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National Green Economy Baseline - Ethiopia

June, 2019

Written by
Mrs. Belaynesh Biru
Mr. Fekadu Gebeyehu
Mr. Esmael Mohammed
Mr. Tinsea Wondimu Abera
Mr. Belisti Adugna

Ministry Water, irrigation and Energy
Ministry of Trade and Industry
Ministry of Mine and Petroleum

Overview of environmental trends

Ethiopia has a unique topography, with elevations ranging from 126m below sea level to mountains exceeding 4,500m. It covers 1,104,300km2 of land has large climate diversity with areas of equatorial rainforest in the South contrasted with desert like conditions in the northeast. It is the second most populated country in sub-Saharan Africa. The economy is strongly marked by agriculture, which contributes to 36% to the GDP (industry contributes 25% and services 39%) and employs close to 70% of the population.

Further, an overwhelming proportion of the country’s energy consumption is derived from biomass energy sources including fuel wood and charcoal, which supply is associated with massive deforestation and land degradation. Estimated forest losses are attributable to agricultural expansion and the use of fuel wood. New land will be required to accommodate the demands of commercial farming, subsistence cropping, pasture and range development. This makes the economy also highly vulnerable to climate change.

The high dependence on the natural resources for livelihood and lack of proper natural resources management systems is causing deforestation, soil degradation, overgrazing, soil erosion, desertification, flood, and water shortage.

The government of Ethiopia is considering the environmental urgencies and initiated an action to plant 4 billion trees by one year and started to plant by July 29/2019. If the 80% of the trees are grown we can reduce huge amount of carbon emission. Development that is not based on green growth may lead to prosperity, but only in the short term, and will soon be undermined by insecurity and vulnerability. That’s why greening the economy is needed.

The Government of Ethiopia has initiated the Climate-Resilient Green Economy (CRGE) initiative to protect the country from the adverse effects of climate change and to build a green economy that will help realize its ambition of reaching middle income status before 2025. The CRGE strategy clearly presents and elaborates climate change adaption and mitigation actions across sectors that will enable Ethiopia realize a low emission, fast and sustainable economic growth.

Legal environmental framework

Safeguarding the environment requires coordinated effort by individuals, communities, institutions and governments. The highest law in Ethiopia is the constitution, adopted by the highest legislative body (parliament) and signed by the head of state in 1995. It states (FDRE, 1995): The Constitution is the supreme law of the land. Any law, customary practice or a decision of an organ of state or a public official that contravenes this constitution shall be of no effect. The Constitution includes several articles that are relevant to the environment (FDRE, 1995). Such as Article 44/1 states which that all persons have the right to a clean and healthy environment (environmental rights). Article 92/1: Government shall endeavour to ensure that all Ethiopians live in a clean and healthy environment (environmental duty and objective). Safeguarding the environment from any human-made damage is covered by Articles 92/2 and 92/4 which state that projects, investments or developments should not destroy and pollute the environment (water, air and soil).

On the basis of Ethiopia’s vulnerability to climate change, the Government of the Federal Democratic Republic of Ethiopia (FDRE) has established a macroeconomic policy and strategy framework. Sectoral development policies and strategies have been, or are currently being, formulated. Environmental sustainability is recognized in the constitution and in the national economic policy and strategy as a key prerequisite for lasting success. However, there is yet no overall comprehensive formulation of cross sectoral and sectoral issues into a policy framework on natural resources and the environment to harmonize these broad directions and guide the sustainable development, use and management of the natural resources and the environment. Therefore, given the current stage of the country’s political and policy development, the time is opportune for developing a comprehensive environmental policy on natural resources and the environment.

The Environmental Protection Authority (EPA) was established by Proclamation No 9/1995 with the statutory responsibility for overall protection of the environment that led to the development and publication of the Environmental Policy of Ethiopia (EPE) in 1997. To implement the EPE, legal instruments were implemented, namely, the EPA was re-established by Proclamation No 295/2002 and other proclamations like Proclamation No 299/2002 for Environmental Impact Assessment (EIA) and Proclamation No 300/2002 for Pollution Prevention and Control were promulgated. Today the EPA is again re-established as Environment, Forest and climate change commission (EFCCC).

Green economy policies

Ethiopia’s Green Economy Strategy, approved in October 2011, builds on the green growth study conducted under the Prime Minister’s Office in 2010. The CRGE initiative follows a sector approach and has so far identified and prioritized more than 60 initiatives. The green economy plan is based on four pillars: 1. Improving crop and livestock production practices for higher food security and farmer income while reducing emissions; 2. Protecting and re-establishing forests for their economic and ecosystem services, including as carbon stocks; 3. Expanding electricity generation from renewable sources of energy for domestic and regional markets; 4. Leapfrogging to modern and energy efficient technologies in Transport, Industrial sectors, and Buildings. Ethiopia intends to reach middle income status by 2025.

As set forth in the Growth and Transformation plan (GTP), reaching this goal will require boosting agricultural productivity, strengthening the industrial base, and fostering export growth.

