Enhancing Adaptation and Mitigation Activities Through Effective Climate Change Financing Policy in Ethiopia

Abstract

The Ethiopian government has committed to building a Climate Resilient Green Economy (CRGE) that aims to ensure economic development whilst pursuing a low emissions pathway and building resilience to climate change. While the Government’s green economy strategy targets the financial opportunities and sustainability co-benefits of low emissions development, the climate resilient strategy focuses on managing risk and building resilience to shocks brought about by climate change. The effectiveness of these national policy processes in directing the delivery of climate finance are assessed through the use of a principles, criteria and indicators (PCI) analytical framework. The four principles of policy development considered relevant to the effective delivery of climate change finance are ease of implementation, legitimacy, coherence and transparency. The analyses of effectiveness suggest the main policy instrument, the CRGE strategy, has been well designed for ease of implementation, with coherence across the two main elements of the strategy (mitigation and adaptation). The mitigation (or green economy) element began earlier and has been influential in informing the overall growth trajectory that aims to secure for Ethiopia middle income status by 2025 in a carbon neutral way. The more recent adaptation (or climate resilience) part of the strategy has now been prepared for the agriculture, forestry, water and energy sectors. This demonstrates effective sector prioritisation so as to secure the livelihoods of those most vulnerable to climate change. Two areas are identified where further effectiveness gains may be sought for enhancing adaptation. The first concerns securing the active participation of all stakeholders in the policy process so as to maximise the likelihood of implementation of climate change programmes and projects. Second, the present policy is silent on how it will promote transparency in climate finance delivery, which is a generally-held principle of public administration. Creating additional space for non-government actors (including micro and small business entrepreneurs and community leaders) to participate in policy influencing platforms and developing and subsequently publishing performance-based measures for the allocation of climate finance are recommended for more effective implementation of Ethiopia’s CRGE climate policy.