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Download/16041/16423 Report A thirsty future? Water strategies for Ethiopia’s new development era Helen Parker, Beatrice Mosello, Roger Calow, Maria Quattri, Seifu Kebede and Tena Alamirew, with contributions from Assefa Gudina and Asmamaw Kume August 2016 Overseas Development Institute 203 Blackfriars Road London SE1 8NJ Tel. +44 (0) 20 7922 0300 Fax. +44 (0) 20 7922 0399 E-mail: [email protected] www.odi.org www.odi.org/facebook www.odi.org/twitter Readers are encouraged to reproduce material from ODI Reports for their own publications, as long as they are not being sold commercially. As copyright holder, ODI requests due acknowledgement and a copy of the publication. For online use, we ask readers to link to the original resource on the ODI website. The views presented in this paper are those of the author(s) and do not necessarily represent the views of ODI. © Overseas Development Institute 2016. This work is licensed under a Creative Commons Attribution-NonCommercial Licence (CC BY-NC 4.0). Cover photo: © UNICEF Ethiopia: A boy in the Tigray Region of Ethiopia fetches water from the pond. Contents Acknowledgments 7 About the study 7 Abbreviations 8 Executive Summary 9 1. Water and growth 12 1.1 Water for growth: risks and rewards 12 1.2 More water for more growth? 15 2. Growing pains 18 2.1 A risky water future 18 2.2 Water scarcity: visible impacts, hidden costs 18 3. Economic costs 22 3.1 A thirsty agricultural sector 22 3.2 Growing costs for urban consumers 24 3.3 Managing demand, ensuring supply 26 4. Emerging changes 29 4.1 Institutional change 29 4.2 Technological change 31 5. Recommendations 33 5.1 Priorities for the public sector 33 5.2 Taking action 33 References 36 A thirsty future? 3 Annex 1: Project outline 40 Phase 1: Building adaptive water resources management in Ethiopia (September 2013-October 2015) 40 Phase 2: Making the economic case for water resources management (June 2015-October 2015) 41 Outcomes and outputs 41 List of stakeholders consulted 42 4 ODI Report Figures and boxes Figures Figure 1: Detailed map of Ethiopia, with major water bodies indicated 12 Figure 2: The rise of water crises as a global risk 13 Figure 3: Ethiopia’s GDP growth, 2011-2014 13 Figure 4: Global water withdrawals and consumptive use by sector in 2000 for agriculture, domestic use and industry 16 Figure 5: Water plays a key role in implementation of the GTP II 17 Figure 6: Map of the Awash Basin 19 Figure 7: Water withdrawals for large-scale irrigation schemes in the Awash Basin 23 Figure 8: Adama water utility increasing tariffs over time and rising production costs from 1998 to 2014 25 Figure 9: Costs of production compared with average tariff rate for domestic consumers 25 Figure 10: Proportion of population served in major towns in the Awash Basin 26 Figure 11: Water tariffs in Awash Town 26 Figure 12: Water tariffs in Metehara 27 Figure 13: Cost of water for different consumers in the Awash Basin 28 Boxes Box 1: Water crises: the top threat for economies 14 Box 2: Water and energy use by sector: a global perspective 15 Box 3: ‘Thirsty’ energy or ‘Energy for all?’ 17 Box 4: Water: an economic good 18 Box 5: Water efficiency: myths and realities 24 Box 6: Water for all? 27 Box 7: Water for poverty reduction: water services for the poor 28 A thirsty future? 5 Acknowledgments Thanks are due to Asmamaw Kume and Assefa Gudina Finally, we would like to thank all of the people we (Ministry of Water, Irrigation and Electricity, Ethiopia), interviewed in the course of the project, from ministry Catherine Tovey (World Bank) and Daniel Yeo (Global staff and farmers, to those managing irrigation schemes, Green Growth Institute) for their advice in-country. hydropower dams and urban water supply. Interviewees We would also like to thank Ben Irwin, Arsema Tesfaye gave their time so generously, and engaged in an open and and Hidaya Yusuf (KPMG) for their support throughout constructive manner throughout. the project. All findings, conclusions and errors are the responsibility Peer review was provided by Dr Eva Ludi (Overseas of the authors. Development Institute, UK) and Russell Bishop (New Climate Economy). About the study This report is the final output of the project ‘Building in the face of climate change and other pressures. In phase adaptive water resources management in Ethiopia’, led by 2, a basin-scale study highlighted the impact of poor water the Overseas Development Institute (ODI), in partnership management on different users and uses, including water with the Ethiopian Ministry of Water, Irrigation and pricing for different sectors, and the growing costs of Electricity (MoWIE). The project was funded by the scarcity, competition and pollution. The research focuses Strategic Climate Institutions Programme (SCIP) from on a case study of the Awash River Basin, a ‘hotspot’ which September 2013 to December 2015 (see Annex I). is experiencing increased tension between downstream and The project was commissioned out of growing concern upstream irrigators, and between water for agriculture, for the socio-economic consequences of unconstrained energy and domestic use. The report is intended for water development in Ethiopia. Phase 1 of the project MoWIE and other water sector stakeholders in Ethiopia, aimed to develop a ‘road map’ of the actions and and for those with broader research, development and institutional investments that are required to build long- policy interests in sustainable water resource management. term integrated and adaptive water resources management A thirsty future? 