Economy-wide effects of climate-smart agriculture in Ethiopia

Promoting climate-smart agriculture (CSA) is now a common policy in many developing countries. Yet researchers rarely quantify CSA s economic value as opposed to traditional input-intensive technologies, particularly CSA s contribution to economy-wide indicators, such as economic growth and poverty reduction. This study applied a bioeconomic modeling approach to quantify the economy-wide effects of promoting CSA and traditional input-intensive technologies (fertilizer and irrigation) in Ethiopian cereal systems. We combined a cropping systems model with a computable general equilibrium model that was linked to a poverty module. We simulated the economy-wide effects for 40-year sequences of variable climate with and without climate change. Our results suggest that adopting CSA technologies (related to no tillage and integrated soil fertility management) on a quarter of Ethiopia s maize and wheat land (approximately 900,000 hectares) would increase national gross domestic product (GDP) by an average US $146 million annually and assist 367,000 people to move out of poverty. This benefit exceeds the GDP gain of US $95 million and poverty reduction of 105,000 people expected from a similarly-sized expansion of fertilizer and irrigation. Results also suggest that the gains from CSA are greater with climate change and that CSA improves stocks of soil organic carbon. Acknowledgement : The United Nations Development Programme funded part of this study. We thank Richard D. Robertson for providing the climate data