The unexplored green energy poverty–environmental degradation nexus in Ethiopia hampers understanding of its environmental impacts and obstructs pathways toward a just and sustainable energy transition. Moreover, the moderating role of energy justice remains inadequately examined, creating critical policy gaps. This study investigates the impacts of green energy poverty and energy justice on environmental degradation, probes energy justice’s moderating role, tests the empirical validity of the STIRPARTY model, and predicts countershocks using ARDL and novel dynamic ARDL simulations on quarterly data from 2000Q1 to 2020Q4. Building on the “stochastic impacts by regression on population, affluence, regulation, and technology” (STIRPART) model, the study proposes an extended STIRPARTY framework by incorporating nonlinearity (Y) to better capture complex interactions. Findings reveal that green energy poverty significantly increases environmental degradation, while energy justice mitigates this impact in both the short and long term. Energy justice strongly moderates green energy poverty, reducing its effect on environmental harm. Simulation analysis based on a 36% change in green energy poverty shows substantial long-term effects, but energy justice helps reduce the environmental burden. The study also finds that emission reductions achieved by lowering green energy poverty may not be fully sustained over time. Environmental degradation increases with green energy poverty but at a diminishing rate until a threshold is reached. Policy implications include developing an energy justice framework for equitable, affordable, and sustainable access; bridging urban–rural energy gaps through renewables; creating public–private partnerships for co-financing, technical support, and local joint management; implementing sector-wide energy efficiency programs; forecasting environmental countershocks; and enforcing sustainable land-use policies.

Inclusive growth in sub-Saharan Africa (SSA) faces persistent challenges from structural vulnerabilities and external shocks, notably volatile global energy prices. These shocks disrupt macroeconomic stability, hinder poverty reduction, and restrict access to essential services, and are further exacerbated by dependence on imported fuels. Despite the complex transmission of energy price shocks through indirect macroeconomic channels, empirical evidence on these pathways remains limited. This study examines the impact of global energy price fluctuations on inclusive growth in 33 SSA countries and six oil-exporting countries from 1996 to 2020, using two-step System GMM and Panel ARDL methods. An Inclusive Growth Index is constructed via composite PCA, encompassing eight dimensions and 34 indicators. Results indicate that rising energy prices reduce investment, household and government consumption, employment, shadow economy activity, and CO2 emissions, while increasing exchange rate depreciation and inflation, yielding a net negative impact in the short run (-0.0075 %) and the long run (-9.427 %). In oil-exporting SSA countries, energy prices negatively affect inclusive growth through investment, government spending, employment, shadow activity, and inflation, but positively influence it through exchange rates, household consumption, and CO2 emissions, resulting in a net negative effect (-0.049 %). Overall, inclusive growth in SSA follows an inverse-S trajectory with a negative net effect. The study recommends that oil-importing countries expand targeted subsidies, promote off-grid solar solutions, and encourage private sector participation through blended finance and public-private partnerships. Oil-exporting countries should strengthen sovereign wealth funds, allocate energy windfalls to industrial diversification, and boost clean energy investment. Channel-specific interventions are also proposed.

Given the severity of global environmental degradation, particularly in countries like Ethiopia, it is urgent to rethink its drivers and measurements for actionable policy development. The relationships among these predictors are complex, often nonlinear, non-additive, and include reverse causality, making it difficult for traditional econometric models to capture them. Conventional CO2 metrics also tend to overlook unique emission sources in developing countries, where emissions are closely linked to energy production, unsustainable agriculture, deforestation, and land use rather than industry. To address these gaps, this study applies a kernel-based machine learning model and develops context-specific CO2 metrics to analyze environmental degradation predictors and forecast their long-term impacts in Ethiopia using quarterly data from 2000Q1 to 2020Q4. The findings indicate that economic growth, industrialization, energy poverty, urbanization, ICT, and resource rent are significant predictors, exhibiting complex, nonlinear relationships. Long-term prediction analysis shows that energy poverty, economic growth, ICT, and urbanization initially worsen degradation but lead to stabilization over time. In contrast, industrialization and resource rent predominantly exacerbate environmental issues before leveling off. The study recommends policies to enhance energy access and efficiency through renewable energy subsidies and financial incentives, integrate green infrastructure into urban planning, incentivize clean industrial technologies, promote environmentally inclusive growth, regulate eco-friendly ICT, such as energy-efficient data centers and e-waste management, implement a resource rent tax, and use adaptive policies with real-time analytics to address degradation thresholds, balancing economic growth with resilience and sustainability.

