THESIS SUBMITTED TO THE SCHOOL OF ECONOMICS IN PARTIAL FULFILLMENT OF THE REQUIREMENT OF DEGREE OF MASTERS OF SCIENCE IN ECONOMICS (ENVIRONMENTAL AND NATURAL RESOURCES ECONOMICS)

Abstract

Abstract Climate change has various impacts on agricultural sector of countries particularly for those countries whose economies highly depend on agriculture and has low adaptive capacities. Ethiopian agriculture is the one which is highly vulnerable and sensitive to climate change because of its high dependency on climate and low adaptive capacity. This study was carried out with the main objective of analyzing the economic impacts of climate change on Ethiopian crop production, particularly on those dominant crop types such as teff, wheat, barley, maize and sorghum. And specifically the study aims to examine the deep-wise impacts of climate change on each of the above selected crop types. To achieve the specified objectives, the study used the Ricardian approach and took 7605 plot and 2864 household samples. The data used for the study was from the LSMS-ISA, ESS data which was collected by the collaboration of World Bank and Central Statistical Agency for the production year of 2013/14. For climate variables, temperature and precipitation, the study used 30 years daily mean temperature and monthly mean precipitation data; which came from Climate Change Research Center of Gondar University and National Metrological Agency, Ethiopia. Net crop revenue for the whole crops and each crop was regressed on climate, soils, and socioeconomic variables. The results indicated that the variables included in the specified model of this study had significant effects on net crop revenue per plot for both the whole crop and each crop types. Further, the result from the seasonal marginal analysis of this study indicated that seasonal climate variable had a significant various impacts across each crop types. The finding showed that the whole crop, teff and sorghum crops were sensitive for summer season precipitation while wheat, barley and maize are for spring season. Introducing and expanding improved and new varieties of crops and agricultural inputs, which can resist and adopt further changes of climate variables, are recommended by this study so as to reduce the impacts of climate change on the production of those selected crop types in particular and on the whole crop production in general.