Abstract
Part of the literature informs that different regions of the world contribute to greenhouse gas emissions in varying degrees, in global warming. It also highlights that these regions influence different influences from the warming effects, ranging from extreme net loss to net gain. Importantly, it emphasizes that countries in the tropical regions, such as Ethiopia, are particularly vulnerable to these changes. This study utilized a production function approach that considers the physiology of plants and animals to assess the long-term economic impacts of rainfall variability on the agricultural output. The analysis is based on time-series data covering the period from 1961 to 2012. The results of the econometric analysis confirmed the existence of an optimal volume of rainfall. When this optimal threshold is exceeded, the benefits of rainfall diminish indicating that the country experiences short-lived and negligible gains from climate change, while enduring comparatively higher economic loses in the long run. Furthermore, there is a probable trend of excessive rainfall during the rainy seasons, surpassing the optimal amount. In order to delay the onset of diminishing benefits of rainfall, it is crucial to undertake mitigation and adaptation efforts promptly
