Effect of Climate Change on Agricultural Output in Ethiopia
Effect of Climate Change on Agricultural Output in Ethiopia

Summary/Abstract: Currently, climate change is known as the major environmental problem the world face. Its effect is openly reduced agricultural output in particular and economic growth in general. The study aimed to examine the long run and short-run effect of climate change on agricultural output in Ethiopia throughout 1980-2016. The ARDL approach to cointegration was applied to examine the long run and short-run effect of climate change on agricultural output. ADF test was used for the Unit root test. The finding of the bound test shows that there is a stable long-run relationship between RAGDP, labour force, Mean annual rainfall, Average temperature, agriculture land, and fertilizer input import. The estimated long-run model reveals that climate changes have an important effect on the agricultural output which is the main contributor of the overall GDP of the country. The coefficient of the error correction term is -0.738 suggesting about 73.8% percent annual adjustment towards long-run equilibrium. The estimated coefficients of the short-run show that mean annual rainfall have a significant effect but the average temperature is an insignificant effect on output. In the long run, both main variables of interest have a significant effect on agricultural output with a positive effect from mean annual rainfall and negative effect from average temperature. To reduce the effect of climate change the study recommends government and stakeholders need to create specific policies to reduce the effect of climate change especially focus on technological innovation that averts the effect of an increase in temperature that would increase the output and adopting technology at macro and micro level.

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