July 28th 2022

PA.046 | Natural Capital, Resources and Sustainability in historical perspective

Parallel Sessions
Over the past quarter-century, Genuine Savings (GS) –or Adjusted Net Savings (ANS)– has emerged as an important indicator of Sustainable Development. It is based on the concept of wealth accounting (K. Hamilton & Hepburn, 2014) and represents a measure of how the country’s total capital stock (physical, natural, social, institutional and human) changes year-on-year. Following the pioneering studies of Pearce & Atkinson (1993) and Kirk Hamilton (1994), the World Bank has published estimates of GS from the mid-1990s to the present (World Bank, 1995, 1997, 2015). Hamilton & Clemens (1999) and World Bank (2006, 2011, 2018) illustrate the nature of these estimates for almost all countries in the world and show how a negative GS indicator can be interpreted as a signal of unsustainable development. Current World Bank data to support the calculation of GS at the country level stretches back to the 1970s, and provides empirical evidence of the level of sustainable/unsustainable economic development throughout the world. However, the social and economic development is, by definition, a long-run process where path- dependence, persistence and multiple equilibriums interact in the construction of “the future”. What can we learn from history about the sustainable development? We propose a session to discuss on this subject to offer novel views about the economic history of regions and countries and contribute in the current debate about development policies. Therefore, we propose analysing the sustainable development of different economies in historical perspective focusing on empirical approaches on the topic. Based on the notion of GS as a framework we expect to receive methodological and empirical works in diverse stages of research (initial and advanced papers) which consider different components of the estimation. GS adds up the value of year-on-year changes in each individual element of capital stock and we will look for long-run estimates (from the 19th century to nowadays) offering information about fixed capital formation, natural resource use andeducational investment, as well as the respective shadow prices to reflect the marginal value product of each stock in terms of its contribution to welfare. Changes in human capital can be approximated using expenditures on education, as a rate of return on time spent in education, or as a measure of discounted lifetime earnings by skill level. The effects of technological change, resource price appreciation (capital gains/losses) for resource exporters and importers, and population change can also be incorporated into the GS indicator and we will welcome efforts in this sense. Changes in the stock of certain pollutants (such as CO2) –valued using marginal damage costs– can also be presented in the estimates of the index. We encourage particularly contributions in this matter because we pretend to open the possibility of discussing the role of economic history in climate change, a main topic in the sustainability debate (Blum, Ducoing, & McLaughlin, 2017; Greasley et al., 2014; Kunnas et al., 2014). Studying the last two hundred years through the lens of natural resources, sustainability and alternative measures of development enables us to make a broader contribution to the understanding of the economic history of the period and to shed light on the prediction of the future well-being. Along this period interacted stages of increasing world integration (as the First Globalization era) with other of progressive enclosing (the interwar period), deep dislocations of the international economy (with both World Wars) and periods of sustained growth in the world core with persistent divergence in the periphery. Our aim is to identify different stylized facts of the international economy to contribute in the construction of a research agenda on the matter and to enhance welfare measures in the long run.
L72 - Mining, Extraction, and Refining: Other Nonrenewable Resources
O - Economic Development, Innovation, Technological Change, and Growth
O13 - Agriculture • Natural Resources • Energy • Environment • Other Primary Products
P28 - Natural Resources • Energy • Environment
Q - Agricultural and Natural Resource Economics • Environmental and Ecological Economics
Q01 - Sustainable Development
Q56 - Environment and Development • Environment and Trade • Sustainability • Environmental Accounts and Accounting • Environmental Equity • Population Growth
Cristián Ducoing - Department of Economic History, Lund University
Eoin Mclaughlin - University College Cork
Henry Willebald - Universidad de la Republica
Les Oxley - University of Waikato
Mar Rubio-Varas - Universidad Publica de Navarra
Tracing sustainability in the long run. Genuine Savings estimations 1850 – 2018
Eoin Mclaughlin - University College Cork
Cristián Ducoing - Department of Economic History, Lund University
Les Oxley - University of Waikato
We introduce a new database of historical Genuine Savings (GS), an indicator of sustainable development propagated by the World Bank and widely used in contemporary economic research. GS derives from the theoretical work on wealth accounting, and addresses shortcomings in conventional metrics of economic development by incorporating broader measures of saving and investment, including human capital (education), and natural resource depletion. Its value as an indicator is determined the possibility to predict future standard of living on basis of genuine investments of the past. This article provides consistent historical estimates of GS since 1850 for 25 countries to enhance, complement and contextualise the work of the World Bank.
Historical Genuine Savings in Latin America (1880 – 2020). Stylized facts on natural resource dependence and development
Cristián Ducoing - Department of Economic History, Lund University
Henry Willebald - Universidad de la Republica
Mar Rubio-Varas - Universidad Publica de Navarra
Eoin Mclaughlin - University College Cork
Latin America has been characterized as a region dependent on natural resources. The economic cycles of Latin American countries are related with raw materials demand from the core economies, hampering the autonomy of its economic policy. In this article we found that Latin America has a bigger gap with the developed world than mainstream income estimations suggest (mainly GDP estimations). If we take into account environmental degradation and lack of reinvestment of natural resources rents (under the adjusted net savings framework), Latin America have not achieved the basics of weak sustainability, meaning the compensation of natural resource extraction and environmental damages through investment in physical and human capital. Using a sample of nine countries, including Argentina, Bolivia, Brazil, Chile, Colombia, Costa Rica, Mexico, Uruguay and Venezuela, the study covers more than 130 years of history.
