This review paper aims to gather informative data on the impact of climate extremes on the physical environment, public health, and the livelihoods of people in Ethiopia. The primary sources of data for this review were peer-reviewed journal articles obtained from electronic databases such as PubMed, Central, Scopus, and Web of Science. Globally, the vast majority of households in developing countries depend on wood energy for their daily energy needs. Such consumption trends are expected to remain a common feature of traditional wood energy production and consumption, at least in the short- to medium-terms. This situation increases the demand for firewood and charcoal from the forest. The process of harvesting standing trees for charcoal and fire wood leads to forest degradation. Although woody biomass has the function of energy consumption, and as a source of income for rural villagers and urban poor dwellers practicing agriculture, wood energy generally has low priority in national policies of developing countries. However, unsustainable management and negative environmental consequences in humid and dry forests is derived from the use of fuel wood energy. Still now there is an unsystematic assessment of the economic contribution and environmental consequences of wood energy use, so its significance and consequences have been minimized. This deforestation and forest degradation contributes 1–2.4 Gt CO2e of greenhouse gases, which is 2–7% of global anthropogenic emissions, with global greenhouse gas emissions mostly CO2.