The objective of Ethiopia's green policy is to identify green economic development option that helps keep greenhouse gases emission level low without compromising the country’s pursuit of its development vision. Through this objective, Ethiopia is working to enter middle income status before 2025 by building a green economy. Had the country chose the usual route to development; it would have caused it to rapidly emit greenhouse gases and forced into an unsustainable and wasteful management of its natural resource among many other negatives. It’s to divert these negatives that the government formulated the green strategy and started working on it.
Both the government and International Monetary Fund (IMF) have admitted that Ethiopia is a country that’s growing sustainably with the fastest rate from the entire world. By sustaining the economic growth that has been recorded, Ethiopia is planning to be a middle income country before 2025.
As stated on the Second Growth and Transformation Plan (GTP), bringing this level of economic development will demand increasing agriculture production, strengthening the base of industry and expanding foreign market. And as Ethiopia is aware of its responsibilities, and since it also understands the important role developing countries have in reducing the impact of climate change, the country is playing a constructive role in the negotiation of international climate negotiations.
The fact that the country is also a front runner in green economy development is a telling of its belief to go through this sustainable development path. Had Ethiopia followed the usual path to its economic development objectives, the environmental problems that are seen in the whole world would have also happened in the county.
Following the usual route to development would have meant that the 150 million metric carbon dioxide (CO2) emission of the country would have doubled and reached 400 million metric tons of CO2 by 2025. The country would have faced situations that are diametric to its development aspirations.
For example the country’s capacity to shoulder domesticated animals would have been less than the livestock it needs. And the country's economy would have been shackled by outdated technology, while also facing great challenge with regards to finance. For instance by paying up most of its GDP for imported oil, its foreign currency reserve would have shrunk.
The government is also being successful with respect to prioritizing development sectors that should come first in the bid to build climate-resilient green economy. This decision would help Ethiopia's effort to decrease its greenhouse emission level to less than 250 million metric ton of carbon dioxide (CO2), and enable the country to bring about its planned economic development.
Ethiopia’s green economy is based on four pillars. The pillars are based on a thinking that dictates in order to decrease the emission of green house gases and securing food supply thereby increasing the income if the farmer, productivity of crops and domestic animals should be increased. They are: improving crop and livestock production practices to allow for better food security and higher farmer incomes while reducing greenhouse emissions; protecting and re-establishing forests for their economic and ecosystem value, specifically including an increase in carbon stocks; expanding electricity generation from renewable sources of energy for domestic and regional markets; and leapfrogging to modern and energy-efficient technologies in the transport, industrial and construction sectors. These green economy implementations will cut one ton (10 quintal) carbon dioxide (CO2) emission at a cost of 15 USD. This cost of 15 USD can be returned through Carbon trade as per European Union Emissions Trading System 2011.
The revenue those green economy sectors that have been identified generate is more than their expenditure. So, in addition to providing direct contribution to the economy, they will create jobs that generate better salary. 150 million USD is needed within the next 20 years in order to build green economy. Half of its investment can be covered from the Carbon income the green economy generates. Implementing the tasks also brings additional benefits. For example conserving the health of the air and water helps maintain health.
It also improves soil fertility, food supply while also hastening rural development. And the government has formulated the strategy that would enable us to realize this objective. In order to make the strategy successful, a joint of many institutions have done various works. The works revolved around utilizing huge quantity of the water resource, providing energy-conserving modern stoves widely to households, improving the value chain of domesticated livestock animals, protecting trees from destruction and decreasing emission of harmful gases.
These implementations have a huge chance in bringing rapid growth, decreasing emission of harmful gases, and generating revenue. Ethiopia is one of the countries that have a rapid economic growth. And continuing with its recent economic development trend, Ethiopia will be one of the middle income countries before 2025. And the country will achieve this through building green economy.
By basing on the economic development that is garnered in previous years, Ethiopia is working to reach its GDP 1000 USD, and to be part of middle income countries. According to World Bank 2009 report, the annual GDP of the lowest from middle income countries is 996 USD. In order to realize the objective, adhering to green economy is important.
In order to realize the objective of getting into middle income countries by 2025, the Growth and Transformation Plan should continue for three phases. The development will change the share the various sectors have within the economy. At 2025, the contribution of the agriculture sector provides to the economy will diminish to 28%, while the share of the industry sector is expected to reach 32%. This means the service sector share will be 39%. This will be a time when the industry sector will rise.
The reason behind the choice to base our power generating alternatives on renewable sources is to make the sources clean from emitting greenhouse gases. Since the industrial revolution, the amount of the greenhouse gases Ethiopia emitted is meager. Compared to the 10 tons of carbon dioxide emission of the European Union, and to the US and Australia 20 tons of carbon dioxide emission, Ethiopia's emission of 2 tons of carbon dioxide (CO2) is very small even after years of rapid growth.
If Ethiopia hadn’t get out of the usual path to development most countries take, it would have incurred additional problems. In the usual development process, when the economic growth or the number of population increases, the emission of harmful gases rises as well. Sticking to the usual path to development means an increase in emitting harmful gases when Ethiopia's economy inevitably rises and its population number increases. Therefore, the effort to build climate-resilient green economy has factored the rise in the level of emission in the usual path.