Water resources and extreme events in the Awash basin: economic effects and policy implications

High levels of water vulnerability in Ethiopia’s Awash river basin pose risk to continued economic growth in Ethiopia, according to new report published by Vivid Economics on behalf of the Global Green Growth Institute. The Awash basin is a critical region of Ethiopian agricultural production, and home to an estimated 15 million people. However, the economy of the Awash basin is highly exposed to hydrological variability. Despite an overall abundant supply of water, the basin routinely suffers from localized water shortages at specific points in time, and is prone to destructive episodes of flood and drought. The report, Water resources and extreme events in the Awash basin: economic effects and policy implications, seeks to better understand and quantify this critical economic vulnerability, as well as draw out the implications of this for water management policies. The study examines scenarios where agricultural production is effected by water scarcity and extreme hydrological events, and calculates the economic impact to Ethiopia’s agricultural sector as well as the knock-on effects of reductions in the supply of agricultural produce in other sectors of the economy.

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