Financial inclusion is recognized as a vital driver of sustainable development and serves as a fundamental pillar of climate action. It is crucial to enhance the climate resilience of smallholder farmers in the face of severe and unpredictable climate shocks, which disproportionately affect them. However, the level of financial inclusion in Ethiopia remains low, and its impact on the climate resilience of smallholder farmers has not been thoroughly examined using rigorous model and comprehensive dataset. This study investigates the impact of financial inclusion on the climate resilience of rural households, using a large data set from the Ethiopian Socio-Economic Survey. The principal component analysis was applied to construct a climate resilience index. The financial inclusion was measured using an index that encompasses three dimensions: penetration, availability, and usage. In order to address the endogenous nature of financial inclusion, an instrumental variable approach was employed, using the distance to the nearest financial institution and religion as instrumental variables. The results demonstrated a positive and significant impact of financial inclusion on the climate resilience of rural households. Therefore, the government should strengthen the provision of essential financial and related infrastructures in rural Ethiopia to improve access to financial products and services. Furthermore, it is essential for policymakers to initiate and implement financial sector reforms that ensure the availability of affordable and tailored financial services. These reforms should also prioritize the development of climate-resilient agricultural finance, thereby contributing to the achievement of climate action goal of sustainable development.

The challenge of achieving “growth” without development in numerous developing countries, particularly within the African region, has instigated a discourse on the effects of institutional quality and the macroeconomic environment on the primary drivers of growth and remittance inflows. This paper seeks to scrutinize the interplay between capital inflow, remittances, and economic growth in Sub-Saharan African (SSA) countries, considering the moderating influence of institutional and macroeconomic stability. Employing a balanced panel data set encompassing 24 countries from 2005 to 2019, this study investigates the hypothesis that the impact of capital inflow on economic growth varies depending on the institutional quality and macroeconomic stability of the recipient countries. The study employs a DOLS panel-based cointegration approach, revealing heterogeneous slope coefficients, as evidenced by the slope homogeneity test. Furthermore, the cross-sectional dependence test indicates that the panels are independent across different sections. All variables are I (1), as affirmed by the CADF and CIPS tests for unit root.The cointegration test conducted by Pedroni, Kao, and Westerlund establishes that the examined variables maintain long-term relationships. The long-run estimated coefficients derived from the regression analysis using DOLS cointegration demonstrate a positive correlation between per capita income and remittance when interacted with macroeconomic policy. Consequently, addressing institutional quality and macroeconomic stability is imperative, as they play a pivotal role in moderating the efficacy of remittance inflows and their impact on the economic growth of the region.

Climate change remains a significant threat to farm households, especially in developing countries. It exacerbates their vulnerability to food insecurity by reducing agricultural productivity and raising agricultural production costs. Adoption of climate smart-agricultural (CSA) practices is a promising alternative to build resilient farm households. In this study, we assessed the impacts of adopting CSA practices on climate resilience and vulnerability among farm households in Bale-Eco Region, Ethiopia. A power calculation was used to determine the sample size, and 404 farm households were randomly selected to collect data using structured questionnaire. We estimated household climate resilience index using categorical principal component analysis, and vulnerability index using vulnerability as expected poverty approach. Endogenous switching regression model, which is conditional on the adoption of multiple CSA practices and used to control selection bias and unobserved heterogeneity, was used to assess the impacts of CSA practices on household climate resilience and vulnerability. We employed counterfactual approaches to assess the impacts. The results show that the average treatment effects for most CSA practices are statistically significant and positive for resilience, but negative for vulnerability. This provides empirical support for interventions in climate-smart agriculture, which can help farm households build resilience and reduce vulnerability. We, therefore, suggest that agricultural policies should encourage the adoption of CSA practices and provide incentive packages to farm households that promote this.

Adoption of climate smart agricultural (CSA) practices has been widely recognized as a promising and successful alternative to minimize the adverse impacts of climate change. However, their adoption among smallholder farmers remains low in developing countries, including Ethiopia. This study examines factors that influence adoption and the level of adoption of multiple CSA practices, including improved agronomy, soil and water conservation, drought tolerant high yielding crop variety, small-scale irrigation, integrated disease, pest, and weed management, and integrated soil fertility management, using survey data from 404 farm households in Bale-Eco Region (BER), Ethiopia. The study applied a multivariate probit model for analyzing the simultaneous adoptions of multiple CSA practices, and ordered probit model for examining the factors influencing the level of adoption. The CSA practices are found to be complementary. Moreover, farmers' adoption of multiple CSA practices, as well as their intensity of adoption, is significantly influenced by the age of the household head, education, land size, household total asset value, frequency of extension contacts, farmer awareness of climate change, farmer experience with climatic shocks, parcel fertility, slope, and severity of soil erosion. The study's findings suggest that agricultural policy makers and implementers of CSA should recognize the complementarity among CSA practices in order to intensify their adoption among BER farmers and disseminate CSA practices in other parts of the country. Moreover, policymakers should consider household socio-economic, institutional, and parcel-specific factors that positively influence CSA adoption.

