Inclusive Wealth Report 2014 Measuring progress toward ...

1 Inclusive Wealth Report 2014 Measuring progress toward sustainabilityThe Inclusive Wealth Report 2014 is a joint initiative of the UN University International Human Dimensions Programme (UNU-IHDP) and the UN Environment Programme (UNEP), in collaboration with the UNESCO-Mahatma Gandhi Institute of Education for Peace and Sustainable Development (UNESCO-MGIEP), ASCENT Africa sustainability Centre, the Malaysian Industry-Government Group for High Technology (MIGHT), Science to Action (S2A), the Ministry of Environment Government of Japan, the UN University Institute for the Advanced Study of sustainability (UNU-IAS), and endorsed by the Science and Technology Alliance for Global volume may be cited as: UNU-IHDP and UNEP ( 2014 ). Inclusive Wealth Report 2014 . Measuring progress toward sustainability . Cambridge: Cambridge University Press. in this web service Cambridge University PressCambridge University Press978-1-107-10962-9 - Inclusive Wealth Report 2014 : Measuring progress toward sustainabilityFrontmatterMore in this web service Cambridge University PressCambridge University Press978-1-107-10962-9 - Inclusive Wealth Report 2014 : Measuring progress toward sustainabilityFrontmatterMore informationInclusive WealthReport 2014 Measuring progress toward in this web service Cambridge University PressCambridge University Press978-1-107-10962-9 - Inclusive Wealth Report 2014 : Measuring progress toward sustainabilityFrontmatterMore informationUniversity Printing House, Cambridgecb2 8bs, United KingdomCambridge University Press is part of the University of furthers the University s mission by disseminating knowledge in the pursuit ofeducation, learning and research at the highest international levels of on this title.

2 United Nations University International Human DimensionsThis publication is in copyright. Subject to statutory exceptionand to the provisions of relevant collective licensing agreements,no reproduction of any part may take place without the writtenpermission of Cambridge University Published2015 Printed in the United Kingdom by Bell and Bain LtdA catalog record for this publication is available from the British LibraryLibrary of Congress Cataloguing in Publication dataISBN978-1-107-52400-2 PaperbackCambridge University Press has no responsibility for the persistence or accuracy ofURLs for external or third-party internet websites referred to in this publication,and does not guarantee that any content on such websites is, or will remain,accurate or views and opinions expressed herein do not necessarily representthe position of the United Nations University International HumanDimensions Programme on Global Environmental Change, the UnitedNations Environment Programme.

3 Nor those of their consultants: Carmen Scherkenbach, John TkacikCover illustration: Katja Cloud INKeye, BonnDesign and layout: Katja Cloud, Louise SchenkProject assistants: Elorm Darkey, Cec Programme on Global Environment Change 2014_ISBN978-1-107-10962-9 Hardback_ lia Fernandes, Kira in this web service Cambridge University PressCambridge University Press978-1-107-10962-9 - Inclusive Wealth Report 2014 : Measuring progress toward sustainabilityFrontmatterMore informationvContentsxi Contributorsxiv Foreword by Partha Dasguptaxix Preface by Anantha Duraiappahxxii Acknowledgementsxxiv Abbreviationsxxvii Executive summary1 INTRODUCTION Part I: What does the data say?15 CHAPTER 1 Accounting for the Inclusive Wealth of nations: key findings of the IWR 2014 Pablo Mu oz, Kira Petters, Shunsuke Managi, and Elorm Darkey63 CHAPTER 2 The IWR and policy lessonsAnantha Kumar Duraiappah, Cec lia Fernandes, Pushpam Kumar, and Rodney Smith Part II: Human capital83 CHAPTER 3 Human capital measurement: a bird s eye viewGang Liu and Barbara M.

4 Fraumeni109 CHAPTER 4 Human capital: country estimates using alternative approachesBarbara M. Fraumeni and Gang Liu123 CHAPTER 5 Health capitalKenneth J. Arrow, Partha Dasgupta, and Kevin J. Mumford Part III: New insights137 CHAPTER 6 Forest Wealth of nationsHaripriya Gundimeda and Giles Atkinson 159 CHAPTER 7 Challenges to ecosystem service valuation for Wealth accountingEdward B. Barbier179 CHAPTER 8 Using Inclusive Wealth for policy evaluation: the case of infrastructure capitalRoss D. Collins, Vivek Sakhrani, Noelle E. Selin, Adnan Alsaati, and Kenneth M. Strzepek201 Annex 1: Conceptual framework 207 Annex 2: Methodology 219 Annex 3: Data323 Glossary of terms 326 Contributing in this web service Cambridge University PressCambridge University Press978-1-107-10962-9 - Inclusive Wealth Report 2014 : Measuring progress toward sustainabilityFrontmatterMore informationviCHAPTER 11. A three-capital model of Wealth creation.

