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Climate compatible productive and decent work
A way out of poverty and the climate trap in Ethiopia
Marek HarsdorffEconomist
Green Jobs Program - International Labor Organisation
Africa Adapt Conference Addis 9-11 March 2011
Economic Social
Ethiopia’s challenge in the 21st century
growth
Poverty
Economic SocialGrowth
Ethiopia’s challenge in the 21st century
Economic challenge Economic Indicators
2004-2010 average
GDP + 11%Inflation 13%Budget deficit as % of GDP
5%
Agriculture (2.5% of land irrigated) account for 46% of GDP and 60% export earnings
2003 draught
-3.5%17.8%8.1%
Social challenge
Farmers, women & youth build economic basis while most vulnearble and affected by shocks
Social indicators 2010Poverty 2$/day 76% PopulationEmployment & livelihoods
80% Agriculture
Population under 15 46% => 25% unempl.Work in informally 92%
India Example: 480 Million people earn livelihood in small farming, animal husbandry, informal forestry…
‘GDP of the Poor’
Share of ‘nature’/ecosystem services in classical GDP 7.3 %
Share of ‘nature’/ecosystem services in “GDP of the Poor” 57 %
Source: GIST’s Green Accounting for Indian States Project, 2002-03 data
Climate-Economy-Employment link
Nature & climate
Farmers, women &
youth
GDP & Poverty reduction
Economic Basis
Employment MDG1
Environment
SocialEconomic
Integrated approach to address CC & development = win-win
Solution?
Employment-led climate compatible
development
5 key areas
• Water harvesting• Irrigation• Floods control etc.
• If 20% of needed infrastructure in developing countries labor-based:>100 million jobs can be created
‘Hard’ adaptation (water) - Employment intensive insvesment in infrastructure
‘Soft’ adaptation in skills training focussing on productive employment
Tigray Project
• Africa 1.9m organic farms
• rest lack agro-ecological knowledge
• techniques available
Micro-insurance (weather index)
Only partly solution not for the poor of the poor
Social protection through public works programs
NREGA India 59 mPSNP Ethiopia 8 m
Employment creation in climate change adaptation
‘Work for insurance’?
Economic diversification - renewable energy
• In SSA 74% do not have access to electricity (561mio)
• 89% of SSA rely on biomass for cooking
• Poor spend 12% income on energy, 4x of developed world
• Out of 34 countries with highest potential 17 in Africa
Economic diversification - pro-poor green value chain development in cut-flower
• 50,000 employed 85% women• 300 birr/month (60$)
• Farm with 400 empl. 10ha • Eco-charcoal 200 sacs
25kg/month = 20,000 birr
• 10% salary & employment creation 1-2%• Reduced vulnerability & energy security
Environment
SocialEconomic
Mainstreaming Employment-led
climate compatible growth in developping
planning and policye.g NAPA>P
Integrated approach to address CC & development = win-win
Poverty
Economic
Natural Environment
& Climate
Social
Droug
ht aff
ects
GDP
Jobless growth
Health, Water & Energy stress
Economy and social well-being depend on natural environment and climate
Growth
Environmental challenges• Global temperature increase between 1,5-6 degrees by2100• By 2080, an increase of 5 to 8% of arid and semi-arid land in
Africa is projected (notably in West Africa: over last 30 years 25% decrease in rainfall)
• Towards the end of the 21st century, projected sea level rise 15-95 centimetres will affect low-lying coastal areas with large populations (e.g. Mozambique)
• The economic lost could amount to 20% of global GDP• The cost of adaptation could amount to at least 5 to 10% of
GDP of Africa (for SSA about $18 billion/year up to 2025)
Economic challenges• 1.6% GDP growth in 2009 => down from 4.9% in 2008 • average growth over 5% since 6 years but no translation into employment growth. • Reason: Growth sustained by natural resource extraction sectors (grew by 10%) but employing
only 10% of labor force (as capital intensive), agriculture which employs over 50% of labor force grew only by 2.5% and makes 23% of GDP (down from 27% 1999)
