The Effect of Climate Change on Agricultural Output in Ethiopia

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Globally, the most pressing environmental issue at the moment is thought to be climate change. The resulting effect is a clear deterioration in both overall economic growth and agricultural output. The objective of the study was to look at how climate change might affect Ethiopian agricultural productivity in the short- and long-run between 1990 and 2023. An analysis of the short- and long-run effect of climate change on agricultural output was conducted using the ARDL cointegration approach. For the unit root test, the ADF test was employed. The results of the bound test exhibit that the real agricultural GDP, labour force, average annual rainfall, carbon dioxide emissions, average annual temperature, agricultural land and imports of fertilizer inputs have a stable long-run relationship. The estimated long-run model shows that the country's main component of GDP, agricultural output, is significantly impacted by climate change. The error correction term's coefficient is -0.783, indicating an annual adjustment of nearly 78.3% percent towards long-run equilibrium. The estimated coefficients of the short-run show that mean annual rainfall have a significant effect whereas the average temperature is an insignificant effect on output. Average temperature has a negative effect on agricultural output over the long run, whereas mean annual rainfall has positive effect. These are the two key variables of significance. According to the study, in order to lessen the effects of climate change, the government and other stakeholders should develop specific policies. They should also concentrate on technological innovation that prevents temperature increases from increasing output and the adoption of technology at both the macro and micro levels.