In response to global opportunities and domestic challenges, Ethiopia is revising its energy policy to switch from high-cost imported fossil fuel to domestically produced biofuels. Currently, there are biofuel investment activities in different parts of the country to produce ethanol and biodiesel. However, there is no rigorous empirical study to assess impacts of such investments. This paper assesses the distributive effect and food security implications of biofuels investment in Ethiopia, using data from 15 biofuels firms and 2 NGOs in a CGE (computable general equilibrium) analysis. Findings suggest that biofuels investments in the context of Ethiopia might have a ‘win-win’ outcome that can improve smallholder productivity (food security) and increase household welfare. In particular, the spillover effects of certain biofuels can increase the production of food cereals (with the effect being variable across regions) without increasing cereal prices. When spillover effects are considered, biofuel investment tends to improve the welfare of most rural poor households. Urban households benefit from returns to labor under some scenarios. These findings assume that continued government investment in roads allows biofuels production to expand on land that is currently unutilized, so that smallholders do not lose land. Investment in infrastructure such as roads can thus maximize the benefits of biofuels investment.

This paper explores the tradeoffs between domestic and productive uses of biomass energy sources in the Nile Basin of Ethiopia using a non-separable farm household model where labor and other input allocations to energy collection and farming are analyzed simultaneously. We estimate a system of five structural equations using three stages least squares and find that use of dung as a domestic fuel source has a negative impact on agricultural productivity while, use of fuelwood is associated with increased productivity. In particular, on-farm production of fuelwood appears to provide many benefits for crop productivity and labor savings, by making fuelwood collection easier and more convenient for households. The results show that households remain reliant on multiple sources of traditional biomass fuels and that these are largely complementary. At the same time, rural households have limited options to meet their domestic energy needs, and most lack access to modern fuels and technologies. The discussion suggests ways of making domestic energy collection more efficient through policy interventions aimed at the promotion of agroforestry and increasing access to new energy-efficient technologies.

Rural households in Ethiopia have limited options to meet their domestic energy needs because they lack access to modern fuels and technologies. Domestic use of certain fuel sources, such as cow dung, can hinder agricultural outcomes and productivity. This article explores the tradeoffs between domestic and productive uses of biomass energy sources in the Nile Basin of Ethiopia using a nonseparable farm household model where labor allocation to energy collection and farming are analyzed simultaneously. We estimate a system of five structural equations using three-stage least squares and find that the use of dung as a domestic fuel source has negative implications for the value of harvested crops, while use of on-farm fuelwood is associated with increased value of agricultural output. On-farm production of fuelwood appears to increase the value of crop output and provide labor savings, by making fuelwood collection more convenient for households. Policy interventions to support the expansion of agroforestry and increase access to new energy-efficient technologies are needed to ensure that agricultural productivity can be both increased and sustained.

In the context of increasing vulnerability to climate change for people dependent on natural resources for their livelihoods, the International Food Policy Research Institute and partner organizations in Ethiopia, Kenya, Mali, and Bangladesh undertook a project broadly aiming to create knowledge that will help policymakers and development agencies to strengthen the capacity of male and female smallholder farmers and livestock keepers to manage climate-related risks. This study—one component of the project—examines the networks and power dynamics of stakeholders in the four target countries so as to (1) identify potential partners in the research process, (2) find out which organizations could make use of the research findings in their activities, and (3) inform the communication and outreach strategy of the research project. This paper describes the network structures for climate change policy, the actors in the networks with high centrality and influence scores, and the implications of these results for outreach and dissemination.

Rising prices of fossil fuels, together with apprehension about the environmental harm created by them, have resulted in increasing efforts to search for alternative energy sources such as biofuels. Biofuels production is still a debatable issue regarding the opportunities it creates and the challenges it poses. Its proponents see it as an alternative energy source that substitutes renewable and relatively clean energy for conventional energy sources. Sceptics, however, consider it a threat to the poor. Some even take it further and perceive it as a crime against humanity to raise crops for fuel instead of food. It is crucial for low-income, fooddeficit countries such as Ethiopia to investigate the distributional and food security questions raised by such investments. Will such biofuel investments be pro-poor or will they lower the income of vulnerable people or groups? Which group in Ethiopia, if any, will be affected negatively due to increasing biofuel investments in the country? Will such investments undermine the country’s food production or food security? Findings in Ethiopia suggest that biofuels investments can have a “win-win” outcome that can improve smallholder productivity, food security, and household welfare.

