Ethiopia’s Nationally Determined Contribution 3.0 (2025-2035)

1.1. GHG EMISSION REDUCTION PROGRESS .............................................................................................................3

1.1.1. Sectoral GHG Emission Reduction Progress................................................................................................. 3

1.2. ADAPTATION PROGRESS ...................................................................................................................................4

1.2.1. Agriculture and Food Security..................................................................................................................... 4

1.2.2. Forestry and Natural Resource Management ............................................................................................ 4

1.2.3. Urban Infrastructure and Housing .............................................................................................................. 5

1.2.4. Energy and Water ....................................................................................................................................... 5

1.2.5. Transport .................................................................................................................................................... 6

1.2.6. Health ......................................................................................................................................................... 6

1.2.7. Climate Information and Early Warning Systems ....................................................................................... 6

1.2.8. Climate Finance .......................................................................................................................................... 7

1.2.9. Implementation Challenges and Lessons .................................................................................................... 8 PART TWO ................................................................................................................................................................10

2.1. NDC 3.0 PREPARATION PROCESS ....................................................................................................................10

2.2. DEPARTURES OF NDC 3.0 ................................................................................................................................10

2.3. GHG EMISSION PROJECTIONS .........................................................................................................................12

2.4. ADAPTATION ..................................................................................................................................................14

2.4.1. Agriculture ................................................................................................................................................ 14

2.4.2. Forest Development .................................................................................................................................. 15

2.4.3. Urban Infrastructure and Housing ............................................................................................................ 15

2.4.4. Energy and Water ..................................................................................................................................... 16

2.4.5. Transport .................................................................................................................................................. 16

2.4.6. Industry and Mining.................................................................................................................................. 16

2.4.7. Education and Health ............................................................................................................................... 16

2.4.8. Equity and Social Inclusion........................................................................................................................ 17

2.4.9. Loss and Damage...................................................................................................................................... 18

2.5. MEANS OF IMPLEMENTATION ........................................................................................................................18

2.5.1. Financing Ethiopia's NDC 3.0 .................................................................................................................... 18

2.5.2. Capacity Building, Technology Transfer and Institutional Coordination .................................................. 19

2.5.3. Carbon Market .......................................................................................................................................... 19

2.6. FAIRNESS AND AMBITION ...............................................................................................................................20

2.6.1. Economic Implications .............................................................................................................................. 20

2.6.2. Unconditional and Conditional Commitments .......................................................................................... 21

2.6.3. Raising Ambition ....................................................................................................................................... 21

2.7. GOVERNANCE FRAMEWORK ...........................................................................................................................21

2.7.1. Institutional Setting for Implementation of NDC 3.0 ............................................................................... 21

2.7.2. Monitoring and Evaluation System and MRV ........................................................................................... 22 II ETHIOPIA NDC 3.0 LISTS OF TABLES Table 1: Federal Government Allocation of Climate Finance (EFY2023/24 and EFY2024/25) ...............................7 Table 2: Total GHG Emission Projections Projection .......................................................................................... 12 Table 3 : Sectoral GHG Emission Projections ...................................................................................................... 13 Table 4 : Sectoral GHG Emission projections and Abatement Potentials ........................................................... 14 Table 5: Targets for Climate-Smart Agriculture, Mechanization, and Ecosystem Restoration ........................... 14 LIST OF FIGURES Figure 1: NDC Mitigation Targets Vs Performance (MtCO2e) ...............................................................................3 Figure 2: Average Emission Reduction share from 2020-2024 ..............................................................................4 Figure 3: Total emissions across various scenarios with the NDC-aligned simulation from the LT-LEDS............ 12 Figure 4: Real GDP growth rate.......................................................................................................................... 20 Figure 5: Ethiopia CRGE governance .................................................................................................................. 22 Figure 6: Ethiopia’s NDC 3.0 and Climate Actions MRV and M&E framework ................................................... 23 ETHIOPIA NDC 3.0 III LIST OF ABBREVIATIONS BAU Business-As-Usual CO₂e Carbon Dioxide Equivalent CRGE Climate Resilient Green Economy EDRMC Ethiopian Disaster Risk Management Commission ETB Ethiopian Birr GDP Gross Domestic Product GHG Greenhouse Gas GLI Green Legacy Initiative IKI International Climate Initiative LT-EDS Long-Term Low Emission Development Strategy LUCF Land Use and Forestry LULUCF Land Use, Land-Use Change and Forestry MoA Ministry of Agriculture MoF Ministry of Finance MoH Ministry of Health MoI Ministry of Industry MoPD Ministry of Planning and Development MoUI Ministry of Urban and Infrastructure MoWE Ministry of Water and Energy MRV Monitoring, Reporting and Verification NAP National Adaptation Plan NDC Nationally Determined Contribution NDCP NDC Partnership P4G Partnering for Green Growth and the Global Goals 2030 SDG Sustainable Development Goal UNFCCC United Nations Framework Convention on Climate Change MtCO₂e Million Tonnes of Carbon Dioxide Equivalent 10YDP Ten-Year Development Plan ETHIOPIA NDC 3.0 1 INTRODUCTION Ethiopia is now advancing to the next ambitious above the conditional path requiring stronger plan: NDC 3.0, building on the commendable international support. achievements of its Updated NDC The LUCF delivered most reductions via the implementation (2021-2025). Green Legacy Initiative and improved forest These achievements were driven by the management, investments in renewable homegrown Green Legacy Initiative, energy and clean transport accelerated: a encompassing massive restoration and predominantly renewable power mix and an EV afforestation programs, accelerated renewable push (including a ban on new ICE vehicle energy production, and electrification of the imports) reshaped fleets and charging. transport sector. Ethiopia also established the Adaptation scaled through climate-smart Green Legacy and Degraded Landscapes agriculture, small-scale irrigation, resilient Restoration Special Fund, financed through urban services, and early-warning systems. annual federal budget allocations and Progress was underpinned by domestic and supported by a mandatory contribution of 0.5 external finance, but international climate to 1.0% of Ethiopia’s total domestic financial finance and private capital remained modest, resources. underscoring the need for concessional, blended finance and stronger MRV. These milestones unfolded against a backdrop of acute climate risks and complex socio- Building on these achievements and lessons, economic pressures. Recurrent droughts, but also recognizing persistent climate and erratic rainfall, and rising temperatures socio-economic challenges, Ethiopia’s NDC 3.0 intensified vulnerabilities across climate- preparation is therefore timely and practical. sensitive systems, particularly rain-fed First, it enables Ethiopia to consolidate gains agriculture and pastoral livelihoods. Floods and from 2021–2025 and align near-term actions climate-related shocks imposed additional with its net-zero 2050 vision under the Long- strain on infrastructure and social services, Term Low-Emissions Development Strategy while global disruptions related to COVID-19 (LT-LEDS) and the Ten-Year Development Plan and geopolitical tensions raised prices, (10YDP). Second, consistent with the Paris disrupted supply chains, constrained fiscal Agreement’s progression and highest-possible- space, and complicated project delivery. These ambition, it provides a vehicle to raise ambition intersecting challenges underscored the where feasible and sharpen sector priorities. centrality of climate resilience to Ethiopia’s Third, it addresses what is learnt from putting development pathway and informed the interventions into investable and framing of the NDC 3.0 (2025–2035). implementable action: the importance of clearly marking climate budgets, improving data Despite all these complex challenging, Ethiopia systems, better coordinating institutions, and advanced implementation of its updated NDC having investment-ready project pipelines that across mitigation, adaptation, and enabling can attract large and programmatic financing. measures. Economy-wide emissions levels between 2020–2025 tracked well below BAU The preparation of NDC 3.0 followed a and the unconditional pathway, though slightly structured, evidence-based process: MINISTRY OF PLANNING AND DEVELOPMENT 2 ETHIOPIA NDC 3.0 extensive document review and data departures, updated GHG projections under collection, the stocktaking of the updated BAU, unconditional, and conditional NDC implementation, broader stakeholder scenarios and targets; the adaptation consultations, and updated modelling with interventions across sectors (including equity the Ethiopian Green Economy Model, and social inclusion, and loss and damage); calibrated to the latest inputs. and the means of implementation; finance, capacity building, technology transfer and Emissions were estimated per the IPCC 2006 carbon markets. Guidelines; sector pathways were vetted It also discusses fairness and ambition, with sector ministries; and adaptation economic implications, the explicit priorities were drawn from several sector- conditional and unconditional contributions, based vulnerability assessments, the National and the governance framework that Adaptation Plan of Ethiopia (NAP-ETH), and the integrates climate policy with national stocktaking of the Updated NDC development planning. Together, these implementation. sections provide a coherent pathway to scale mitigation and adaptation, strengthen Financing needs for NDC 3.0 are quantified resilience, and align Ethiopia’s development and estimated for unconditional and trajectory with the objectives of the Paris conditional interventions. The remainder of Agreement. this document sets out the NDC 3.0 for 2025–2035: the preparation process and MINISTRY OF PLANNING AND DEVELOPMENT ETHIOPIA NDC 3.0 3 STOCKTAKING OF UPDATED NDC IMPLEMENTATION (2020-2025)

