The Changing Wealth of Nations

Revisiting the Measurement of Comprehensive WealthPublic Disclosure Authorized This edition ofThe Changing Wealth of Nationsis dedicated to the memory of Kirk Hamilton,whose pioneering work and intellectualleadership have made this work possible. © 2024 International Bank for Reconstruction and Development / The World Bank 1818 H Street NW Washington DC 20433 Telephone: 202-473-1000 Internet: www.worldbank.org This work is a product of the staff of The World Bank with external contributions. The findings,interpretations, and conclusions expressed in this work do not necessarily reflect the views of The WorldBank, its Board of Executive Directors, or the governments they represent. The World Bank does not guarantee the accuracy, completeness, or currency of the data included in thiswork and does not assume responsibility for any errors, omissions, or discrepancies in the information, orliability with respect to the use of or failure to use the information, methods, processes, or conclusions setforth. The boundaries, colors, denominations, and other information shown on any map in this work donot imply any judgment on the part of The World Bank concerning the legal status of any territory or theendorsement or acceptance of such boundaries. Nothing herein shall constitute or be construed or considered to be a limitation upon or waiver of the privilegesand immunities of The World Bank, all of which are specifically reserved. RIGHTS AND PERMISSIONS The material in this work is subject to copyright. Because The World Bank encourages dissemination of itsknowledge, this work may be reproduced, in whole or in part, for noncommercial purposes as long as fullattribution to this work is given. Any queries on rights and licenses, including subsidiary rights, should be addressed to World BankPublications, The World Bank Group, 1818 H Street NW, Washington, DC 20433, USA; fax: 202-522-2625;e-mail: pubrights@worldbank.org. Design and layout: Clarity Global Strategic Communicationswww.clarityglobal.net https://reproducibility.worldbank.org A reproducibility package is available for thisbook in the Reproducible Research Repository athttps://reproducibility.worldbank.org/index.php/catalog/194 Table of Contents Acknowledgments 3 Preface6 Executive Summary11 I.Tracking Wealth to Monitor Economic Progress25 1.Wealth as an Indicator of Sustainability262.How the World Bank Measures Comprehensive Wealth453.Global and Regional Trends in Wealth, 1995—2020634.The Role of Limited Substitutability for Measuring Sustainability with CWON83 II.Measuring Components of Comprehensive Wealth95 5.The Nonrenewable Wealth of Nations966.Valuation of Hydroelectric Resources1217.Forests and Agricultural Lands1438.Blue Natural Capital: Marine Fish Stocks, Aquaculture, and MangroveCoastal Protection Services1609.Human Capital Wealth: Global Trends182 Conclusions 199 Acknowledgments Institute for Environmental Studies). The review also drewon a background paper on “Deflation in the CWON database”preparedby Robert Inklaar(University of Groningen),Wulong Gu (Statistics Canada), and Erwin Diewert (Universityof British Columbia). Additional technical guidance andadvice on the methodological revisions were provided byAlessandraAlfieri(International Monetary Fund,IMF),Bram Edens (Organisation for Economic Co-operation andDevelopment),Alejandro Caparros(Durham University),Moritz Drupp (University of Hamburg), Barbara Fraumeni(Central University for Economics and Finance in Beijing,National Bureau of Economic Research in the United States),Carl Obst (Institute for the Development of Environmental-EconomicAccounting),P.Bhanumati(IMF),and JamesWilliam Tebrake (IMF). The report was developed by the World Bank’s EnvironmentGlobal Department under the counsel of Juergen Voegele,Vice President for the Planet Vice Presidency, Valerie Hickey,Director of the Global Department for the Environment, andRichard Damania, Chief Economist for the Planet Vertical.StefanieOnder(formerly World Bank,now AmericanUniversity), Diego Herrera, and Grzegorz Peszko providedleadership for this report, with core team members HyungjuKim, Robert Marks, Alexis Rivera, Catherine Van Rompaey,Matias Piaggio, and Isabel Saldarriaga Arango. The teambenefited from the thoughtful guidance and generous supportof Christian Peter (World Bank), Raffaello Cervigni (WorldBank), and Bekele Shiferaw (World Bank). The team wouldalso like to thank the following World Bank peer reviewersfor their constructive and helpful comments throughoutthe development of this report: Diego Arias Carballo, KevinCarey,Louise J.Cord,Pablo Fajnzylber,Vivien Foster,Stephane Hallegatte, Martin Heger, Elena Ianchovichina,Aart Kraay, Muthukumara Mani, Craig Meisner, Jason Russ,Giovanni Ruta, Stephane Straub, and Steven N. Schonberger.Emily Lynn Gribbin provided excellent editorial support.Clarity Global Strategic Communications provided editorialand design support for this publication. The report inc