As countries increasingly strive to transform their economies from agriculture-based into a diversified one, land rental will become of greater importance. It will thus be critical to complement researchon the efficiency of specific land rental arrangements -- such as sharecropping -- with an inquiry into the broader productivity impacts of the land rental market. Plot-level data for a matched landlord-tenant sample in an environment where sharecropping dominates allows this paper to explore both issues. The authors find that pure output sharing leads to significantly lower levels of efficiency that can be attenuated by monitoring while the inefficiency disappears if inputs are shared as well. Rentals transfer land to more productive producers but realization of this productivity advantage is prevented by the inefficiency of contractual arrangements, suggesting changes that would prompt adoption of different contractual arrangements could have significant benefits.

While early attempts at land titling in Africa were often unsuccessful, factors such as new legislation, low-cost methods, and increasing demand for land have generated renewed interest. A four-period panel allows use of a pipeline and difference-indifferences approach to assess impacts of land registration in Ethiopia. We find that the program increased tenure security, land-related investment, and rental market participation and yielded benefits significantly above the cost of implementation. (JEL O13, Q15)

Table of Contents: Brief 1: The Impact of Climate Variability and Climate Change on Water and Food Outcomes: A Framework for Analysis by Claudia Ringer Brief 2: Vulnerability and the Impact of Climate Change in South Africa's Limpopo River Basin by Sharon Shewmake Brief 5: Measuring Ethiopian Farmers' Vulnerability to Climate Change Across Regional States by Temesgen T. Deressa, Rashid M. Hassan, and Claudia Ringler Brief 6: Perceptions of Stakeholders on Climate Change: and Adaptation Strategies in Ethiopia by Assefa Admassie, Berhanu Adenew, and Abebe Tadege Brief 7: Micro-Level Analysis of Farmers' Adaptation to Climate Change in Southern Africa by Charles Nhemachena and Rashid M. Hassan Brief 9: Analysis of the Determinants of Farmers' Choice of Adaptation Methods and Perceptions of Climate Change in the Nile Basin of Ethiopia by Temesgen T. Deressa, Rashid M. Hassan, Claudia Ringler, Tekie Alemu, and Mahmud Yesuf Brief 12: Impacts of Considering Climate Variability on Investment Decisions in Ethiopia by Paul J. Block, Kenneth Strzepek, Mark Rosegrant, and Xinshen Diao Brief 14: Integrated Management of the Blue Nile Basin in Ethiopia under Climate Variability and Climate Change by Paul J. Block, Kenneth Strzepek, Mark Rosegrant, and Xinshen Diao Brief 16: Risk Aversion in Low-Income Countries: Experimental Evidence from Ethiopia by Mahmud Yesuf and Randy Bluffstone

This study identifies the major methods used by farmers to adapt to climate change in the Nile Basin of Ethiopia, the factors that affect their choice of method, and the barriers to adaptation. The methods identified include use of different crop varieties, tree planting, soil conservation, early and late planting, and irrigation. Results from the discrete choice model employed indicate that the level of education, gender, age, and wealth of the head of household; access to extension and credit; information on climate, social capital, agroecological settings, and temperature all influence farmers’ choices. The main barriers include lack of information on adaptation methods and financial constraints.

"Ethiopia's agricultural sector, which is dominated by smallscale, mixed-crop, and livestock farming, is the mainstay of the country's economy. It constitutes more than half of the country's gross domestic product, generates more than 85 percent of foreign exchange earnings, and employs about 80 percent of the population. Unfortunately, Ethiopia's dependence on agriculture makes the country particularly vulnerable to the adverse impacts of climate change on crop and livestock production. Thus, a deeper understanding of the complex interdependence between changing climatic conditions and Ethiopia's agricultural sector— together with adaptation options—is crucial. Additional information about farmers' awareness of climate change and current adaptation approaches would assist policymakers in their efforts to decrease the country's vulnerability to the adverse impacts of climate change. This brief is based on a study that endeavors to guide policymakers on ways to promote greater adaptation by identifying the household characteristics that increase farmers' awareness of climate change and influence farmers' decision to adapt." from text