1.1. GHG Emission campaigns under the GLI have transformed the landscape; carbon sequestration increased Reduction Progress from 34.6 MtCO₂e in 2020 to nearly 50 MtCO₂e Ethiopia's actual GHG emissions averaged at in 2024 as tree planting and sustainable forest 273.5 MtCO₂e during 2020–2023, which is well management created a growing carbon sink. On below the BAU projection of 318.8 MtCO₂e. average, about 10.96 MtCO₂e per year of This positive trend is consistent with the emissions were avoided by preventing successful implementation of Ethiopia’s deforestation and forest degradation during mitigation policies, which are already 2020–2024. As a result, the forest sector contributing to a slower emissions growth. contributed about 79.1 % of total emission Moreover, actual emissions remained well reductions achieved, followed by agriculture below the unconditional NDC pathway, which (17.3%) and other sectors (energy, industry, averaged 309.8 MtCO₂e, showing that Ethiopia waste, and transport collectively 3.6%) (Figure is making strong progress using its own 2). domestic resources. However, actual emissions slightly exceeded the conditional NDC The energy sector also saw notable progress pathway average of 268.8 MtCO₂e, suggesting through Ethiopia’s renewable energy that international support will be critical for expansion. The country continued to generate closing this gap and achieving deeper over 95% of its electricity from renewable reductions. sources (primarily hydropower, with growing solar and wind), enabling cleaner economic Figure 1: NDC Mitigation Targets Vs Performance growth. The country’s installed electric (MtCO2e) 262.5 280.6 273.2 276.9 275.1 265.4 283.3 252.2 273.5 268.8 capacity increased from 4413 MW in 2020 to 299.6 309.1 313.1 317.2 309.8 302.9 316.4 323.9 332.0 318.8 7910 MW in 2025, about 45% of the 16058MW target set by 2030. 2020 2021 2022 2023 AVERAGE Total Annual CO2e Emissions Perfromance A bold new Electric Vehicle (EV) initiative was NDC Conditional (including unconditional) projection NDC Unconditional projection launched, positioning Ethiopia as a leader in Business As Usual/BAU projection Africa’s green mobility, and Ethiopia became the first African Country to ban imports of new

1.1.1. Sectoral GHG Emission internal combustion engine cars. By 2024, over Reduction Progress 100,000 EVs were on the roads and about 200 The forestry sector delivered the most charging stations were operational nationwide. significant emissions reductions. By 2023, A strategy is in place to reach 500,000 EVs and Ethiopia’s forest cover reached 23.6%, moving 2,176 charging stations by 2033, which will closer to the national goal of 30% by 2030. substantially cut urban air pollution and Massive afforestation and reforestation transport emissions. MINISTRY OF PLANNING AND DEVELOPMENT 4 ETHIOPIA NDC 3.0 The agriculture sector contributed to advancements in agricultural productivity and mitigation through climate-smart practices resilience were recorded through the that also enhanced yields. Overall, these efforts widespread adoption of drought-tolerant crop put Ethiopia on a lower emissions trajectory varieties and improved farming practices. than anticipated, demonstrating the country’s commitment to green growth and sustainable By 2025, over 17.9 million hectares of rain-fed development. cropland were cultivated using climate-smart agriculture, an increase from 7.94 million Figure 2: Average Emission Reduction share from 2020- hectares in 2018. 2024 Forest Net Emissions 0.3% 1.2% 2.1% Reduction (%) Besides, livestock productivity showed 5.8% 5.6% Emissions reduction from improvement. The average daily milk yield per NRM (%) 5.9% cow rose from 6.15 liters in 2018 to 7.94 liters Emissions reduction from managed soil (%) in 2025. This improvement was attributed to 79.2% Emissions reduction from the introduction of animal breeds and the livestock (%) optimization of feeding regimes, including Emission reduction from the transport sector (%) balanced rations and improved forage quality.

1.2. Adaptation Progress In addition, veterinary service coverage is expanded to 93% nationwide by 2025, ensuring Ethiopia undertook strategic approaches to timely disease prevention and health enhance its resilience to climate-related shocks management across livestock populations. between 2020 and 2025, with a particular emphasis on safeguarding vulnerable Small-scale irrigation farming experienced a livelihoods and reinforcing critical substantial boost in output, with total infrastructure. This comprehensive approach production increasing from 8.0 million quintals involved targeted investment efforts across key to 27.5 million quintals. Collectively, these sectors such as agriculture, water developments have enhanced the resilience of management, energy, transport, and urban food production systems, enabling to development. As a result, the country achieved withstand recurrent droughts, floods, and tangible progress in improving adaptive climatic shocks. capacity, reducing climate vulnerability, and promoting sustainable development. 1.2.2. Forestry and Natural Resource Management

1.2.1. Agriculture and Food Ethiopia implemented Participatory Forest Security Management (PFM) as a key strategy to involve In the agriculture sector, climate-smart local communities in the sustainable agriculture practices significantly expanded management of over 2 million hectares of during the updated NDC implementation forests. These efforts have helped reduce period. The productivity of major food crops deforestation and forest degradation while rose from 25 quintals per hectare in 2018 to 32 offering livelihood benefits to participating quintals per hectare by 2025. Significant communities. MINISTRY OF PLANNING AND DEVELOPMENT ETHIOPIA NDC 3.0 5 Ethiopia has also implemented several other climate- adaptive infrastructure was evident in forests and natural resource related adaptation the extension of all-weather roads and bridges actions with mitigation co-benefits. These designed to resist extreme climate events from include efforts to protect forest ecosystems 144,000 kilometers in 2018 to 169,450 from fire, pests, and disease, while enhancing kilometers. their role in supporting livelihoods and the national economy. Moreover, the number of climate-resilient waste disposal sites rose from 6 in 2018 to 31 For instance, between 2019 and 2025, 2.24 by 2025, thereby reducing both pollution and million green jobs were created, and 174.6 flood vulnerability. These measures have million USD was earned from the export of begun to strengthen the resilience of cities, forest and non-timber forest products. urban settlements, offering enhanced protection to vulnerable communities against A total of 2.98 million hectares of natural forest climate-induced hazards such as floods, were conserved under sustainable forest waterborne diseases, and infrastructure management. These measures help to build failure. ecosystem resilience and provide sustainable income sources for communities vulnerable to 1.2.4. Energy and Water climate change. By 2025, over 580,000 off-grid solar systems were installed countrywide, enhancing access

