Ethiopia is one of the largest charcoal producing countries in Africa where its urban consumers burn over three million tons per year. Production of charcoal as a livelihood support strategy in mecha district increased at alarming rate over time. The purpose of this study was to assess the amount of charcoal produced and its related environmental and socio-economic impact in the study area. The study was conducted using questionnaire survey, direct field observation, reviewing related literature and recorded secondary data. Two kebeles namely Ambomesk and Enamert were selected purposively because of the volume of charcoal produced and their accessibility. A total of 355 respondents were selected by using simple random sampling technique. The amount of Greenhouse Gas Emissions from charcoal production was analyzed based on the Inter-governmental Panel on climate change quantification techniques. Rainfall and temperature variability data were analyzed using Microsoft office excel. The health impacts of charcoal production data were analyzed with chi-square. The impact of charcoal production on household’s income was analyzed using propensity score matching econometric model. The results revealed that the annual charcoal production rate and emission of carbon dioxide equivalent has an increasing trend at alarming rate in the study area. From propensity score matching analysis, the economic impact of charcoal production has a positive difference of 21923.7288 as compared to non-producers. Employed laborers on charcoal production face health problems like skin irritation, skin roasting, respiratory illness like “pneumonia, bronchitis, Sienese, and acute respiratory infection”, eye irritation and headache.Socio-economic factors like land size, landcovered with eucalyptus , agricultural extension market distance and number of oxen takes highly significant effect but issues like sex, age, family size, education status, credit service and marital status had no significant effect on participation. In general, even though charcoal production is economically valuable; it has disproportionately adverse effects on environment like smong pollution in addition to sophisticated respiratory health difficulties. Therefore, responsible institutions and planners should focus on the effects of traditional charcoal production on environmental issues and sophisticated health problems especially on employed laborers and nearby residents. Keywords: Charcoal production, Eucalyptus, Greenhouse Gas Emission, Mecha, Producers vi TABLE OF CONTENT