Ethiopia is the second most populous country in Sub-Saharan Africa with a population of more than 110 million. With over 10 percent growth rate, the Ethiopian economy has been one of the fastest growing economies in the world over the last one and half decades. By any measure agriculture is the dominant economic sector in the country accounting for a sizeable portion of the GDP growth, generating most of the export earnings and employing most of the labour force.

The country has diverse agro-ecological conditions which are suitable for growing both temperate and tropical food and industrial crops. This study has tried to review the trends in environment conditions such as energy use, land cover and land use changes as well as the impact of climate change and the policy responses of the Government of Ethiopia.

The review clearly shows that Ethiopia is still a poor country with more than one fifth of the population living below the national poverty line. Food insecurity continues to be a big challenge for millions of Ethiopians. Despite being the dominant economic sector, agricultural production is characterized as a low-input-low productivity sector.
Land degradation is a very serious problem in Ethiopia due to the fact that many parts of the Ethiopian highlands are mountainous and rugged.

Even though Ethiopia has huge potential for generating renewable energy, the majority of the Ethiopian population still relies on biomass energy sources such as wood, animal dung and crop residues. These environmental challenges are also exacerbated due to the effect of climate change. To mitigate the impact of land degradation, deforestation, and climate change, the Government of Ethiopia has formulated and implemented several policies. The Agricultural Growth Program (AGP), the Productive Safety Net Program (PSNP), the Sustainable Land Management Program (SLM) and the Climate Resilient Green Economy (CRGE) strategy are the major programs being implemented to address these environmental challenges. Indeed, these interventions have made noticeable contributions to curb the challenges.

The study was funded by the “Program of Accompanying Research for Agricultural Innovation” (PARI), which is funded by the German Federal Ministry of Economic Cooperation and Development (BMZ).