1.2.3. Urban Infrastructure to clean and sustainable energy in remote areas and Housing of the country to address underserved Ethiopia has been implementing the Urban communities. This large-scale expansion Corridor Development initiative as a key enabled electricity access for approximately 1.5 transformative urban initiative aimed at million rural residents, primarily through solar modernizing the cities through improved home systems designed to operate infrastructure, enhanced green spaces, and independently of the national grid. better connectivity. The expansion of off-grid renewable energy Investments in affordable housing, infrastructure catalyzed the creation of an neighborhood renewal, and essential urban estimated 190,000 green jobs, with services have improved living conditions in employment opportunities concentrated in urban areas. For instance, between 2018 and solar technology supply chains, installation and 2024, the proportion of urban residents maintenance services, and agriculture-related residing in slums decreased from 74% to 54%. value addition. This reduction is attributed to comprehensive urban development programs that enhanced In parallel, Ethiopia invested in the housing standards and introduced climate- modernization and expansion of its hydro- resilient infrastructure, such as improved meteorological services, aiming to improve drainage systems, reliable water supply, and climate risk forecasting and early warning improved sanitation facilities in underserved systems. communities. By 2024, the expansion of MINISTRY OF PLANNING AND DEVELOPMENT 6 ETHIOPIA NDC 3.0 Access to improved water sources has (CHEPs). These programs are designed to increased from 30% in 2000 to 60% by 2023, yet deliver essential health services at the rural–urban disparities remain to be grassroots level, particularly in regions most addressed. The water supply sector has made vulnerable to climate-related hazards. The positive progress, providing drinking water to CHEPs have focused on mitigating the impact 76 million people, with close to 56 million rural of diseases that are exacerbated by climate and 20 million urban by 2023. Access has been extreme events, including malaria, cholera, and expanded to 17 woredas in vulnerable regions. other waterborne diseases. Schools and hospitals now have 40% clean drinking water coverage in 2025, reflecting a 1.2.7. Climate Information and rising focus on institutional access. These Early Warning Systems successes demonstrate the country's dedication Ethiopia has made notable progress in modernizing its meteorological stations. The to water accessibility, although universal share of modern meteorological stations has coverage remains difficult, especially in reached 50.4%, reflecting a substantial vulnerable and drought-affected areas. upgrade in climate data collection capabilities

1.2.5. Transport across the country. This modernization has In the transport sector, the integration of directly contributed to a notable improvement in climate resilience into the design and the accuracy of weather forecasts, which now maintenance of roads and railways has become stands at 87.8%. a cornerstone of sustainable infrastructure User satisfaction with meteorological services development. Recognizing the increasing has risen to 79%, indicating growing public frequency and severity of climate-related trust and engagement with climate-related shocks, the government has adopted adaptive information. This progress is especially road infrastructure and environmental impactful for Ethiopia’s agricultural sector, strategies to safeguard critical transport assets. which remains highly vulnerable to climate These approaches protected vital supply routes change and variability. from disruption during extreme weather events. To complement these approaches, the The advanced systems also enable farming and country has implemented reforestation along pastoral communities to anticipate droughts major highways to stabilize surrounding soil and floods, which affect an estimated 1.5 and reduce erosion, minimize the risk of million people annually and can cause damage landslides in hilly and mountainous regions, exceeding USD 200 million to infrastructure and enhance biodiversity and carbon and cropland. sequestration. In addition, the accessibility and utilization of

1.2.6. Health the information systems strengthen the In Ethiopia, the health sector has taken capacity for farmers, pastoralists, and disaster proactive steps to address the growing threat management agencies to make informed of climate-sensitive diseases by launching decisions, reducing risks to livelihoods and food Community Health Extension Programs security. MINISTRY OF PLANNING AND DEVELOPMENT ETHIOPIA NDC 3.0 7

1.2.8. Climate Finance The Ethiopian federal government's commitment Mobilizing sufficient resources for climate action to climate action is quantitatively reflected in its remains a critical challenge for implementation. budget allocations. Between 2020 and 2025, Ethiopia has For the fiscal years 2023/24 and 2024/25, the predominantly relied on domestic financing, with government has allocated 0.8% and 0.6% of its international support remaining limited. A annual total budget1 respectively, specifically for considerable portion of domestic finance was mitigation and adaptation efforts. While the channeled into climate-related initiatives, notably percentage illustrates a commitment to in agriculture, rural development, renewable addressing climate change, it represents only a energy, afforestation, and irrigation. fraction of the overall domestic financing landscape (Table 1). Table 1: Federal Government Allocation of Climate Finance (EFY2023/24 and EFY2024/25) 2023/24 (in Million ETB) 2024/25 (in Million ETB) Description Mitigation Adaptation Mitigation Adaptation Agricultural and Rural Development 220.1 921.1 170.2 1,740.5 Ethiopian Forestry Development 191.3 15.8 150.8 635.7 Environmental Protection Authority 28.8 - - 220.6 Water Resources and Energy 67.7 2,641.2 98.1 4,367.8 Transport and Communication 34.1 32.2 64.5 20.9 Urban Development and Construction - 436.3 - - Social/Health- Cross cutting - 1,672.7 - 3,799.4 Total 542.0 5,719.4 483.5 10,785.0 Source: Ministry of Finance (2025) Importantly, the federal government’s annually for mitigation and adaptation actions allocations do not encompass the contributions from external sources. However, this amount from regional governments and local represents only 7% of the country's estimated communities. Initiatives such as the Green climate finance needs, which stand at USD 25.3 Legacy have seen substantial community billion per year. This funding constitutes less participation and financial input, which than 2% of Ethiopia's GDP during the same collectively account for over half of Ethiopia's period, highlighting a significant financing gap. domestic climate funding. This grassroots involvement is crucial, as it not only enhances Ethiopia attracted more climate finance for financial resources but also fosters local adaptation projects (56%) compared to ownership and sustainability of climate mitigation projects (38%). This trend contrasts initiatives. with the global average, where mitigation efforts typically receive a far larger share (90%). Moreover, from 2021-2025, an average of USD The heavy reliance on grants and concessional 1.7 billion investments were committed financing for mitigation projects reflects both 1 1 Ethiopia has established ‘The Green Legacy and Degraded The Special Fund is primarily financed through annual federal 1Ethiopia has established ‘The Green Legacy and Degraded Landscapes Restoration Special Fund’ by Proclamation No. 1361/2024 to scale up best practices of the Green Legacy Initiative to Landscapes Restoration Special Fund’ by Proclamation No. budget allocations, with a mandatory contribution of 0.5 percent restore degraded landscapes and ecosystem services and manage and conserve forests and biodiversity resources, and thereby, enhance climate resilience and economic development. The 1361/2024 to scale up best practices of the Green Legacy Initiative to 1.0 percent of Ethiopia’s total domestic financial resources. The Special Fund is primarily financed through annual federal budget allocations, with a mandatory contribution of 0.5 percent to 1.0 percent of Ethiopia’s total domestic financial resources. The to restore degraded landscapes and ecosystem services and Fund will mobilize additional resources from development Fund will mobilize additional resources from development partners, civil society organizations, and private sector entities manage and conserve forests and biodiversity resources, and partners, civil society organizations, and private sector entities thereby, enhance climate resilience and economic development. MINISTRY OF PLANNING AND DEVELOPMENT 8 ETHIOPIA NDC 3.0 actual and perceived high investment risks. 1.2.9. Implementation Challenges The attracted climate finance in Ethiopia is and Lessons predominantly characterized by international → Limited External Finance Flow: Ethiopia public financiers, accounting for 92% of the has received insufficient and inconsistent total funding. In contrast, private finance from international finance flow, coupled with both domestic and international investors geopolitical dynamics that have affected remains at just 8%. Furthermore, a significant the implementation of climate actions portion of public climate financing is delivered conditioned upon external resources for through grants, which make up 70% of the total, the updated NDC implementation. emphasizing a reliance on non-repayable → Limited Technical and Institutional funding sources. Capacity: During the updated NDC In terms of sectoral distribution, agriculture, implementation period, constraints in forestry, and other land use (AFOLU) received technical expertise and institutional 29% (average USD 486 million) of climate capacity hindered the development of finance, which is disproportionately low financially viable climate project pipelines compared to its contribution to emissions (83 and bankable project proposals. %). Ethiopia's potential to accessing and utilizing climate finance has been severely → Limited Private Sector Engagement: constrained by a confluence of global and Private sector participation has also been regional crises since 2021. limited during the updated NDC period. This has been attributed to a weak The lingering impacts of COVID-19 and the pipeline of bankable projects, perceived global tensions inflated project costs, disrupted high risks for adaptation investments, supply chains, and reduced public fiscal space. limited capacity of the private sector, and Simultaneously, a historic drought escalated global trade and investment disruption humanitarian needs, diverting resources away due to COVID-19 and geopolitical from vital climate investments precisely when tensions, among others. they were most critical. → Lack of Comprehensive Data and MRV While Ethiopia is strengthening its system for Systems: Incomplete and low-quality data tracking climate flows and tagging climate- have also hindered the tracking of related expenditures in the national budget, mitigation and adaptation intervention significant gaps remain. performance and progress results of the Incomplete data, delayed reporting, and a lack updated NDC. Additionally, the absence of of disaggregate details on sub-national a robust, integrated MRV (Monitoring, spending obscure a clear view of total climate Reporting, and Verification) system has finance. Strengthening these Monitoring, compromised the tracking and Reporting, and Verification (MRV) systems is transparency of GHG emissions levels. essential not just for transparency, but to → Lack of Institutional Coordination: accelerate project preparation and attract Institutional fragmentation, overlapping targeted investment. MINISTRY OF PLANNING AND DEVELOPMENT ETHIOPIA NDC 3.0 9 mandates, and weak coordination across robust data infrastructures is essential to ministries, and at lower levels of enable transparency, evidence-based administrations often led to duplication policy revision, decision-making, and and misaligned of efforts. financing. Furthermore, strengthening the CRGE governance framework across → Key Lessons Learned: Key lessons learned sectors and administrative levels is during the implementation of the updated essential to improve coordination efforts. NDC process include the critical Finally, the need for catalyzing and importance of inclusive stakeholder encouraging private sector investment in engagement to ensure broad ownership climate mitigation and adaptation actions and alignment across sectors and is vital to mobilize additional resources, governance levels. Additionally, the need accelerate innovation, and enhance long- for reliable, accessible, and integrated term sustainability. MRV and M&E systems supported by MINISTRY OF PLANNING AND DEVELOPMENT 10 ETHIOPIA NDC 3.0 NATIONALLY DETERMINED CONTRIBUTION 3.0

