The Changing Wealth of Nations 2021 : Managing Assets for the Future.

Format:

Book

Government document

Author/Creator:

World Bank, World.

World Bank Group.

Series:

World Bank e-Library.

Language:

English

Subjects (All):

Assets.

Economic Growth.

Environment.

GDP.

Human Capital.

Investment.

Macroeconomics.

Natural Capital.

Natural Resources.

Prosperity.

Sustainability.

Wealth Accounting.

Local Subjects:

Assets.

Economic Growth.

Environment.

GDP.

Human Capital.

Investment.

Macroeconomics.

Natural Capital.

Natural Resources.

Prosperity.

Sustainability.

Wealth Accounting.

Physical Description:

1 online resource (500 pages)

Edition:

1st ed.

Place of Publication:

Washington, D.C. : The World Bank, 2021.

System Details:

data file

Summary:

It is now clear that a narrow focus on the growth of gross domestic product (GDP) is insufficient to achieve humanity's aspirations for sustainable prosperity. Well-functioning ecosystems and educated populations are requisites for sustainable well-being. These and other too-often-neglected ingredients of national wealth must be addressed if the development path is to be sustainable. 'The Changing Wealth of Nations 2021: Managing Assets for the Future' provides the most comprehensive accounting of the wealth of nations, an in-depth analysis of the evolution of wealth, and pathways to build wealth for the future. This report--and the accompanying global database--firmly establishes comprehensive wealth as a measure of sustainability and a key component of country analytics. It expands the coverage of wealth accounts and improves our understanding of the quality of all assets, notably, natural capital. Wealth--the stock of produced, natural, and human capital--is measured as the sum of assets that yield a stream of benefits over time. Changes in the wealth of nations matter because they reflect the change in countries' assets that underpin future income. Countries regularly track GDP as an indicator of their economic progress, but not wealth, and national wealth has a more direct and long-term impact on people's lives. This report provides a new set of tools and analysis to help policy makers navigate risks and to guide collective action. Wealth accounts can be applied in macroeconomic analysis to areas of major policy concern such as climate change and natural resource management. This report can be used to look beyond GDP, to gauge nations' economic well-being, and to promote sustainable prosperity.

Contents:

Front Cover

Contents

Foreword

Acknowledgments

About the Editors and Authors

Summary for Policy Makers

Abbreviations

Executive Summary

Sustainability, Resilience, and Inclusiveness Are Urgent Challenges for Economic Development

Global and Regional Trends in Wealth

Policies to Manage Risk and Build Energy Wealth for the Future

Wealth Accounts as a Tool for Macroeconomic Policy and the Financial Sector

Looking Ahead

Note

References

PART I. Global, Regional, and Country Trends in Wealth, 1995-2018

1 The Wealth of Nations

Main Messages

Why Measure Wealth?

What Is Included in Comprehensive Wealth Accounts?

From Monitoring Economic Performance to Managing the Economy

Role of Policies and Institutions in Creating Value for Natural Capital

Roadmap for the Report

Summing Up and Future Research

Annex 1A: Treatment of Carbon Accounting in the SEEA Ecosystem Accounts

Notes

2 How Wealth Is Measured: Basic Approach and New Developments

How Wealth Is Measured

How Wealth Changes over Time

What Is Missing from the Wealth Accounts?

Changes in CWON 2021 Core Accounts and Impact on Wealth Estimates

Wealth, Adjusted Net Savings, and Sustainability

Measuring Sustainability in the CWON

Weak versus Strong Sustainability

Fiscal Sustainability and Natural Capital

Conclusion

3 Global and Regional Trends in Wealth, 1995-2018

Introduction

Growth of Global Total Wealth

Changes in Per Capita Wealth

Convergence in the Wealth of Nations

Composition of Wealth

Renewable Natural Capital Trade-Offs in Low- and Middle-Income Countries

Savings and Changes in National Wealth

4 Valuing Wealth Using Purchasing Power Parities

Introduction.

Valuing Wealth in Purchasing Power Parities

Data and Methodology

Shift in the Global Distribution of Wealth

Narrowing Differences in Total Wealth per Capita across Groups

Country-Level Results

Future Work

Annex 4A: Total Wealth per Capita in 2018 Using MERs and PPPs

PART II: Measuring Comprehensive Wealth: New Work on Natural Capital and Human Capital

5 Land Assets, Climate Change, and Degradation Impacts

Land Assets: Global and Regional Trends, 1995-2018

Trade-Offs across Land Assets in Low- and Middle-Income Countries

Cropland Wealth and Climate Change Scenarios

Forest Ecosystem Services Trends and the Impacts of Degradation

6 Blue Natural Capital: Mangroves and Fisheries

Measuring the Asset Value of Mangroves and Fisheries

Blue Natural Capital

The Future of Blue Natural Capital under Climate Change

7 Human Capital: Global Trends and the Impact of the COVID-19 Pandemic

Estimating Human Capital

Estimates of Human Capital

Gender and Human Capital

Impact of COVID-19 on Human Capital

Annex 7A: Methodology for Calculating Human Capital: Estimating Human Capital with the Lifetime Income Approach

8 Impact of Air Pollution on Human Capital

Incorporating the Impact of Air Pollution into the Human Capital Calculations

Estimates of the Impact of Air Pollution on Human Capital

PART III. Applying Wealth Accounts for Policy Analysis

9 The Nonrenewable Wealth of Nations

Global Distribution of Fossil Fuel and Mineral Wealth.

Challenges for Nations Rich in Nonrenewable Resource Wealth

Nonrenewable Natural Capital and the Environmental Kuznets Curve

Decomposition Analysis: What Is Driving the Changes in Nonrenewable Natural Capital?

