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

1. Green economy strategies and implementation plan in developing countries: The case of Ethiopia Alemu Mekonnen Department of Economics at Addis Ababa University and EfD Ethiopia at Ethiopian Development Research Institute Prepared for Development Talks on “After Rio+20: Next steps towards inclusive green growth”, organized by Sida 17 September 2012, Stockholm

2. 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

3. 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

4. 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

5. 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

6. GE strategy based on 4 pillars: • Improved crop and livestock production, and reduced emissions • Protect & re-establish forests • Expand electricity generation from renewables • Leapfrog to modern, energy-efficient technologies in transport, industry & buildings

7. 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

8. Projections: Sectoral shares (%)

9. Rapid increase in GHG emissions - if nothing done

11. Sectoral distribution (Mt of CO2e)

14. 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

15. 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

16. 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

17. Next steps • Include GE strategy in sectoral development plans • Identify and select priority initiatives • Prepare implementation, resource, and investment plans

18. 4 initiatives selected for fast-track implementation: • Exploit vast hydropower potential; • Promote improved rural cooking technologies; • Improve livestock value chain; • Reduce Emissions from Deforestation and forest Degradation (REDD).

19. Examples of actual projects being implemented: Grand renaissance dam on the Blue Nile - 6000 MW gen. capacity, mainly financed domestically (bonds, donations)

20. Wind energy, pilot production through connection to the grid

21. Humboafforestation/reforestation project: first CDM project in Ethiopia (covering 2,728 ha)

22. 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

23. 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

24. 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)

25. Concluding remarks (3) • Need for research & learning • Costs and benefits of strategies and policies should be assessed • Capacity strengthening needed: human resources, financial

26. Comments are very welcome Thank you E-mail: alemu_m2004@yahoo.com