2.1. NDC 3.0 Preparation 2.2. Departures of NDC 3.0 Process Ethiopia’s NDC 3.0 has been formulated to Ethiopia's NDC 3.0 preparation process has carry forward the basis, objectives, and passed through several stages, including data strategic directions of the 10YDP, LT-LEDS, and collection, comprehensive document review, the updated NDC (2020-2030), and build on the stakeholder consultations, stocktaking of the findings of the implementation of the updated NDC (2021), stocktaking of the updated NDC model development, and validations. In implementations, which include challenges addition, GHG emissions have been estimated faced and lessons drawn from the using the most recent IPCC 2006 guideline. implementation. Nevertheless, the NDC 3.0 has The GHG Enhancement process also employed its own distinguishing features, including the Ethiopia’s Green Economy Model (GEM) following. approach with the latest available information and embedded the revised macro and sector- I. Dedicated Establishment of level mitigation and adaptation intervention Domestic Financing options, and targets vetted with the relevant line ministries and stakeholders for GHG Ethiopia has established ‘The Green Legacy and emission projections pathway up to 2035. This Degraded Landscapes Restoration Special is in line with Ethiopia's Ten-Year Development Fund’ by Proclamation No. 1361/2024 to scale Plan and its Long-Term Low Emission and up best practices of the Green Legacy Initiative Climate Resilient Strategy. Adaptation to restore degraded landscapes and ecosystem intervention targets are also based on several services and manage and conserve forests and sector-based vulnerability assessments, the biodiversity resources, and thereby, enhance National Adaptation Plan of Ethiopia (NAP- climate resilience and economic development. ETH), and the stocktaking of the Updated NDC The Special Fund is primarily financed through implementation. Moreover, the financing annual federal budget allocations, with a needs are estimated for mitigation and mandatory contribution of 0.5 percent to 1.0 adaptation interventions and further percent of Ethiopia’s total domestic financial disaggregated into unconditional and resources. The Fund will mobilize additional conditional financing needs. In addition, resources from development partners, civil comprehensive assessments of institutional society organizations, and private sector capacity needs, gender and social inclusion, entities. and stocktaking exercises were conducted to inform the preparation of NDC 3.0. MINISTRY OF PLANNING AND DEVELOPMENT ETHIOPIA NDC 3.0 11 II. Policy Coherence and IV. Integration of Carbon Markets Alignment and Loss & Damage Ethiopia’s NDC 3.0 marks a decisive step forward Ethiopia has taken a key step by designing its in aligning national climate ambition with the carbon market strategy and explicitly integrating country’s 10YDP and Long-Term Low Emission it with NDC 3.0, positioning the country’s and Climate Resilient Development Strategy. potential to mobilize climate finance, incentivize Building on a decade of sustained leadership, low-emission development, and strengthen the Ethiopia continues to stand out as a implementation of NDC 3.0, and its Long-Term Low Emission and Climate Resilient Development Strategy. Loss and Damage is also integrated into the NDC 3.0 and represented as shock to economic and physical systems that translate into tangible socio-economic losses. These impacts, encompassing extreme weather events, and gradual temperature shifts, directly affect infrastructure, productive capital, and key service sectors. Therefore, loss and damage under NDC 3.0 captures both the immediate destruction of assets and the longer-term economic consequences of climate-related hazards, allowing for an assessment of vulnerability, exposure, and resilience. V. Disaggregation of Unconditional and Conditional Commitments III. Equity and Social Inclusion Ethiopia’s NDC 3.0 also advances transparency Under NDC 3.0, Ethiopia places renewed and clarity by disaggregating unconditional and emphasis on equity and social inclusion as central conditional commitments for GHG emissions pillars of its climate action agenda. Building on its reduction targets and financing needs from commitment to leave no one behind, the NDC 3.0 domestic resources and international support for integrates gender considerations, the needs of the NDC 3.0 implementation, which enables a children and youth, and other cross-cutting clearer definition of the government’s dimensions to ensure that low-emission, climate- unconditional commitments and external resilient development pathways are inclusive and support. just. MINISTRY OF PLANNING AND DEVELOPMENT 12 ETHIOPIA NDC 3.0 past 6 years and reached 23.6%, sequestered VI. Governance Framework- significant carbon, and offsetting a substantial Revitalization of the CRGE volume of Emissions during the same period. As Ethiopia embarks on NDC 3.0, the The NDC 3.0 commits to reducing greenhouse revitalization of its climate governance framework is both timely and strategic, reflecting gas (GHG) emissions by 70.3% by 2035, the provisions of Proclamation 1263/2021 on the compared to a revised business-as-usual powers and duties of executive organs and the pathway, a slight increase from the earlier emerging policy imperative to integrate climate 68.8% target. In the unconditional scenario, policy with development planning. emissions are lower than BAU, about 201.9 million tons in 2025, declining further to 141.9 Strengthening institutional coordination under million tons in 2030, and 140.8 million tons in this new governance and coordination 2035. As indicated in Table 2, the percentage framework enhances Ethiopia’s capacity to reduction in total annual CO2e emissions for achieve resilient, low-emission growth by the unconditional and conditional scenarios ensuring the effective implementation of the compared to BAU grows over time. NDC 3.0 and sustaining flagship national initiatives such as the Green Legacy. In line with Table 2: Total GHG Emission Projections the new CRGE governance architecture, the Projection Ministry of Planning and Development (MoPD) is GHG Emissions Sectoral % vs (MtCO2e) mandated to coordinate sectoral government Emissions BAU 2025 2030 2035 organs to implement and manage a climate- BAU 210.4 176.4 237.6 resilient green development strategy within the Unconditional 201.9 141.9 140.8 -40.7% national development planning framework. Conditional 188.4 85.7 70.7 -70.3% Revitalizing and reorienting the CRGE governance Accordingly, the unconditional scenario will GHG Emissions % vs and coordination structure under NDC 3.0 achieve a 40.7% reduction (MtCO2e) in GHG emissionsBAU enables a more consistent and integrated from BAU, while the conditional scenario will approach, anchored in a unified coordination achieve a 70.3% reduction by 2035. This chaired by MoPD and co-chaired by the Ministry outcome highlights that Ethiopia’s NDC 3.0 of Finance (MoF). Conditional scenario closely aligns with the country’s Net Zero Emission pathway, showing that stronger climate actions can put Ethiopia

