Ethiopia Drought Risk (Executive Summary)

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Authors: Florian Waldschmidt, Alvaro Rojas, David Daou, Eike Behre, Teresa Arce Mojica, Preeti Koirala, Irafan Ullah, Zita Sebesvari, Sönke Kreft and Maxime Souvignet


In this report, drought adaptation measures were analyzed for the Afar and Somilai regions in Ethiopia in terms of cost-efficiency and risk mitigation effectiveness. A total of 26 measures (13 options of measures in each region) were successfully assessed using the modelling platform CLIMADA. The main findings are summarized below:

1) The present annual expected damage is USD 35m in Afar and USD 123m in Somali, increasing to USD 217m and USD 788m by 2050 (moderate climate scenario);

2) All selected measures are cost efficient for the selected assets;

3) Yet, all measures combined are not sufficient to account for the total climate risk presented by drought. A significant higher investment is needed to address the issue at this scale;

4) By 2050 all measures for drought will be cost-efficient, with co-benefits for population at risk, under extreme climate conditions;

5) Climate index insurance for crops and livestock are cost-efficient and can help cover parts of the remaining risks, so called residual risks, after the most efficient physical adaptation measures have been implemented;

6) The top three cost-efficient measures for Afar are:
a. Improved forage storage
b. Management of protected areas
c. Establishment of communal seeds bank

7) The top three cost-efficient measures for Somali are:
a. Establishment of communal seeds bank
b. Wetland Restauration
c. Establishment of fodder tree and grass nurseries

8) With the top six cost-efficient measures, the Afar and Somali regions will be able to avoid an estimated USD 500 million in damages and protect around 90 000 people over the next 31 years with an investment of under USD 10 million.


1.1 Introduction

Storms, floods, droughts, and other extreme weather events can threaten urban and rural areas, from small regions to entire nations. Along with growing populations and economies, losses from natural hazards are rising in the world's most exposed areas as our climate continues to change. The Economics of Climate Adaptation (ECA) is a decision-making support framework that integrates climate vulnerability and risk assessments with economic and sustainability impact studies to determine the portfolio of optimal adaptation measures for various climate risks.

The United Nations University - Institute for Environment and Human Security (UNU-EHS) in cooperation with and funded by the InsuResilience Solutions Fund (ISF), is implementing the Economics of Climate Adaptation (ECA) framework in the Afar and Somali regions in Ethiopia, to identify the most cost-efficient measures to address the negative impacts of droughts. The ISF is funded by the German Development Bank (KfW) on behalf of the German Ministry for Economic Cooperation and Development (BMZ). Currently, the Economics of Climate Adaptation (ECA) methodology is being implemented in three different countries (Vietnam, Honduras, and Ethiopia).

This report presents an executive summary of the different stages of the process of implementation of the ECA study and the final recommendations for adaptation measures to drought events in the Somali and Afar regions in Ethiopia. Over the period of the project, representatives of the Ministry of Agriculture of the Federal Democratic Republic of Ethiopia (MoARD), local governments, and further stakeholders engaged in providing input and feedback on the assumptions, decisions, data, and adaptation options assessed. A total of 26 (13 in Afar and 13 in Somali) drought adaptation measures were identified and validated by the MoARD and other stakeholders to be run by the modelling platform CLIMADA, including technological and engineering solutions, ecosystem-based (nature-based) approaches, maintenance/ operational measures, and risk transfer/ insurance solutions.