• As a result: factor accumulation growth no total factor productivity growth (no growth based on human and technological progress)
• Egypt 4.7%, Eritrea 2%, Ethopia 7.5% (non-aricultural growth in service sector), Kenya 2.1%, Lesotho -1%, Malawi 5%, Namibia -0.7%, Nigeria 5.6%, Sudan 3%, Swaziland 0.4%
Africa’s key economic sectors and its current development in 2009:• Agriculture: falling commodity prices less demand => low invest e.g in coffee, cocoa, cotton.• Extraction Industry/ Natural resources/mining: scaled back production due to slow demand• Manufacture /natural resource based industries: reduced capacity (Uganda 15 factories closed in
fish, tobacco and coffee industry)• Tourism: Decline in tourists
Social Challenges: Employment• Agriculture employs 63% in Sub Sahara in 2007 down from 67% in 1998
(33% North Africa down from 36%) (99% working in the informal sector) • Extractive industry employs 10% unchanged (23% North up from 20%) • => primary commodity production based economy • Service 27% up from 22% (44% unchanged North Africa)• Informal sector employs 75% in SSA (SA excluded) and 43% in NA• 7.9% unemployment in Sub Sahara 2008 unchanged over last 10 years
(13%=>10% in North Africa) • 77.4% vulnerable unemployment, 66% self reported unemployment 2002• Active population over 60% = 400 million in 2009 up from 230 m in 1990
highest in World: 70% under 30 (of which 17% unemployed in SSA and 34% in North Africa no change over last 10 years)
• Working poor (those working but earning less than 2$ a day are 82% of working population) in Sub Sahara 2007 (30% in North Africa)
Social Challenges: Health, education…• Africa’s population grew by 2,3% in 2009: 1billion today!• Strong rural-urban migration (housing, education, health, skills
and employment challenge)• 51% in Sub Sahara live with less than 1,25$/day (3% in North
Africa) the same as 1980!• School enrolment in Sub Sahara still low: 74% 2007 (96% in
North Africa)• Life expectancy at birth is over 70 in North Africa and around 50
in Sub Sahara (Malaria is responsible for 91% of all mortalities in Africa)
• Access to secure drinking water: Only 60% • Access to electricity: Only 26%
Source: Ben ten Brink (MNP) presentation at the Workshop: The Economics of the Global Loss of Biological Diversity 5-6 March 2008, Brussels, Belgium. Original source: Pauly
Open Access & Perverse Subsidies are key drivers of the loss of fisheries
Half of wild marine fisheries are fully exploited, with a further quarter already over-exploited
at risk : $ 80-100 billion income from the sector
at risk : est. 27 million jobs
at risk : Health … over a billion rely on fish as their main or sole source of animal protein, especially in developing countries.
Environmental impacts on the Economy
We are fishing down the food web to ever smaller species…
Global Loss of Fisheries…
2048 ?
“2048” End of Commercial Fisheries ?
Environmental impacts on Social challenges
• 89% of SSA relies on biomass for cooking
• In rural areas women carry & search wood for up to 5h/dayGULU
KOTIDO
LIRA
MUKONO
KITGUM
APACMASINDI
MBARARA
PADERARUA
MOROTO
HOIMA
BUGIRI
RAKAIKALANGALA
MPIGI
MUBENDE
KAMULI
KUMI
MASAKA
LUWEERO
KATAKWI
MAYUGE
KIBOGAKIBAALE
NEBBI
SOROTI
KASESE
BUSHENYI
KYENJ OJ O
YUMBE
IGANGA
ADJ UMANI
PALLISA
NAKASONGOLA
KABALE
NTUNGAMO
NAKAPIRIPIRIT
WAKISO
MOYO
TORORO
KAMWENGE
MBALE
SEMBABULE
KAYUNGA
KABAROLE
BUNDIBUGYO
RUKUNGIRI
J INJ A
KAPCHORWA
KANUNGU
BUSIA
SIRONKO
KABERAMAIDO
KISORO
KAMPALA
200 0 200 Kilometers
In Tons per Capita0 - 55 - 25Above 25
N
Fuelwood Stock* Availabilty per District in 2005
“2026” End of Fuel Wood in Uganda?
Environmental impacts on Employment
Environmental impacts on Economy and Society as a whole: Mozambique Cyclone Eline
Mozambique 2000: Limpopo Bridge
•Massive destruction of economic and social capital
• 2 million displaced
• 1,5 mio livelihoods impacted
• 350,000 jobs lost
Environmental challenges have an economic and social dimension!