2.3. GHG Emission on track to meet its long-term goals (Figure 3) Projections Figure 3: Total emissions across various scenarios with Ethiopia’s GHG emissions level under the BAU the NDC-aligned simulation from the LT-LEDS scenario remains high and will reach 237.5 MtCO2eq by 2035. This scenario already accounts Ethiopia’s massive GLI initiatives, including large-scale restoration and afforestation, and clean energy developments between 2019-2024. For example, Ethiopian forest coverage has increased by 6.4% in the MINISTRY OF PLANNING AND DEVELOPMENT ETHIOPIA NDC 3.0 13 The emission projections show a sharp decoupling reduction of 70.3 % below BAU by 2035. between the Business-As-Usual (BAU) pathway and Ethiopia’s Enhanced GHG Emission targets The largest absolute mitigation gains occur in the over time. land use, land-use change, and forestry (LUCF) sector, which shifts from a net sink of -5.3 MtCO₂e Total GHG emissions under BAU are projected to under BAU in 2025 to more than -155.3 MtCO₂e rise to 238 MtCO₂e in 2035, whereas the by 2035 under the target scenario, accounting for mitigation interventions bring these totals down over 77% of the total mitigation effort in that year to 71 MtCO₂e by 2035. This represents an overall (Table 3). Table 3 : Sectoral GHG Emission Projections Sector BAU (MtCO2e) Emission Target ( (MtCO2e) 2025 2030 2035 2025 2030 2035 LUCF -5.3 -61.0 -26.6 -19.2 -133.7 -155.3 Livestock 168.1 170.2 169.8 165.7 166.4 160.3 Energy 19.0 25.7 34.5 14.7 14.6 13.7 Managed soils 8.7 10.3 11.0 8.3 9.5 9.6 IPPU 10.8 21.1 37.5 10.6 20.5 33.6 Waste 9.1 10.2 11.4 8.4 8.4 8.7 Total (Mt CO2 eq) 210.4 176.4 237.6 188.4 85.7 70.7 The overall emission reduction target reaches as massive investment in renewable energy and high as 167.0 MtCO2e by 2035, with LUCF takes transition towards clean transport underpinned the lion share of the reduction potential of 77.1% by the Electric Vehicle (EV) Initiative: Ethiopia from the total reduction by 2035 (Table 4). became the first country to ban new Internal Combustion Engine (ICE) vehicle imports and Accordingly, the LUCF sector contributes advanced its NDC by promoting EV adoption 128.65MtCO2e by 2035, largely attributed to across transport sectors. restoration and reforestation targets set by 2030 aligned with the 2050 net-zero emission ambition. The livestock sector also exhibits the third largest mitigation abatement (Table 4) while it remains This indicates that forestry, afforestation, and the largest emitter during the same period (Table land restoration will remain central pillars of 3). It contributes 6% over the same period. Ethiopia’s mitigation strategy. The sector contribution to total mitigation rises from 64.6% Managed soils, IPPU, and waste together account in 2025 to over 77.1% in 2035. While LUCF for less than 5% of mitigation after 2030. This provides the largest share of Ethiopia’s mitigation shows that while other sectors provide modest potential, Ethiopia’s NDC 3.0 aims to diversify shares of overall abatement, land-based carbon approaches with transformative measures in sequestration and energy sector decarbonization energy, transport, agriculture, and IPPU, thereby serve as the main drivers of Ethiopia's NDC 3.0 safeguarding long-term decarbonization. mitigation abatement. Energy plays a key role, contributing to 12.5% by 2035. It remains the second largest potential for emission reduction largely due to Ethiopia's MINISTRY OF PLANNING AND DEVELOPMENT 14 ETHIOPIA NDC 3.0 Table 4 : Sectoral GHG Emission projections and Abatement Potentials BAU (MtCO2e) Abatement Potential (MtCO2e) Abatement Contribution (%) Sector 2025 2030 2035 2025 2030 2035 2025 2030 2035 LUCF -5.3 -61.0 -26.6 14.0 72.7 128.7 63.6% 80.1% 77.1% Livestock 168.1 170.2 169.8 2.5 3.8 9.5 11.2% 4.2% 5.7% Energy 19.0 25.7 34.5 4.3 11.1 20.8 19.7% 12.3% 12.5% Managed soils 8.7 10.3 11.0 0.3 0.8 1.4 1.5% 0.9% 0.8% IPPU 10.8 21.1 37.5 0.2 0.6 3.9 0.8% 0.6% 2.3% Waste 9.1 10.2 11.4 0.7 1.8 2.7 3.3% 1.9% 1.6% Total (Mt CO2 eq) 210.4 176.4 237.6 22.0 90.7 167.0 adaptive capacity across all sectors, ensuring

2.4. Adaptation coordinated and sustainable responses to climate Ethiopia’s NDC 3.0 recognizes that adaptation is risks. indispensable for protecting nature, livelihoods, and ecosystems in a context of growing climatic In this regard, it is planned to expand climate- variability. Drought, erratic rainfall, and rising smart agriculture, not only through promoting temperature already undermine food security and drought-tolerant crops and integrated soil and livelihoods, and recurrent floods cause nutrient management but also by rapidly humanitarian emergencies and infrastructure expanding climate-smart practices and damage. This section highlights how Ethiopia is agricultural mechanization. It is planned to scale scaling up cross-cutting and sectoral actions to up climate-smart rain-fed cropping practices, with build resilience while promoting inclusive productivity targeted to increase from 31 quintals economic transformation. per hectare in 2024 to nearly 46 quintals per hectare by 2035. The area equipped with tractors

