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2016 | OriginalPaper | Buchkapitel

11. Biofuels, Poverty, Food Security and Growth in Ethiopia: A Computable General Equilibrium Microsimulation Analysis

verfasst von : Gemechis Mersha Debela, Seneshawu Tamiru

Erschienen in: Poverty and Well-Being in East Africa

Verlag: Springer International Publishing

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Abstract

Investments in biofuels are booming globally in response to increasing costs of fuels and growing concern over climate change. The high and often fluctuating fuel prices have frustrated development efforts in Ethiopia. This has prompted policymakers to review energy development strategies and search for mechanisms that minimize dependence on high cost imported fossil oils. An important mechanism identified in this area is substituting fossil fuels with domestically produced biofuels. Currently, investments in biofuels with the aim of producing ethanol and biodiesel are underway in the country. This study investigates the impact of biofuel investments on growth, poverty, and food security in Ethiopia using a dynamic computable general equilibrium (CGE) model linked to the microsimulation (MS) model. The CGE model uses the 2005–06 social accounting matrix (SAM) while the MS model uses the 2004–05 Household Income, Consumption and Expenditure (HICE) survey. The simulation results for the before and after shock periods were fed into the household model using distribution analysis (DAD) software that yielded the FGT poverty indices. The results suggest that biofuel investments provide a new opportunity for enhancing economic growth and reducing poverty. Our results also show the complementarities between ‘biofuels’ and ‘food’ production.

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Vorheriges Kapitel Multidimensional Measure of Poverty in Ethiopia: Factor and Stochastic Dominance Analysis

Nächstes Kapitel Does Energy Resources Spending Mitigate Adverse Effects of CO2 Emissions from Oil Exploration in Africa?

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REST—Relief Society of Tigrai and ORDA—Organization for Rehabilitation and Development in Amhara region.

The five AEZs include the humid lowlands moisture reliable (AEZ1), moisture sufficient highlands (cereal-based) (AEZ2), moisture sufficient highlands (enset-based) (AEZ3), drought prone (Highlands) (AEZ4) and pastoralist (arid lowland plains) (AEZ5) (see EDRI 2009) for details on AEZs).

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Since the consumer is harmed prior to policy change by paying the price equivalent in income, negative EV changes represent welfare (utility) loss as a result of the policy shock. The concept of EV informs that price increases from P ₁ to P ₂ lead to welfare loss by as much as the loss of income equal to EV if the price remained at P ₁.

Though the number of rural households is less in the survey, one point of note is that the number of people each sample rural household represents (weights) is very large compared to urban households.

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Titel: Biofuels, Poverty, Food Security and Growth in Ethiopia: A Computable General Equilibrium Microsimulation Analysis
verfasst von: Gemechis Mersha Debela
Seneshawu Tamiru
Verlag: Springer International Publishing
Buch: Poverty and Well-Being in East Africa
Print ISBN: 978-3-319-30980-4

Electronic ISBN: 978-3-319-30981-1

Copyright-Jahr: 2016
DOI: https://doi.org/10.1007/978-3-319-30981-1_11

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