• Impact on employment in Agriculture, Tourism, Energy, SMEs, Extractive Industry, Waste, Construction…
• Health burden increases, by 2030 90 million more people than today will be exposed to malaria (e.g Zimbabwe)
• The likelihood of civil conflict due to climate change impacts (notably water stress; river borders) could increase by 54%
• By 2020, 75 - 250 million are projected to be exposed to increased water stress due to climate change.
• By 2020, in some countries, yields from rain-fed agriculture could be reduced by up to 50% (food security/malnutrition)
• Unabated climate change: economic cost 6-20% GDP by 2080
Env. Degradation and CC could impede achievement of Development Goals:
• as key African economic sectors (agriculture, natural commodities and tourism) are highly affected; and
• as the lowest social class of the poor is hit hardest
Is there a way out of the Dilemma?
Sustainable use of resources
Employment intensive growth and
benefit from environmental
service
Win for the Economy
Win for theEnvironment
Win for the poor
Growth based on technological progress and
efficiency
Win-win-win the concept of Green Jobs
Turns Challenges into Opportunities
Real GDP at 1990 prices
0
2,000
4,000
6,000
8,000
10,000
1970 1973 1976 1979 1982 1985 1988 1991 1994 1997 2000 2003 2006 2009
U.S
. d
oll
ars
of
19
90
(b
illi
on
s)
Africa
Latin America and the Caribbean
EU15
U.S.
Developed Asia-Pacific economies
Developing Asia-Pacific economies
• Prospects for Africa 2010: Growth 3-5%, but high dependent on export of primary commodities => jobsless growth
• UNECA 2010: If growth is to be sustained and translated into social progress and employment: shift growth poles from extractive industries to high effecient employment intensive poles: agriculture & agro-industry (e.g. organic-) and service (e.g. renewable energy)
• Increase Total Factor Productivity growth (e.g. technology transfer in renewable energy where Africa has a comparative advantage)
Green Jobs translate growth into social progress and employment
Turn Challenges into Opportunities e.g. Fishery
Benefits from Ecological Restoration
• 75% of the population in Sub Sahara Africa depend for their livelihoods on non timber forest products
• Sustainable forest management can:– create massive employment,
provide for livelihoods, – make a significant contribution to
the fight against climate change,– combat desertification and land
degradation.
Turn Challenges into Opportunities e.g. Forests
Natural Conservation creates revenues and job opportunities
Measures
Sectors
Revenues (USD Bio)
Capital Employed (USD Bio)
Direct Employment
Automobiles4 $ 1,882 Bio $2,217 Bio 4.4 Mio
Steel4 $ 530 Bio $ 588 Bio 4.5 Mio
IT Services & Software4
$ 942 Bio $ 179 Bio 5.7 Mio
Protected Area Conservation
$ 4,500 Bio1 $ 125,000 Bio2 1.3 Mio3
1. Balmford et al, 2002, “Economic Reasons for Conserving Wild Nature”, Science 297, estimates Protected Areas could produce goods and services valued at between $ 4,400 billion - $ 5,200 billion per annum
2. Natural Capital : Present Value (PV) of a constant service annuity of $ 5,000 billion per annum, discounted @ 4% per annum3. Estimate of the number employed directly in the maintenance, protection, and oversight of Protected Areas globally 4. Global Business Sector estimates from Global Markets Centre (“GMC”), Deutsche Bank
• Infrastructure to control flash-floods
• If 20% of needed infrastructure in developing countries in water and roads will be labor-based:>100 m jobs in developing countries created
Turn Challenges into Opportunities e.g. Infrastructure adaptation
Economic and labour market impacts on balance
• Net gain in jobs from active climate and environmental policies
• Large potential in developing countries• Only decent + green jobs help to meet the
tripple challengeEnvironmental
SocialEconomic
EU rational to move to 30% target!What is Africa doing about with the highest renewable potential ?
• "If we stick to a 20% cut, Europe is likely to lose the race to compete in the low-carbon world to countries such as China, Japan or the US, all of which are looking to create a more attractive environment for low-carbon investment," the France, German and UK ministers wrote in the Financial Times 15 July 2010. And Africa?
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