Climate Risk Management in Finnish Development Cooperation - Gaia

Figure 3. Impacts of climate change on various sectors in Ethiopia 78
Layered on top of these, prevailing conditions of poverty, environmental and climatic factors create
a number of pressing challenges for Ethiopia. The depletion of forests – primarily for household fuel
use – threatens species and communities, diminishes tourism potential and reduces other valuable
services forests provide. This example represents the type of current environmental concerns that
could be exacerbated under climate change conditions. However, very little work has been done to
quantify the economic effects of climate variability or extremes in Ethiopia, despite the high profile
and significant impacts that e.g. droughts have had. 79
Potential implications to Finland
In 2008, the value of imports from Ethiopia to Finland was 6.3 million euro and exports to Ethiopia
were 5.5 million euro. The share of imports and exports from and to Ethiopia was close to 0 % from
total Finnish imports and exports. Ethiopia is in 88th place in the list of importing countries to
Finland according to magnitude, 80 indicating that trade between Ethiopia and Finland is currently
very limited. Imports from Ethiopia to Finland include coffee, leather and leather products as well as
textile fabrics and garments. Finland exports to Ethiopia equipment and machinery, paper,
cardboard chemicals and medicine 81 . Finland operates in Ethiopia mainly in terms of development
cooperation. As trade between Finland and Ethiopia is insignificant, climate change impacts on
Ethiopia will have few trade-related implications to Finland despite the severe impacts it will have on
Ethiopia’s own economy and trade.
In development cooperation, Finland should assist Ethiopia in sustainable agriculture methods,
which produce better crop productivity and tolerate better climate change conditions. In addition,
alternative livelihoods should be encouraged and supported to reduce climate change vulnerability
of agricultural livelihoods as well as to support Ethiopia’s accelerated path to development. One of
the existing problems to this is Ethiopia's land tenure system, where the government owns all land
and provides long-term leases to the tenants. This system continues to hamper growth in the
industrial sector as entrepreneurs are unable to use land as collateral for loans. Improving farm
productivity is also challenging as low productivity derives from a handful of reasons: lack of
agricultural inputs, outdated farming methods, deforestation, overgrazing, soil erosion, widespread
78 Conway et al. (2007: 29-30).
79 Crick & Dougherty (2006: 5, 8-9)
80 National Board of Customs, Finland: www.tulli.fi
81 Embassy of Finland in Ethiopia: http://www.finland.org.et/Public/default.aspx?nodeid=31695
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