As the U.S. Falters on Paris Agreement, Ethiopia Sees Opportunity in Renewables

Donald Trump’s June 1st decision to withdraw the United States from the Paris Climate agreement was widely denounced by world leaders, scientists, and advocates around the world as ill-informed. Many believe the decision will significantly jeopardize our ability to succeed in this global effort to limit the planetary warming effects of carbon emissions.

Fortunately for the future health of the planet, and for the health and security of future generations, many other countries, including several of the world’s least developed nations, are taking their commitment to a low-carbon economy very seriously. Ethiopia stands out as a country that sees a low-carbon economy as an opportunity to provide its citizens with energy security and a better standard of living.  

Ethiopia only contributes 0.35 percent of global carbon emissions, so in many ways their effort to cut national emissions by 64% below a business-as-usual case by 2030 seems inconsequential. However, Ethiopia deserves the world’s attention not because of the total megatons of greenhouse gases they plan on mitigating, but because of the country’s commitment to building a system that is not only economically thriving and carbon neutral, but is economically thriving because it is carbon neutral. Recognizing the inherent economic opportunity of a low-carbon economy is fundamental to the success of the Paris agreement, and any country that embraces this principle, especially a country with as little to spare as Ethiopia, deserves recognition and respect. 

Today, Ethiopia is the 14th most populous country in the world with a population of 102 million, and by mid-century it is projected to be the 10th most populous, with a population of between 165 and 175 million. It is also one of the world’s poorest nations. The per capita GDP is less than $1,700, and 72% of Ethiopian’s live on less than $2 a day. Ethiopia, where only 27.2% of residents have access to grid electricity, is also a country struggling with deep energy poverty. The country currently only has a generative capacity of 4,300 megawatts, approximately the equivalent of two hoover dams.

Over the last decade, however, Ethiopia’s economy has grown at an average pace of 11% a year. Under the country’s recent economic plan, that growth is expected to be sustained at 8.4% per year between now and 2030. This level of growth would more than double the country’s economy and, under a business-as-usual scenario, would increase emissions from 150 megatons of CO2 equivalent in 2010 to 400 MtCO2e in 2030. Ethiopia’s INDC limits emissions to 145 MtCO2e by 2030, an overall reduction in emissions despite huge economic growth and a national effort to massively expand grid connectivity and generative capacity. What this means is that from here on out, 100% of Ethiopia’s energy development has to have a net neutral or net negative impact on emissions. To achieve this, Ethiopia will rely heavily on expanding hydropower and grid and off-grid electricity access. Increasing electricity access will significantly reduce the distributed burning of biofuels, and although hydropower does present a number of its own environmental challenges, it provides reliable and carbon neutral baseload power.

Ethiopia estimates that the cost of achieving their current goals of becoming a middle income country by 2025 and achieving 12,000 megawatts of low carbon generative capacity by 2020 will cost approximately $200 billion. The Ethiopian government is investing billions, but the success of the country’s energy transformation will depend heavily on attracting foreign investors. Salini Impregilo, an Italian construction company, has recently completed construction of the Gibe III Dam at a cost of $1.6 billion and is building the Grand Ethiopian Renaissance Dam at a cost of over $3 billion. Combined, these two dams will more than double Ethiopia’s generative capacity. Reykjavik Geothermal has invested three billion into a geothermal facility in Ethiopia’s rift valley, and the French Vergnet Groupe has built sub-Saharan Africa’s largest wind farm in Ashegoda, Ethiopia.

Investments like these can help propel Ethiopia towards an environmentally and economically sustainable future which would not only benefit the people of Ethiopia and the region, but would also be a testament to the fact that a renewable future is possible without jeopardizing economic growth, a concept that is apparently lost on the president of the United States. 

Oscar Serpell

Associate Director of Academic Programming
Oscar Serpell oversees student engagement activities, new student programming, and alumni connections. He also participates in several key research projects at the center and also writes blog posts and policy digests on timely energy policy topics.