New Zealanders have more to celebrate than being virtually Covid-free, or having Jacinda Ardern as prime minister.
According to a report in the London “Economist”, NZ has more natural capital per person ($US380,000) than oil-rich Kuwait ($US362,000) or Saudi Arabia ($US180.000).
The study which produced this ranking is the work of economists attempting to put a dollar figure on the value of the world’s land, forests, fisheries, minerals, and fossil fuels, or what is left of them. Their work has fed into the inclusive wealth project, initiated by the United Nations, directed by Managi Shunsuke of Kyushu University and advised by Sir Partha Dasgupta of Cambridge.
They estimate the world’s natural capital amounted to over $US91trn in 2014, or over $US13,000 per person. The world’s natural capital is predicted to decline by a fifth by 2040.
On average, countries with more natural capital tend to have a higher GDP per person.
The “Economist” wonders whether this is a curse or a blessing. It says some economists argue that natural bounty raises the level of GDP but slows its growth rate: it provides an additional, steady stream of income that grows less quickly than the rest of the economy.
Those authorities who carried out the study have calculated the future trajectory of natural capital under a variety of scenarios. In a future of continued high energy demand, carbon emissions can be expected to grow by 7% in high-income countries and by 44% in the rest of the world over the next two decades.
In such a scenario, the world’s people will continue to grow wealthier, but natural assets will diminish rapidly as a share of the portfolio. According to these projections only 12 countries will increase their stock of natural capital over the next two decades.
Point of Order suspects this will not provoke a “gee, whiz” reaction from NZers—but certainly there is some food for thought there.