Ethiopia's Growth Prospects in a Changing Climate: A Stochastic General Equilibrium Approach

Global Environmental Change 01/2011; 21(2):701-710. DOI: 10.1016/j.gloenvcha.2010.11.004

Posted: 26 Nov 2014

See all articles by Channing Arndt

Channing Arndt

United Nations - World Institute for Development Economics Research (UNU/WIDER)

Sherman Robinson

International Food Policy Research Institute (IFPRI)

Dirk Willenbockel

University of Sussex - Institute of Development Studies

Date Written: January 2011

Abstract

This study develops a stochastic economy-wide framework for analyzing economic impacts from climate change and potential adaptation policies. For the stochastic analysis, particular attention is paid to the development of a prior subjective distribution of future climate outcomes. The approach is applied to Ethiopia. The results highlight the importance of cumulative processes and rates of growth. In particular, if climate change affects the rate of technical change and the rate of accumulation of capital, the implications become significant over time. Furthermore, analysis of the variability of the components of GDP indicates that aggregate consumption always has a higher coefficient of variation than the other macro aggregates. The burden of adjustment appears to fall more heavily on consumers. Poor consumers are likely to experience increased vulnerability.

Research highlights:

-- Develops a dynamic CGE framework for economic climate change impact analysis.

-- Focuses on agricultural productivity impacts in a least-developed-country context.

-- Takes account of increased frequency of extreme weather events.

-- Pays particular attention to uncertainty about future climate outcomes.

-- Provides stochastic simulations of long-run growth prospects for Ethiopia.

Suggested Citation

Arndt, Channing and Robinson, Sherman and Willenbockel, Dirk, Ethiopia's Growth Prospects in a Changing Climate: A Stochastic General Equilibrium Approach (January 2011). Global Environmental Change 01/2011; 21(2):701-710. DOI: 10.1016/j.gloenvcha.2010.11.004 , Available at SSRN: https://ssrn.com/abstract=2530561

Channing Arndt (Contact Author)

United Nations - World Institute for Development Economics Research (UNU/WIDER) ( email )

Katajanokanlaituri 6 B
Helsinki, FI‐00160
Finland

Sherman Robinson

International Food Policy Research Institute (IFPRI) ( email )

1201 Eye St, NW,
Washington, DC 20005
United States

Dirk Willenbockel

University of Sussex - Institute of Development Studies ( email )

Brighton
Falmer, Brighton, East Sussex BN1 9RE
United Kingdom

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