A new 127 page environmental analysis conducted by the World Bank and Environment and Climate Research Center showed that inadequate land management processes, lack of coordination between urban and transport planners are key institutional challenges for Ethiopian’s growing urban centers.
The study which took three years to complete also indicates that the current rigid land tenure system which does not allow land holders to sell or mortgage lands causes them to stay on the land instead of moving to the cities even when they might benefit economically.
These issues also cause municipalities to have inadequate revenue to cover all investment needs for water supply, sanitation service and transport systems.
According to the study despite improvements, supply of power and connectivity of transportation are insufficient to attract or promote industrial investments and enhance productivity  and as well lack of capability of micro and small enterprise to invest in environmental friendly initiatives
The analysis showed very little is known about the potential areas of ground water resources. Costs and benefits of various uses of resources are incomplete which include inputs and outputs of agriculture, forestry, and biofuel production. Information about environmental effects (land degradation, deforestation, and loss of eco system services are also incomplete. Upstream farmers do not have sufficient incentives to undertake tree planting, landscape rehabilitation, and soil and water conservation to reduce run-off and siltation of dams downstream.
According to the research more than half of all croplands still need conservation measures and billons of Ethiopian birr are needed to invest in soil and water conservation structures to conserve sloping croplands and to bring degraded land back into production for a growing population.
The paper study which looked at the policy and intuitional framework of environmental management finds that some laws lack implementing regulations and standards, which presents an opportunity for updating and up grading to address key issues. Beyond the laws and the rules, environmental management faces challenges of coordination and communication across sector and ministers both at federal and regional state levels.
It further elaborated that although local communities can play a pivotal role in environmental management, they are not regularly and actively engaged in decision- making process due to lack of priority, mandate or funds at the decentralized government level. The enforcement of existing environmental policies is not well- coordinated among responsible ministries and regional local bodies.
The study depicted that energy market distortions undermine sustainable energy production. Analysis of willingness to pay is needed to understand the constraints for consumers, and the benefit of both grid and off- grid technology options.