The Government of Ethiopia (GoE) has also developed policies, strategies and action plans, including Ethiopia’s Growth and Transformation Plan (GTP), the National Adaptation Program of Action (NAPA), the Nationally Appropriate Mitigation Actions (NAMAs), Ethiopia’s Program of Adaptation to Climate Change, Energy Policy, Water Policy, Agricultural and Rural Development Policy Strategies, among others. These provide a legal basis for resource mobilization to address climate change adaptation and mitigation, including mainstreaming and integrating climate change issues into relevant government organs.

Environmentalfiscal reform

The CRGE strategy is fully aligned with Ethiopia’s second Growth and Transformation plan (GTP II, 2015/16-2019/20), the key strategic document guiding government action. The GTP II has set out an objective to achieve an annual average real GDP growth rate of 11percent per annum within a stable macro-economic environment. The plan envisions transforming the Ethiopian economy into a lower middle income category by 2025 through increasing the productivity, quality and competitiveness of the productive sectors; enhancing the capacity, participation and equitable benefit of citizens and thereby realizing developmental political economy through strengthening democratic developmental state.

Clean Electricity for All Program: As part of the main elements of the NDC Strategy, Ethiopia has committed to ambitious targets in generation and use of clean and renewable energy with focus to address issues of energy access, quality of supply and productive energy use. For instance, Ethiopia has put ambitious target to expand access to grid connection to nearly 100% by 2020. In this endeavor as well, significant progress has been achieved over the past years. Ethiopia has been able to substantially increase its power generation installed capacity from 800MW to 4300MW. There are also ongoing huge investments to generate additional energy capacity from hydropower, solar, wind and geothermal sources, including Africa’s biggest hydroelectric project called Grand Ethiopian Renaissance Dam with USD 4 billion budget.

Under the motto of “Electricity for All by 2025”, Ethiopia has launched in 2017 the National Electrification Program (NEP) with ambition to scale up connectivity to 100% by 2025. Being part of Ethiopia’s climate action plan, NEP aims at integrated grid and off-grid electricity access fast paced and ambitious grid connection rollout programs focusing on network expansion, densification and increased connectivity.

In 2018 a fast paced ambitious grid connections rollout program was implemented by Ethiopian Electric Utility (EEU). It started, and was designed for scaling up connectivity nearly five-fold from 2017 until 2025; to over 14 million households in customer count terms (equivalent to 65% of the population in 2025 of about 22 million households); and a coordinated and enhanced design and reach off-grid access rollout program alongside grid connections for the achievement of universal access by 2025, targeted to provide access for the remaining 7 million rural and deep rural households without grid connectivity (equivalently about 35percent of the population in 2025). The off-grid program component designs - deploying individual solar systems and isolated mini/micro-grids as feasible - and respective implementation and financing frameworks, will incorporate the relevant and proven international experience from country specific program instances where such a scale has been achieved demonstrably and sustainably; especially for rural areas.

In addition, explicit cross-sectoral linkages with the productive and social services sectors – especially health, education, water supply points – to achieve 100 percent access at the latest by 2022 in the case of secondary schools and primary health centers. NEP has an implementation cost of more than $ 6.5 Billion and Ethiopia has already started the process of implementation with USD 375 Million support from the World Bank (WB).

In this endeavor as well, significant progress has been achieved over the past years. Ethiopia has been able to substantially increase its power generation installed capacity from 800MW to 4300MW. There are also ongoing huge investments to generate additional energy capacity from hydropower, solar, wind and geothermal sources, including Africa’s biggest hydroelectric project called Grand Ethiopian Renaissance Dam with USD 4 billion budget.

Institutional setup

The institutional structures that is in place to support CRGE implementation are Prime Minister’s Office, Environment, Forest and climate change commission (EFCCC), Ministry of Finance (MoF), and sectoral ministries: Ministry of Agriculture (MoA); Ministry of Trade and Industry (MoTI); Ministry of Urban Development and Construction (MoUDC); Ministry of Water, Irrigation and Energy (MoWIE); and Ministry of Transport (MoT). The Prime Minister’s Office provided strong oversight to the implementation of the CRGE strategy. The MoF has established a CRGE Facility, a national financing mechanism for CRGE implementation. The Facility, which is hosted and financially managed by MoF, with EFCCC leading on technical aspects, coordinates this work closely with line Ministries. Overall, the CRGE Facility aims to:-
• Mobilize and allocate finance - The Facility is the Government’s vehicle to mobilise, access and combine domestic and international, public and private sources of finance to support the institutional building and implementation of Ethiopia’s CRGE Strategy;
• Coordinate stakeholders - The Facility provides a single engagement point where the Government, development partners, the private sector, civil society and other stakeholders can engage and make decisions about how best to utilise available finance in the pursuit of the CRGE vision and goals; and
• Unlock capital at scale - blending investment sources and leveraging: The Facility will use climate finance to complement other existing forms of investment to bolster Ethiopia’s core climate-compatible development activities, thereby promoting the full integration of CRGE with the GTP.

Key links for further reading





https://www.east-africa www.summit.com/sites/default/files/clarion_www_poweringafricatanzania_com/pdfs/nep_2.0_ethiopia.pdf




CRGE Facility Monitoring and Evaluation System Manual

Integrating the Climate-Resilient Green Economy (CRGE) Strategy in Sector Development Plan

Page Manager: Webbredaktionen|Last update: 5/8/2020

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