Green economy strategies and implementation plan in developing countries: The case of Ethiopia

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

Comments are very welcome

Thank you

E-mail: [email protected]