7 Abbreviations AAU Addis Ababa University AWRM Adaptive water resources management CC-WRMA Climate change and water resources management assessment CRGE Climate-Resilient Green Economy AfDB African Development Bank EIWR Ethiopian Institute of Water Resources ETB Ethiopian Birr FAO Food and Agriculture Organization of the United Nations FDRE Federal Democratic Republic of Ethiopia GDP Gross domestic product GoE Government of Ethiopia GTP Growth and Transformation Plan IWRM Integrated water resources management MDGs Millennium Development Goals MoA Ministry of Agriculture MoWIE Ministry of Water, Irrigation and Electricity ODI Overseas Development Institute OWNP One WASH National Programme PSNP Productive Safety Net Programme RBAs River Basin Authorities RWBs Regional Water Bureaus SCIP Strategic Climate Institutions Programme SDGs Sustainable Development Goals UNDP United Nations Development Programme USD US Dollar WASH Water, Sanitation and Hygiene WEF World Economic Forum WLRC Water and Land Resource Centre WRM Water resources management WRMA Water resources management assessment 8 ODI Report Executive Summary • Public and private investments to develop Ethiopia’s water resources have contributed to the Key country’s progress in growth and poverty reduction. messages • For sustainable and broad-based growth, policy-makers must address problems of scarcity, competition and pollution as pressure on water resources increases. • River basin authorities can play a key role, but lack resources and authority to coordinate investments, allocate water, resolve conflicts. • High-level political leadership is essential to ensure future planning within a comprehensive and integrated framework across projects, sectors and regions. • With better, sustainable and inclusive water resources management, Ethiopia can continue to harness its water for the new development era. Ethiopia’s double-digit economic growth is the envy of approximately one third of potential gross domestic many countries in Africa. Growth has also been broad- product (GDP, see Grey and Sadoff, 2006). based. Ethiopia has made significant progress in human Variability also affects livelihoods, as smallholder development indicators including education, health and farmers rely on rainfed production. The effects of the poverty (Lenhardt et al, 2015). However, further gains El Niño related drought, floods and subsequent failed will be dependent on responsible water management: harvests in 2015 and 2016 have created a humanitarian developing and managing water in ways that balance crisis. More than 10 million people require emergency food competing social and economic claims within the frontiers aid and six million people require emergency water services of environmental sustainability. (Fewsnet, 2016). Climate change will likely amplify risks, Water resources help drive development. Water is an since climate models project higher levels of seasonal and essential input for energy, industry and agriculture, while inter-annual variability, and more droughts and more water and electricity for domestic use can catalyse higher floods, over the coming decades (Conway and Schipper, incomes and improved welfare for poorer households. 2011). The government has therefore outlined ambitious water Ethiopia’s investments in water capture, storage and development plans, including small- and large-scale conveyance can help buffer the effects of rainfall volatility irrigation schemes, multipurpose dams to provide and support growth. But they will not be enough to secure hydropower, and water infrastructure to serve growing climate-resilient growth without parallel investments in rural and urban populations. The rapid mobilisation of soft infrastructure – the institutional plumbing of water water is central to the second stage of the government’s resources management. This was the finding of Phase 1 Growth and Transformation Plan (GTP II), which of the ODI/MoWIE-led project, Building Adaptive Water emphasises the importance of increased agricultural Resources Management in Ethiopia (Mosello et al, 2015), production, accelerated industrial growth and poverty that went on to develop a ‘road map’ of the actions reduction. The Grand Ethiopian Renaissance Dam, and institutional investments that are required to build currently under construction, will be the largest dam in adaptive water resources management at national and Africa on completion, and is a powerful symbol of the basin level. country’s ambitions. Our most recent research under Phase 2 of the project Where is the water coming from? Ethiopia has a and reported here looked at the financial and economic relatively generous endowment of water.
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