2.4.1. Agriculture and harvesting equipment is expected to more Ethiopia’s adaptation efforts are guided by a set than double by 2035, supported by an expanded of cross-cutting measures with economy-wide co- annual supply of tractors. benefits designed to enhance resilience and Table 5: Targets for Climate-Smart Agriculture, Mechanization, and Ecosystem Restoration Indicators 2025 2030 2035 Rainfed crop area with climate-smart practices (million ha) 17.91 27.28 37 Productivity of rainfed cropland with climate-smart practices 31.96 38.5 45.9 (quintals/ha) Land size under small-scale and modern mechanization (Million ha) 5.2 9.75 11 Number of tractors distributed per year 5,000 11,500 16,500 Number of tractors distributed (cumulative) 18,730 65,000 137,500 Crop land size by irrigation systems (million ha) 4.3 5.8 8 Percentage of households adopting modern agricultural techniques 5.98 7.1 8 Watershed area protected or rehabilitated (million ha) 3.531 4 5 Crop production through small-scale irrigation (million quintals) 27.53 30 38 This target is designed not just to increase yields management is another cornerstone of Ethiopia's but to ensure that smallholder farmers can adaptation to climate change. Ethiopia is withstand droughts and recover quickly after continuing its large-scale afforestation and shocks. Sustainable land and ecosystem reforestation programme while restoring MINISTRY OF PLANNING AND DEVELOPMENT ETHIOPIA NDC 3.0 15 degraded lands and expanding protected areas. marginalized groups can benefit from new opportunities. Watershed rehabilitation will extend to millions of hectares by 2035, stabilizing soils, improving 2.4.2. Forest Development water retention and regulation, and providing During the NDC 3.0 period, the area of natural habitat for biodiversity (Table 5). forest conserved under Sustainable Forest Management (SFM) is targeted to increase from The community-based programmes are also 3.8 million hectares in 2025 to 7.2 million hectares expected to bring shifts in livestock composition by 2035. Simultaneously, forest products destined toward poultry and small ruminants in Ethiopia. for both domestic and foreign markets are By reducing reliance on cattle, Ethiopia aims to expected to increase from 7.5 million tons to 11.0 ease pressure on grazing lands and lower million tons, resulting in expected export earnings methane emissions while diversifying household from timber and non-timber products rising from incomes. USD 43.7 million to USD 126.1 million during the same period. Furthermore, annual green jobs Access to climate information empowers farmers creation in the sector will be increased from 0.5 to make informed decisions and reduces the risk million in 2025 to 0.7 million by 2035. of crop failure. Early‑warning systems and climate services will be strengthened to ensure that 2.4.3. Urban Infrastructure farmers and communities have timely and Housing information. It is planned to expand the hydro- In the urban sector, the key aspects of adaptation meteorological networks and weather monitoring efforts include the integration of climate systems to enable the government to deliver adaptation into urban planning and infrastructure more accurate forecasts and advisories, which are development through urban corridor and critical for planning planting dates, managing riverside development. This is expected to water resources, and issuing drought or flood promote green spaces and sustainable urban warnings. These efforts support plans to expand practices that mitigate the adverse effects of irrigated agriculture, with irrigated areas climate change. projected to increase from 4.3 million hectares in 2025 to 8 million hectares by 2035. Livelihood Ethiopia’s cities and towns with at least 30% diversification is another key pillar of adaptation. urban green infrastructure coverage will grow Ethiopia will continue investing in diversifying from 75 in 2025 to 240 in 2035. Solid waste income sources such as beekeeping, coverage will rise from 61.3% to 83%, and climate- agro‑processing, ecotourism, and fisheries to adaptive infrastructure will expand from 175,879 reduce dependence on rain‑fed agriculture. km in 2025 to 278,261 km during the same period. Aquaculture and fish production are set to These targets call for municipal capacity increase markedly over the next decade, upgrades, integrated urban planning, and climate- reflecting a concerted effort to tap underused responsive design standards. water resources and meet growing domestic demand for protein. Importantly, livelihood The climate adaptation and urban resilience programmes will have a strong focus on women efforts also identify the reduction of slums in and youth; targeted support aims to ensure that urban areas as a core element. It is planned to MINISTRY OF PLANNING AND DEVELOPMENT 16 ETHIOPIA NDC 3.0 decrease the substantial size of urban slums with sustainable urban mobility options. corridor and riverside development in a systematic, capacity-scaled approach. Accordingly, it is planned to construct 801 km of urban active mobility road infrastructure by 2035,

2.4.4. Energy and Water up from 286 km in 2025. Similarly, the number of Ethiopia’s energy adaptation strategy primarily cities and towns with dedicated non-motorized focuses on reducing climate vulnerability by transport lanes for bicycles will increase from 39 diversifying its energy mix to reduce its heavy in 2025 to 104 in 2035. By 2035, the plan seeks to reliance on hydropower. Solar PV, wind, and raise the percentage of major transportation biogas will be scaled up alongside off-grid and infrastructure that takes climate change into mini-grid systems to strengthen rural energy account from 50% in 2025 to 100%. access and system reliability. The plan aims to stabilize energy supply during drought by 2.4.6. Industry and Mining decreasing grid losses and improving The adaptation targets for the industry sector are electrification in end-use sectors, thereby focusing on improvements in energy efficiency, enhancing the resilience of both households and clean transition, and material resource industries to climate shocks. management with mitigation co-benefits. Water-related adaptation focuses on building The integration of renewable energy sources into storage, irrigation, and watershed systems to industrial processes is also targeted to grow from secure water availability under increasingly erratic 15 industries to 65 during the same period. To drive rainfall. The area under climate-smart irrigation is systematic improvements, the number of projected to rise from 0.49 million hectares in industries established an energy management 2020 to about 1.8 million hectares by 2035, programme or system is projected to increase supported by solar-powered pumping, catchment from 15 to 200. Implementation of circular rehabilitation, and managed aquifer recharge. economy and resource efficiency principles is also expected to grow substantially, increasing from It is anticipated to implement complementary 64.4 industries in 2025 to 600 by 2035. It is also measures, including flood-control infrastructure, planned to transform existing industrial parks into climate-resilient rural water supply and WASH eco-industrial parks during the same period. services, and water-for-livestock interventions. All these actions are intended to protect farming, In the mining sector, protecting and rehabilitating drinking water systems, and natural environments degraded mining lands for their economic and from droughts and floods, helping to fill important ecosystem services is planned to double from gaps in adapting to climate change and ensuring a 50,000 hectares in 2025 to 100,000 hectares by strong connection between water and energy that 2035. Geological hazard studies will increase from supports Ethiopia’s climate goals. 9 to 20, and geothermal potential studies from 2 to 4 during the same period.

