques and irrigation
Industry Biomass (agri-residues), energy efficient equipment, waste heat recovery
Transport Electric rail, fuel efficiency standards, hybrid and electric vehicles; mixing ethanol and biodiesel
Buildings High-efficiency lighting, landfill gas management; improved liquid waste management
Power Clean power production and export
Costs and financing
• Abatement costs: – For over 80% of the abatement potential, less
than 15 USD per t of CO2e
– Total cost of building a green economy during 2010-2030 =150 billion USD
• Some of these costs could be financed through climate finance
• Funding sources: own initiatives, supported initiatives, market-based initiatives
Co-benefits of strategy:
– Public health: reduced indoor and outdoor air pollution; improved water quality
– Rural development: improved soil fertility, food security
– Reduced reliance on imported fossil fuels
Implementation plan• Overall responsibility given to Ethiopia’s Environmental
Council
• Govern CRGE initiative under co-responsibility of EPA and Min. of Finance and Econ. Devt.
• Use existing institutions whenever possible
• Stakeholder consultation key to awareness creation, feedback & proper implementation
Next steps
1. Include GE strategy in sectoral development plans
2. Identify and select priority initiatives
3. Prepare implementation, resource, and investment plans
4 initiatives selected for fast-track implementation:
1. Exploit vast hydropower potential; 2. Promote improved rural cooking
technologies; 3. Improve livestock value chain;4. Reduce Emissions from Deforestation and
forest Degradation (REDD).
Examples of actual projects being implemented:
Grand renaissance dam on the Blue Nile - 6000 MW gen. capacity, mainly financed domestically (bonds, donations)
Wind energy, pilot production through connection to the grid
Humbo afforestation/reforestation project: first CDM project in Ethiopia (covering 2,728 ha)
Some more examples• Construction of infrastructure for light rail
network started in Addis Ababa
• Derba cement factory (climate finance for cleaner technology)
• Blending of ethanol with gasoline
• Ethanol cook stoves to households
Concluding remarks
• Adaptation to local context: countries need to prepare their own GE strategies; identify synergies and trade-off
• Green investment/technologies important vehicles to build green economy
• Public-private partnership opportunities
• Political commitment important
Concluding remarks (2)
• Government needs to create enabling environment (provide incentives + appropriate institutional arrangements)
• North-South compensation on global env. problems (adaptation, mitigation etc. on principle of common but differentiated responsibilities)
Concluding remarks (3)
• Need for research & learning
• Costs and benefits of strategies and policies should be assessed
• Capacity strengthening needed: human resources, financial
