ABSTRACT: Ethiopia has embarked upon a rapid growth and development trajectory aiming to become a middle-income country by 2025. To achieve this goal, an agricultural development led industrialization strategy is being implemented which aims to intensify and transform agriculture, thereby boosting yields and, subsequently, economic returns. At the same time, the energy use which currently consists of more than 90% traditional biomass use is shifting towards increasing electricity production predominantly from large-scale hydropower plants, with the aim to improve access to modern energy sources. While the targets are commendable it is not clear that either all direct impacts or potential conflicts between goals have been considered. In this paper we evaluate and compare the impacts of alternative development trajectories pertaining to agriculture, energy and environment for a case-study location, the Lake Tana Subbasin, with a focus on current national plans and accounting for cross-sector interlinkages and competing resource use: the food-energy-environment nexus. Applying a nexus toolkit (WEAP and LEAP) in participatory scenario development we compare and evaluate three different future scenarios. We conclude that the two processes – agricultural transformation and energy transition – are interdependent and could be partly competitive. As agriculture becomes increasingly intensified, it relies on more energy. At the same time, the energy system will, at least in the foreseeable future, continue to be largely supported by biomass, partly originating from croplands. Two outstanding dilemmas pertaining to resources scarcity were identified. Water needed for energy and agricultural production, and to sustain ecosystem services, sometimes exceeds water availability. Moreover, the region seems to be hitting a biomass ceiling where the annual increments in biomass from all terrestrial ecosystems are in the same order of magnitude as biomass needs for food, fodder and fuel. We propose that a stakeholder-driven nexus approach, underpinned by quantitative and spatially explicit scenario and planning tools, can help to resolve these outstanding dilemmas and can support more consistent policy and decision making, towards improved resource productivities, lower environmental pressures and enhanced human securities.

KEYWORDS: Energy transition, agricultural intensification and transformation, WEAP-LEAP, participatory scenario development, Ethiopia

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