2.4.5. Transport Adaptation efforts in the transport sector focus on 2.4.7. Education and Health enhancing adaptive capacity, building resilience The health sector in the NDC 3.0 sets a clear target with climate responsiveness, and expanding for enhancing the health systems and reducing MINISTRY OF PLANNING AND DEVELOPMENT ETHIOPIA NDC 3.0 17 climate-borne diseases in the country. development will integrate gender-responsive Accordingly, it is planned to reduce climate- and disability- inclusive guidelines and select related diseases such as malaria, yellow fever, and locations that are safe from heat stress, flooding, cholera by 35% reduction by 2035 from 3% and landslides, and environmentally sustainable. reduction in 2025. Furthermore, the adoption of renewable and clean energy solutions, such as solar power, will be Similarly, improved sanitation and water service expanded to enhance energy efficiency and coverage is set to reach 100% having improved conservation across educational facilities. toilets and 63% enjoying safe, climate-resilient water supply by 2035. This dual emphasis on 2.4.8. Equity and Social disease reduction and infrastructure Inclusion development demonstrates a shift from reactive Social inclusion and gender equality are not care to proactive, climate-adaptive health afterthoughts but integral to Ethiopia’s adaptation systems. effort. The NDC 3.0 mainstreams gender across all actions and explicitly tracks indicators of women’s Similarly, universalizing climate-resilient service participation and benefits. The Equity and social delivery across the health sector. This includes inclusion aspects are embedded in the NDC 3.0. 100% of healthcare facilities equipped with Adaptation measures seek to reduce burdens on improved water, sanitation, and waste women, such as through closer water points and management systems, as well as clean/renewable cleaner cooking, and enhance food security for energy sources to ensure uninterrupted services smallholders. during climate shocks. Women’s participation is prioritized in nurseries, In addition to that it is planned to increase early- cooperatives, and extension services, while youth warning systems for climate-sensitive diseases are engaged through tree-planting and green job from 14 facilities in 2025 to 54 facilities by 2035, initiatives. and training of at least 200 health professionals and community health workers annually on Ethiopia’s NDC 3.0 emphasizes that climate action climate and health linkages. These actions must benefit all citizens, not just a few. Social position health facilities as both service hubs and inclusion is therefore mainstreamed across nodes of climate risk surveillance to ensure sectors and programmes. The share of reliable, low-carbon power, to ensure that households adopting modern agricultural essential health services remain uninterrupted techniques is expected to increase steadily, with and adaptable to climate-related shocks. special outreach to women and smallholder farmers. Access to clean water reduces the burden Education and its infrastructure systems will be on women and girls who traditionally collect designed to enhance adaptive capacity and water, while climate-smart farming and resilience. In this regard, school infrastructure will diversified livelihoods enhance food security and prioritize establishing an up-to-date regulatory income for female-headed households. Ethiopia framework supported by dissemination, training, views these measures not only as a moral and enforcement mechanisms to ensure imperative but to mobilize the full talents of its consistent standards. The school Infrastructure population for climate resilience. MINISTRY OF PLANNING AND DEVELOPMENT 18 ETHIOPIA NDC 3.0 Children are among the most vulnerable to infrastructure. climate change in Ethiopia. Climate change threatens their rights to health, education, and Furthermore, wet conditions reduce crop protection, so their inclusion is a central concern productivity by 7.03%, and heat stress further in Ethiopia’s NDC 3.0. Rising temperatures are reduces crop yields by 0.75% by 2035. spreading malaria to new areas, and droughts are Road infrastructure faces an average loss of 1.94%, worsening malnutrition, which currently affects while buildings and overall productive capital about one million children. Climate shocks also experience relatively minor losses of 0.20% and disrupt education, forcing many children, 0.41% by 2035, respectively. Livestock and especially girls, to leave school and increasing the livestock value-added show minimal impacts. risk of child marriage and exploitation. The NDC These figures emphasize the disproportionate 3.0 will respond to these by strengthening disease vulnerability of energy and agricultural sectors surveillance, expanding vaccination campaigns, compared to other assets. Overall, the cumulative and building solar-powered and climate-resilient loss represents 29% of the decadal GDP, while the health facilities. Nutrition programs such as average annual loss accounts for 2.5%-2.9% of the school feeding will be expanded. New water, same reference period. This aligns with Ethiopia’s sanitation, and hygiene systems will be Country Climate and Development Report introduced in schools and communities to prevent Estimates, which indicate that cumulative waterborne diseases and reduce the burden on economic losses amount to 20%–30% of the children. average decadal GDP.

2.4.9. Loss and Damage Climate impacts are represented as shocks to 2.5. Means of Implementation economic and physical systems that translate into

2.5.1. Financing Ethiopia's NDC 3.0 tangible socio-economic losses. These impacts, The implementation of Ethiopia’s NDC 3.0 will encompassing extreme weather events and require an estimated total of USD 106.35 billion, of gradual temperature shifts, directly affect which USD 66.35 billion is required for mitigation infrastructure, productive capital, and key service actions and USD 40 billion for adaptation sectors. The loss and damage within this measures. This financing need underscores the framework capture both the immediate dual priority of reducing greenhouse gas emissions destruction of assets and the longer-term while enhancing resilience to climate impacts. economic consequences of climate-related Mobilizing these resources will necessitate a hazards, allowing for an assessment of coordinated approach that leverages domestic vulnerability, exposure, and resilience. finance, international climate finance The average share of assets lost due to climate- mechanisms, and private sector participation. related impacts varies significantly across sectors. Ethiopia has committed to mobilize a minimum of The electric transmission network experiences 22.5% of the financing needs from its own the highest losses, with an average of 20.3%, domestic resources, which includes the Green followed by power generation at 8.6% by 2035, Legacy and Degraded Landscapes Restoration highlighting the high vulnerability of energy Special Fund, financed through 0.5–1% of the MINISTRY OF PLANNING AND DEVELOPMENT ETHIOPIA NDC 3.0 19 annual federal budget, to restore landscapes, to drive down emissions. At the same time, conserve forests and biodiversity, and enhance climate-resilient seeds, irrigation technologies, climate resilience and economic development, early-warning systems, water harvesting, and and other efforts across sectors. nature-based land restoration will strengthen adaptation and protect livelihoods. Whereas the remaining 77.5% will be expected from external support, including from MDPs, Ethiopia will also pursue international technology development partners, philanthropies, and other transfer partnerships while building domestic financiers. capacity to adapt and manufacture solutions locally. By coupling global expertise with

2.5.2. Capacity Building, Technology homegrown innovation, digital tools, and Transfer and Institutional research hubs, Ethiopia will ensure technologies Coordination are scaled effectively and tailored to national Ethiopia recognizes that finance alone is needs. This integrated approach will cut insufficient; it must be paired with strong emissions, boost resilience, and unlock green institutions and skilled human resources. jobs, positioning technology transfer and innovation as a cornerstone of NDC 3.0 MRV AND TRANSPARENCY A central priority is building an integrated implementation and Ethiopia’s broader monitoring, reporting and verification (MRV) development pathway. system aligned with the Paris Agreement’s

2.5.3. Carbon Market transparency framework. This involves upgrading Ethiopia has sought the Carbon market as one of the national greenhouse-gas inventory, the viable financing sources to achieve the developing a centralized NDC tracking platform strategic priorities identified under NDC and LT- interoperable with the national digital planning LEDS. Ethiopia is committed to participating in system, and tagging climate expenditures in the high-integrity international voluntary and budget. compliance markets and to develope domestic INSTITUTIONAL COORDINATION carbon markets, in support of the Paris The inter-ministerial CRGE Forum, sectoral Agreement’s long-term goals. Furthermore, working groups, and regional structures will be Ethiopia has an interest to explore the potential of strengthened to ensure coherent planning and carbon pricing as a policy instrument to achieve implementation. Capacity-building programs for national mitigation objectives. local and regional governments will enable them Ethiopia fully recognizes the potential of carbon to prepare climate projects, integrate climate risks markets and carbon pricing to support. Ethiopia’s into development plans, and access finance. national climate and sustainable development TECHNOLOGY TRANSFER AND INNOVATION objectives. This strategy aims to provide a clear Technology and innovation are central to roadmap to strengthen institutional frameworks, Ethiopia’s ability to deliver NDC 3.0. The country enhance technical capacity, and streamline legal will prioritize renewable energy systems, battery and procedural requirements to facilitate active storage, grid modernization, electric vehicles, participation in both domestic and international efficient industrial processes, and clean cooking carbon markets. MINISTRY OF PLANNING AND DEVELOPMENT 20 ETHIOPIA NDC 3.0 This will further guide Ethiopia’s future with more ambitious climate actions and financing engagement in carbon markets to maximize the needs. benefits for the country in terms of finance mobilization and sustainable development Economic growth under the three scenarios leads to impacts, as well as support the achievement of its varying patterns of jobs in the economy. As the NDC 3.0 and long-term development plans. economy expands, employment levels shift in response to both overall growth and the influence Ethiopia will turn its carbon market strategy into of climate policies. an investment framework aligning with Ethiopia’s NDC 3.0 and national climate targets and Accordingly, the baseline projection indicates total developing a pipeline of investment-ready employment expansion from 45.5 million in 2024 to projects with verifiable carbon outcomes that 59.1 million by 2035, representing a 30.0% increase support financing its climate actions. over the projection period. Under unconditional scenarios, employment