Annex 9A: Methodology for Valuing Nonrenewable Natural Capital

10 Low-Carbon Transition, Stranded Fossil Fuel Assets, Border Carbon Adjustments, and International Cooperation

Valuing Subsoil Fossil Fuel Assets in the CWON

Valuation of Fossil Fuel Assets with the ENVISAGE v10 CGE Model

Simulation of Subsoil Fuel Asset Values under Uncertainty

Countries and Country Groups

Scenario Analysis to Represent Risk and Uncertainty

Simulation Results

Comparison with Other Estimates of Stranded Assets

Political Economy of Global Cooperation on Climate Change

11 Wealth Accounting, Diversification, and Macrofiscal Management

Asset Portfolio Diversification versus Export Diversification

Sustainability and Renewable Natural Capital

Adjusted Net Savings as a Measure of Sustainable Wealth Conversion

Macroeconomic and Fiscal Management

Institutional Capital

Annex 11A: Country Selection and Benchmarking

12 Nonrenewable Natural Capital and Human Capital Distortions: Impact on Accumulation, Gender, and the Public Sector

Background

Natural Resource Dependence and Distortions in Human Capital Accumulation

Policies to Mitigate Human Capital Distortions Arising from Nonrenewable Natural Resource Wealth

Annex 12A: Additional Tables and Figures

13 Natural Allies: Wealth and Sovereign Environmental, Social, and Governance Frameworks

Main Messages.

Financial Markets and Sovereign ESG Frameworks

Wealth on a Country's Balance Sheet

Addressing Sovereign ESG Challenges

Overcoming Wealth Data Constraints

PART IV. New Developments in Measuring Wealth

14 Renewable Energy: Unaccounted Wealth of Nations

Renewable Energy Resources as Assets in the SNA and SEEA-CF

Resource Rent and Renewable Energy Assets

Valuation of Hydroelectric, Solar, and Wind Assets

Experimental Results of Values for Hydroelectric, Solar, and Wind Assets

Hydroelectricity Asset Values

Solar Electricity Asset Values

Wind Electricity Asset Values

Renewable versus Nonrenewable Energy Asset Values

Future Trends in Renewable Electricity Asset Values

Discussion of Results and Future Research Agenda

15 Social Capital and the Changing Wealth of Nations

Overview of Conceptual Approaches to Social Capital

Definitions of Social Capital

Is Social Capital Really Capital?

Measurement of Social Capital

Time Scales for Measuring Social Capital Trends

Valuation and Social Capital

Why Social Capital Matters for Economic Output and Welfare

Social Capital in Europe

Future Options for Linking Social Capital and Wealth Accounting

Appendix A Summary of Methodology and Data Sources

Appendix B Per Capita Wealth for 2018

Boxes

Box ES.1 Strengths and Limitations of Wealth Accounting

Box ES.2 What's New in CWON 2021?

Box 1.1 Sustainability and the Wealth of Nations

Box 2.1 Savings and Changes in Wealth

Box 4.1 International Comparison Program and Purchasing Power Parities

Box 5.1 Case Study: Valuing Sediment Retention Services in Nepal

Box 5.2 Forest Degradation and the Value of Recreation Services.

Box 7.1 Different Approaches to Measuring Human Capital

Box 7.2 The Human Capital Index and the CWON's Measure of Human Capital

Box 7.3 Impact of the COVID-19 Pandemic on Education and Health

Box 8.1 Toxicity of Fine Particulate Matter Air Pollution Varies According to Its Source and Chemical Composition

Box 8.2 Challenges in Estimating Global Mortality Attributable to Air Pollution

Box 8.3 More Research Is Needed on the Health Impacts of Air Pollution

Box 9.1 Rent and Government Revenues: Why Are They Not the Same?

Box 12.1 Illustrative Case of the Republic of Korea: How Structural Transformation Was Ultimately Beneficial for Women in the Context of a Highly Segmented Labor Market

Box 13.1 What Is Ingrained Income Bias?

Box 13.2 Wealth Data and Sovereign Bonds

Box 13.3 Extending Wealth Data with Satellite Imagery and Machine Learning

Box 15.1 Social Capital in China

Box 15.2 Social Capital and the COVID-19 Pandemic

Figures

Figure ES.1 Changes in Total Wealth and Per Capita Wealth, by Income Group, 1995-2018

Figure ES.2 Renewable Natural Capital, by Income Group: Wealth per Capita Value versus Share of Total Wealth, 2018

Figure ES.3 Shares of Mangroves and Fisheries in Blue Natural Capital, and Share of Blue Natural Capital in Total Wealth, 1995-2018

Figure ES.4 Forests, Agricultural Land, and Protected Areas: Change in Land Area, Wealth per Square Kilometer, Population Dilution Effect, and Overall Wealth per Capita in Low- and Middle-Income Countries, 1995-2018

Figure ES.5 Global Nonrenewable Natural Capital, 1995-2018

Figure ES.6 Annual Growth Rate of Human Capital per Capita, by Income Group, 1995-2018

Figure ES.7 Nonrenewable Natural Capital Assets' Share of Total Wealth, by Highest-Share Countries, 2018

Figure ES.8 Risk to Fossil Fuel Wealth in the Most Ambitious (COOP&lt

&lt.

2C) Climate Policy Scenario, by Region.

Notes:

Description based on print version record.

Description based on publisher supplied metadata and other sources.

Other Format:

Print version: World Bank, World The Changing Wealth of Nations 2021

ISBN:

9781464815911

OCLC:

1293246865

Publisher Number:

10.1596/978-1-4648-1590-4