5 182. Schematic representation of the Inclusive Wealth Index () and the Adjusted Inclusive Wealth Index (adj)..203. Annual average growth rates in , per capita and adj for the 140 countries assessed in the IWR 2014 during the time period between 1990 and 2010 .. 224. Annual average growth rate in and per capita .. 235. growth rates before per capita adjustment disaggregated by capital form, annual average for 1990-2010..246. Changes in worldwide Inclusive Wealth per capita and other indicators for 1992-2010 ..277. Percentage of human, produced, and natural capital in total Wealth , annual average for 1990-2010..298. Developments in the composition of Wealth by capital form, 1992-2010..309. Percentage shares of human capital and natural capital in total Wealth , average 1990-2010 ..3010. Average annual growth rates of adj disaggre-gated by the three adjustments ..3411. Average annual growth rates of per capita, GDP per capita, and HDI, period 1990-2010 (in percentage).

6 36 12. Comparing annual avarage growth in per capita, GDP per capita, and HDI, period 1990-2010 ..37 CHAPTER 21. Average education levels attained across coun-tries .. 662. Growth rates of investment in education per capita across countries, 2010/2009 .. 673. Change in cropland Wealth per capita, 2010/1990 694. Changes in pastureland Wealth per capita, 2010/1990 .. 705. Change in cropland Wealth per capita .. 716. Energy projections by energy source .. 727. Energy demands until 2040 .. 738. Reserves-to-production: remaining extract years of fossil fuels .. 749. Oil crude prices .. 7410. Change in oil Wealth per capita (in percentage), 2010/1990 .. 7511. Germany: natural capital per capita annual growth rates .. 7612. Germany: consumption of solar energy (ter-awatts-hours) .. 7613. The fossil fuel, natural capital, renewable energy, Inclusive Wealth cycle ..77 CHAPTER 31. Human capital: a sketch of its formation, com-position, and benefits generated.

7 872. A taxonomy of different Measuring approaches ..91 CHAPTER 41. International comparison of J-F human capital per capita, individuals aged 15 to 64, 2006 .. 1162. Average years of education 2005 compared with human capital per capita 2006, individuals aged 15 to Comparison of education attainment, 2005. Between ages 25-34 and 55-64, with ages 15-64 average comparison ..1174. 2005 Educational attainment comparisons, ages 25-34 vs. ages 55-64 .. 1185. Cross tabulations of younger vs. older educa-tional attainment, 2005 and human capital per capita, 2006 .. 119 CHAPTER 51. Life expectancy at birth .. 1252. Use of capital in production .. 126 CHAPTER 61. Growth (measured in GDP) vis- -vis forest area (in hectares) accumulation in different countries, 1990-2010 .. in this web service Cambridge University PressCambridge University Press978-1-107-10962-9 - Inclusive Wealth Report 2014 : Measuring progress toward sustainabilityFrontmatterMore informationvii2.

8 Trade-offs between economic growth and forest quality (measured by growing stocks in cubic metrics) ..1483. Trade-offs between growth (measured in GDP) and forest Wealth ..1494. Decadal average change in Wealth to change in GDP .. 1525. Composition of forest Wealth in selected coun-tries, 2010 .. 1536. Relation between change in population and change in forest Wealth (in percentage), 1990-2010 .. 154 CHAPTER 71. Adjusting GDP for reproducible, human, natural, and ecological capital .. 1612. Valuing ecosystem goods and services and ecological capital 1623. Replacement cost vs. expected damage function estimation of protective value ..168 CHAPTER 81. Inclusive Wealth of an economy represented as a dynamic, interconnected system .. 1822. Infrastructure-adjusted human capital may be lower than the baseline projection due to health related reductions in the adult population and/or life s working period..1863. Percent change in capital stocks per capita in China compared to the base year (1990 to 2008); reproduced using data from the UNU-IHDP and UNEP (2012) Data annex.

9 1874. Mean monthly Nile flow at Aswan and growing seasons; the dam resulted in larger and more stable flows in the summer growing season. Reproduced with permission from Strzepek et al. (2008) ..1895. 1000 oil price trajectories (1990 to 2008) mod-eled using GBM .. 1926. The distribution of 2008 oil Wealth in Saudi Arabia under oil price uncertainty .. 1937. Wealth -based scenario analysis should search for near-term policies that will perform reason-ably well across the landscape of plausible futures and values .. in this web service Cambridge University PressCambridge University Press978-1-107-10962-9 - Inclusive Wealth Report 2014 : Measuring progress toward sustainabilityFrontmatterMore informationviiiCHAPTER 11. Relative contribution (in percentage) of human, produced, and natural capital to growth by sub-regions, regions, and total world average ..262. Regional and subregional composition (in percentage) of Wealth by capital form, average 1990-2010.

10 313. Wealth composition (in percentage) based on income-based country classification, average 1990-2010 .. 314. Decomposition analysis of the three terms accounted in for human capital and their contri-bution to the changes in human capital ..41 CHAPTER 31. Key findings about country practices on Measuring human A list of selected national studies applying income-based approaches .. 97 CHAPTER 41. Ranking of countries by J-F per capita lifetime income .. 1162. Cross tabulations of younger vs. older educational attainment and human capital per capita .. 119 CHAPTER 51. Total health expenditure (percentage of GDP) 1242. Estimated value of the average annual increase in life expectancy in the ..130 CHAPTER 61. Values of ecosystem services from the TEEB database considered for the study .. 1452. Absolute forest Wealth and per capita Wealth in the countries selected for the study ..1503. Changes in forest Wealth and per capita capital vis- -vis GDP growth.