2.6. Fairness and Ambition growth accelerates to 31.2%, while conditional Ethiopia’s NDC 3.0 is grounded in the principles of projections yield 32.9% growth, suggesting policy equity, common but differentiated interventions contribute an additional 1.7 responsibilities and respect for development percentage points to employment generation. imperatives. The fairness and ambition section explains how Ethiopia balances its low historical Figure 4: Real GDP growth rate emissions and development needs with the 12.0% urgency of climate action. The BAU projections 10.0% are consistent with the Ethiopian government’s 8.0% mid-term economic forecasts for the period 2025 %/year 6.0% to 2029, while the growth rate from 2030 onward 4.0% is aligned with the LT-LEDS, reflecting an annual 2.0% growth rate of approximately 7.6% between 2030 0.0% 2020-2025 2025-2030 2030-2035 and 2040. Conditional Time contribution Unconditional contribution

2.6.1. Economic Implications BAU Under the Business-As-Usual (BAU) scenario, Data which assumes the continuation of existing policies and investment trajectories without EQUITABLE POSITION AND RESPONSIBILITIES implementation of additional NDC 3.0 Ethiopia’s per-capita emissions are commitments. approximately 2.6 t CO₂e—far below the global average. As a climate-vulnerable country, its From 2025 to 2030, growth rates increase in all historical contribution to climate change is scenarios. The BAU scenario reaches 9.1% per minimal, yet it faces disproportionate impacts year. The Unconditional scenario grows at 10.1% from the changing climate. annually, indicating further scaling of mitigation efforts. The Conditional scenario shows the Ethiopia’s NDC 3.0 therefore distinguishes clearly highest growth rate of 11.9% per year, consistent between what Ethiopia can achieve with domestic MINISTRY OF PLANNING AND DEVELOPMENT ETHIOPIA NDC 3.0 21 resources (unconditional commitments) and what climate finance must be enabling rather than depends on international support (conditional debt-creating. commitments). This distinction reflects the principle of common but differentiated In addition, the investment required for the responsibilities and recognizes Ethiopia’s implementation of Ethiopia’s NDC 3.0 is revised development challenges. and estimated. Unlike the Updated NDC, the investment and cost of mitigation interventions are

2.6.2. Unconditional and Conditional simultaneously estimated using GEM approach. Commitments The NDC 3.0 spells out unconditional targets 2.7. Governance Framework based on domestic resources, including expanding renewable energy, improving 2.7.1. Institutional Setting for efficiency and promoting sustainable land Implementation of NDC 3.0 management. Conditional targets, which envisage As per the newly enacted government structure emission reductions of 70.3% by 2035 relative to and mandate of Proclamation 1263/2021 for the the revised baseline, depend on external support. Definition of Powers and Duties of the Executive By explicitly quantifying conditional and Organs, and emerging policy needs that call for unconditional contributions, Ethiopia provides a integrating Climate policy with development transparent roadmap for partners and reinforces planning—revitalization of Climate Governance is accountability. As per of its continued internal timely and strategic. commitment, Ethiopia has also raised its Strengthening institutional coordination will unconditional financing ambition to 22.5% to enhance Ethiopia’s capacity to achieve resilient, finance its nationally determined contribution low-emission growth by ensuring effective through 2035. implementation of the NDC 3.0 and sustaining

2.6.3. Raising Ambition national initiatives such as the Green Legacy. The NDC-3.0 clearly raises ambition, by updating According to the new CRGE governance baseline data and by enhancing targets to 2035 architecture, the FDRE Ministry of Planning and aligned with Ethiopia’s net-zero emission targets Development and the sectoral government compared with Ethiopia’s Updated NDC. The organs to effectively implement and manage a conditional scenario envisages deep emission climate-resilient green development strategy reductions and expands adaptation actions, within the national development planning including the rapid scaling of renewable energy, framework. To reorient and give a new impetus to large-scale afforestation, widespread irrigation the climate-resilient green development strategy, and climate-resilient urban development. it is imperative to revitalize the CRGE governance structure to a consistent and integrated approach. Ethiopia stresses, however, that ambition is bounded by development realities and contingent This nationally integrated governance of CRGE will on adequate support from the international boost a unified CRGE Ministerial Committee, community. It calls on developed countries to chaired and co-chaired by the MoPD and the honour their finance and technology obligations Ministry of Finance (MoF) respectively. The under the Paris Agreement and emphasizes that members of the CRGE governance include the MINISTRY OF PLANNING AND DEVELOPMENT 22 ETHIOPIA NDC 3.0 public sector, which directly contributes to 2.7.2. Monitoring and Evaluation climate change at the federal and regional level, System and MRV and all development partners. Robust MRV and M&E systems are the backbone of Ethiopia’s NDC revision processes. An The CRGE governance provides a coordinated integrated and credible Measurement, Reporting engagement platform where stakeholders can and Verification (MRV) and Monitoring & engage and make decisions about climate change Evaluation (M&E) framework is therefore critical. issues, thus enhancing coordination, This framework will ensure transparency and effectiveness, and reducing fragmentation of accountability while providing the evidence base programs and projects. The following diagram needed to guide decision-making, attract (Figure 6) shows the integrated CRGE governance investment, and inform future NDC revisions. structure. Therefore, a credible and integrated MRV and The interaction of all actors and stakeholders will M&E framework will be established at all layers of be flexible as appropriate and will be managed CRGE governance to ensure transparent, through structured regular meetings on cross- evidence-based tracking of Ethiopia’s NDC 3.0. cutting matters, planning, and monitoring and This system will enable Ethiopia to assess evaluations. implementation status and progress toward NDC 3.0 targets. The framework will also strengthen As the national coordinator of the integrated CRGE, the country’s capacity to demonstrate results, the Ministry of Planning and Development can inform investment decisions, and guide the design adopt an action plan for the engagements and of next-generation Nationally Determined meetings with sector ministries, regional Contributions (NDCs) using timely data. governments, and development partners. Figure 5: Ethiopia CRGE governance The integrated framework will also strengthen data credibility, improve cross-sectoral coordination, and support timely policy adjustments, ensuring that NDC remains both CRGE measurable and adaptive. Ministerial Committee (Chaired by MoPD and cochaired by MoF) Furthermore, the integrated MRV and M&E MOF framework will be improved through successive NDC revision cycles and will work toward full CRGE alignment with Article 4 (Mitigation), Article 6 CRGE Desk- Desk- Federal MoPD Regions (Cooperative Approaches), Article 7 (Adaptation) and Article 13 (Enhanced Transparency CRGE Framework) under the Paris Agreement. Article Forum/ TWG 13 specifies elements of reporting in the Biannual Transparency Report, with further flexibility for LDCs. While LDCs like Ethiopia can report “at their discretion,” Ethiopia is working toward meeting international best practices to demonstrate a high MINISTRY OF PLANNING AND DEVELOPMENT ETHIOPIA NDC 3.0 23 degree of ambition and climate policy leadership. environmental integrity, and transparency. To this Therefore, Ethiopia will also comply with end, the MRV and M&E framework will be mandatory reporting and accounting for market mainstreamed in the NDC 3.0, and successive NDC mechanisms, as well as provide information on targets and indicators will be provided for each sustainable development promotion, sector (Figure 6). Figure 6: Ethiopia’s NDC 3.0 and Climate Actions MRV and M&E framework Sectoral targets and indicators Ministry of Planning and Development National Determined Contributions (NDCs) National Inventory report Based on data from national Inventory report MRV/M&E M&E report Biennial Transparency Report (BTR) Annual Emission Balance Corresponding Adjustments, based on ITMO tracking tool (registry) Ministry of Planning and Development UNFCCC MINISTRY OF PLANNING AND DEVELOPMENT 24 ETHIOPIA NDC 3.0 ETHIOPIA NDC 3.0 21 Ministry of Planning and Development