The Green Economy Experience in Ethiopia (2-3)

This paper was prepared by Dr. Alemu Mekonnen an Assistant Professor at Addis Ababa University for UNDP Platform for Development Round Table on “Potentials for Green Investment in Sudan” organized in Collaboration with the Ministry of International Cooperation (MIC) of the Republic of Sudan to be held on 16 July 2012 at Corinthia Hotel in Khartoum.

The work done by the sub-technical committee in the preparation of the green economy strategy included identification of current and projected GHG emissions under business as usual (BAU) scenarios until 2030, identification of drivers and abatement levers in seven sectors, estimation of mitigation costs and identification of financial needs and ways of financing these; and the way forward. Regional and sectoral consultations were held to receive feedback on initial results and create awareness. In an attempt to drive implementation and promote participation of a broader set of stakeholders, the green economy strategy also outlines the structure of a permanent institutional setup.
The green economy plan is to achieve Ethiopia’s development goals while limiting GHG emissions in 2030 to 150 Mt of CO2e which was the level of GHG emissions estimated in 2010. This means a reduction of GHG emissions by 250 Mt CO2e compared with what would result under a conventional development path (or a business as usual scenario) implying no change in GHG emissions over the 20-year period (2010-2030).
Taking USD 15 per ton of CO2e as the basis, which was the price of carbon credits under the European trading scheme in 2011, it is estimated that abatement costs per ton of CO2e are less than this price for more than 80 percent of the abatement potential. Total expenditure needed to build a green economy over the 20-year period (2010-2030) is estimated at USD 150 billion. With the help of the green economy strategy and more specific plan to be developed and implemented, GHG emissions abatement could be exchanged for climate finance to fund some of the investments required. Ethiopia’s green economy strategy divides all the prioritized green economy initiatives into three categories in terms of sources of funding: own initiatives; supported initiatives; and market-based initiatives.
Next steps include inclusion of the green economy strategy in sectoral development plans, identification and selection of priority initiatives and preparation of implementation, resource, and investment plans.

Green investments and green technologies in Ethiopia
 
A number of green investments and green technologies are included in Ethiopia’s green economy strategy some of which are already under implementation. In relation to forestry these include dissemination of fuel-efficient and/or alternative-fuel cooking and baking techniques which would help reduce forest degradation. Reduction in demand for fuel wood using fuel wood efficient stoves is the single most important lever which offers a potential GHG emission reduction of about 35 Mt of CO2e. In the power sector, increased supply of renewable energy such as hydropower as well as wind and geothermal would help not only reduce or substitute use of fossil fuels to generate electricity domestically, but export to countries would also help substitute for their conventional electric power generation. In the industrial sector, about 70 percent of the abatement potential lies in the cement industry. In the transport sector, the initiative with the highest abatement potential is the construction of an electric rail network which would reduce GHG emissions by 9 Mt of CO2e. For buildings, the main abatement lever is transition to high efficiency light bulbs which helps save about 5 Mt of CO2e that could be exported to replace conventionally generated electric power.

While these are stated in the green strategy document, there are ongoing initiatives on the ground on various sectors of the economy. These include construction of dams for hydroelectricity, dissemination of bio-fuel cooking stoves, blending of ethanol with gasoline and wind energy projects some of which have started operation. While there is some geothermal energy that is being exploited there is a plan to increase supply from this source. Infrastructure for light rail services in Addis Ababa and for train service across cities is being constructed already. There is also an active program to disseminate efficient electric bulbs, plant trees and sustainable land management program to improve soil and water conservation. In the area of forestry while there is one approved CDM project on reforestation/afforestation, a REDD readiness program has already been approved and preparation for REDD projects is going on.