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Journal of African Economies Advance Access originally published online on March 15, 2009
Journal of African Economies 2009 18(4):529-554; doi:10.1093/jae/ejp002
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© The author 2009. Published by Oxford University Press on behalf of the Centre for the Study of African Economies. All rights reserved. For permissions, please email: journals.permissions@oxfordjournals.org

Economic Impact of Climate Change on Crop Production in Ethiopia: Evidence from Cross-section Measures

Temesgen Tadesse Deressa* and Rashid M. Hassan

Department of Agricultural Economics and Rural Development, Faculty of Natural and Agricultural Sciences, Centre for Environmental Economics and Policy in Africa (CEEPA), University of Pretoria, Pretoria 0002, Republic of South Africa

*  Corresponding author: Temesgen Tadesse Deressa, Department of Agricultural Economics and Rural Development, Centre for Environmental Economics and Policy in Africa (CEEPA), University of Pretoria, Room 2-4, Agric. Annexe, Pretoria 0002, Republic of South Africa. Telephone: +27 12 420 5767. Fax: +27 12 420 4958. E-mail: ttderessa{at}yahoo.com

This study used the Ricardian approach that captures farmer adaptations to varying environmental factors to analyze the impact of climate change on crop farming in Ethiopia. By collecting data from farm households in different agro-ecological zones of the county, net crop revenue per hectare was regressed on climate, household and soil variables. The results show that these variables have a significant impact on the net crop revenue per hectare of farmers under Ethiopian conditions. The seasonal marginal impact analysis indicates that marginally increasing temperature during summer and winter would significantly reduce crop net revenue per hectare whereas marginally increasing precipitation during spring would significantly increase net crop revenue per hectare. Moreover, the net crop revenue impact of predicted climate scenarios from three models (CGM2, HaDCM3 and PCM) for the years 2050 and 2100 indicated that there would be a reduction in crop net revenue per hectare by the years 2050 and 2100. Moreover, the reduction in net revenue per hectare by the year 2100 would be more than the reduction by the year 2050 indicating the damage that climate change would pose increases with time unless this negative impact is abated through adaptation. Additionally, results indicate that the net revenue impact of climate change is not uniformly distributed across the different agro-ecological zones of Ethiopia.

JEL classification: C53, Q25, Q54


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