Genuine Savings in Spain in the long run (1860-2010) a first approach
Inaki Iriarte - University of Zaragoza - Universidad de Zaragoza [Zaragoza]
Cristián Ducoing - Department of Economic History, Lund University
Italian GS since Unification
Cristián Ducoing - Department of Economic History, Lund University
Benedetto Rocchi - Universita degli Studi di Firenze
Towards sustainable energy: how markets, governments and technology shaped economic history
Jeroen Touwen - University of Leiden
Energy was the key to the industrial revolution and even while economic history cannot be studied without taking into account a set of other themes (such as factors of production, institutions, technology, governments, trade) there would be little left of our present-day affluence if we had not figured out how to use the energy resources at hand. This paper reflects on the role of markets, technology, and government in guiding and stimulating a (world-wide) transition. If we approach the transition to sustainable energy, which is essential to avoid excessive global warming, from the point of view of economic history, what does it teach us?
Natural Capital, Resources and Economic Growth: Why have Southeast Asian Countries been out-performed by resource-scarce Northeast Asia?
Anne Booth - SOAS, University of London
The literature on the resource curse is now very large and a number of survey papers have appeared over the past two decades. This paper uses some of the main findings of that literature to explore the economic consequences of resource abundance in two economies, Indonesia and Malaysia. Both economies went through periods when revenues from natural resource extraction accounted for a significant proportion of total commodity exports and also of total government revenues. Both economies, especially Indonesia, experienced rapid economic growth through the 1970s when the oil boom was at its height. But in contrast to other ‘populated petroleum economies’ both Indonesia and Malaysia managed to restructure their economies after prices and export earnings decreased. They were especially successful in increasing a range of non-oil exports including manufactures. Both managed to sustain economic growth until the financial crisis of the late 1990s. The paper explores the reasons for this success.
The Effect of Natural Resource Shocks on long-term Sustainable Development. Evidence from Norway and the Netherlands
Johanna Fink - Department of Economic History, Lund University
Cristián Ducoing - Department of Economic History, Lund University
Les Oxley - University of Waikato
Eoin Mclaughlin - University College Cork
Resource curse in a historical perspective
Lars Bruno - Norwegian Business School
This paper explores the resource curse in two different periods, the late 19th and late 20th centuries. The evidence for the resource curse, the hypothesis that natural resources somehow is detrimental to economic growth, is mainly based on empirical evidence for the late 20th century. However, the late 19th century has seen far less focus. This paper uses a panel data set-up to explore the effect of natural resources for those countries for which data is available for both these periods. This paper asks whether natural resources had a different macroeconomic impact over time and analyses the causes for its effect.
Water Footprint of the Uruguayan agriculture (1870-2020)
Henry Willebald - Universidad de la Republica
Paula Santos - Universidad de la República
In Uruguay, crops and livestock have become a promoter of productive diversification in the first two decades of the 21st century. A period of dynamic stagnation characterised the sector until the 1980s, to further give rise to a time of strong development of specific primary crops, that continued up to the 2020s. There is evidence that the demand for water in the country increased strongly as a result, among others, of the development of these activities. This paper studies the evolution of the use of water in agriculture from a long-term perspective. We estimate the Water Footprint by product (primary crops and livestock meat) for the period 1900-2020. We describe how the water use relates chronologically with the development of the agricultural sector. Our findings show that, despite an increasing trend in the long run, the Water Footprint of production of the sector has fluctuated from period to period, accompanying the sectoral diversification and the direction of the transformation within agriculture.
Patterns and causes of Mediterranean agricultural virtual water exports the second globalization, 1975-2015
Vicente Pinilla - University of Zaragoza - Universidad de Zaragoza [Zaragoza]
Rosa Duarte - University of Zaragoza - Universidad de Zaragoza [Zaragoza]
Ana Serrano - University of Zaragoza - Universidad de Zaragoza [Zaragoza]
During the twentieth century, the Mediterranean basin experienced an intense integration in global markets, becoming one of the largest agricultural and food suppliers in the world. This expansion was particularly intense during the second wave of globalization, and was possible thanks to the increasing consumption of water resources, hand-in- hand with irrigation development and modernization. This study aims to evaluate the impacts that the Mediterranean agri-food trade specialization exerted on water resources between 1975 and 2015, focusing on the second globalization. Concretely, we would like to approach to the economic, technological, productive and commercial factors behind the growing pressures on Mediterranean water resources. Likewise, we would like to focus on the divergences between northern, eastern and southern Mediterranean countries, stablishing regional patterns in terms of the socioeconomic drivers of this process. To that aim, we will use bilateral trade time series with a high product disaggregation detail, which combined with decomposition analysis, make up the methodological setting of the study.
Energy transitions, diversification processes and their effects on the CO2 emissions of European countries along two centuries
Beatriz Muñoz - Universidad Autónoma de Madrid
Mar Rubio-Varas - Universidad Publica de Navarra
Technological innovations have allowed humanity to make a greater and better use of the energy resources available in nature. This has resulted in both increased energy consumption and a greater diversity of the primary sources used. Although changes in the energy structure of countries determine energy transitions, diversification has not been analyzed from a long-term comparative perspective until very recent times. Safarzynska (2017) relates energy diversification to industrial development, while Grubb et al. (2006), Stirling (2008) and Mitchell (2010) analyze the relationship between energy diversity and transitions to low-carbon systems. Rubio-Varas and Muñoz-Delgado (2019) quantitatively analyze the degree of concentration (versus diversity) of the energy mixes of eight European countries in relation to their respective energy transitions.