Climate Smart

In its announcement of the award of the 2020 Nobel Prize to the World Food Program, the Norwegian Nobel Committee said it wished “to turn the eyes of the world towards millions of people who suffer from or face the threat of hunger.” The issue of food security is increasingly a priority for governments in the developing world, leading to growing attention to sustainable agriculture methods and the potential for blended finance, that is a combination of government and private sector infrastructure funding, to facilitate progress. Our latest policy brief from Climate Policy Lab discusses the role blended finance can bring in promoting sustainable irrigation systems, highlighting the benefits in a case study of Ethiopia’s agricultural sector.

The government of Ethiopia has targeted the agricultural sector for market-led growth and rural transformation to build resilience to climate change and foster economic growth. Agriculture dominates Ethiopia’s economy, representing 40% of GDP and 75% of workforce employment. Only approximately 250,000 hectares of agricultural land out of a potential of 5 million are irrigated in Ethiopia at present. Many small farms grow teff and other rain-fed subsistence crops using manual labor and animals. As part of Ethiopia’s ambition to become a middle-income country by 2030, improvement of efficiency in the agriculture sector is critical.