(Washington, DC: World Bank, 2024-11-12) World Bank
Environmental and climate factors play an increasing role in shaping Ethiopia’s economic competitiveness, and this report aims to provide an overview of these shifts. This novel report is a high-level assessment of how certain factors could affect Ethiopia’s economic competitiveness: (i) supply side impacts of climate change and environmental degradation, and (ii) demand-side changes caused by a growing number of sustainability requirements in key export markets, notably sustainability regulations and decisions by international buyers. Concentrating on four sectors that are both critical to Ethiopia’s economy and exposed to environmental and climate factors - coffee, textiles and garments, cut flowers, and aviation - illustrates these shifts. The objective is to identify cross-cutting trends of how sustainability factors affect Ethiopia’s economic competitiveness, but the sector-specific angle helps identify pressing challenges that policy makers in Ethiopia need to address. Note that the selected sectors are used to illustrate the trends described in this report and do not imply a recommended prioritization. Many other sectors essential to Ethiopia’s green transformation are not discussed. Moreover, although the report acknowledges that social and environmental aspects are deeply intertwined, it does not cover topics such as occupational health and safety, inclusion, living wages, and gender rights. The assessment applies a mixed methods approach by drawing on insights from interviews with experts conducted online and in person in Ethiopia (conducted mainly between November 2023 and April 2024), analysis of trade and economic data, and an extensive literature review. This report underlines the macro criticality of green competitiveness for Ethiopia, embedded in the wider economic and political context.
