How Do Environmentally Sustainable Production Technologies Enhance the Climate Resilience of Farmers? Empirical Evidence From Wheat Producers in Ethiopia

ABSTRACT Although environmentally sustainable production technologies play a role in enhancing climate resilience, the mechanisms through which they operate remain unclear. This study examines the impact of adopting environmentally sustainable production technologies on farmers' climate resilience, explores the mechanisms behind this effect, and assesses the varying impacts across different factors using micro‐level data from 506 wheat‐producing farmers in Ethiopia. Categorical principal component analysis, multinomial endogenous switching regression, multivalued inverse probability‐weighted regression adjustment, quantile regression, and causal mediation analysis were methods we used for data analysis. The results show that adopting environmentally sustainable production technologies significantly enhances farmers' resilience to climate change, and using an integration of these technologies gives the highest resilience benefits. However, there is heterogeneity in the resilience effects of adopting environmentally sustainable production technologies, with greater gains observed among farmers who have better access to information, larger farm sizes, those located in resource‐endowed zones, and those with lower initial resilience levels. The mechanism analysis further reveals that the adoption of environmentally sustainable production technologies improves farmers' climate resilience through the channels of cost efficiency improvement, increased income diversification, and reduced yield variability. Therefore, the policy should promote the adoption of combined environmentally sustainable production technologies and provide targeted support to strengthen climate resilience among smallholder farmers.