Environmental and economic consequence of Hawassa Industrial Park on Lake Hawassa

Abstract Lake Hawassa, acritical freshwater ecosystem in Sidama region, has undergone accelerated environmental degradation due to industrial pollution, particularly from the Hawassa Industrial Park (HIP). This study investigates the economic and ecological consequence of Hawassa Industrial Park (HIP’s) operations using environmental economic framework. Using the combination of secondary environmental monitoring data and socio economic indicators, the study employs Ostrom’s Social-Ecological System frame work to examine the trends in water quality, fisheries, and tourism. An analysis of water quality data (2016–2023) reveals marked increase in BOD, COD, nitrates, and phosphate that coincide with the period of industrial operation at Hawassa Industrial Park, suggesting a potential link between industrial discharge and water quality changes. These changes have negatively affected fisheries, agriculture while the tourism visits in affected area decreased by 30% between 2019 and 2023, while exposing governance failure and market inefficiencies. These finding suggest that industrial and urban activities are significantly impacting both ecological and economic aspect of the lake. The study conclude that integrated environmental management, focus on the aspect of control and limiting discharge, and targeted restoration policies are urgently needed to safeguard Lake Hawassa ecological integrity and the livelihood that depend on it. The study recommends policy instruments such as pollution taxes, strengthened environmental regulations, and co-management framework to internalize the externalities and restore the ecological balances.