Natural Capital in Ethiopia, Indonesia, and Trinidad and Tobago

Trends and policy implications

Natural resources play fundamental roles in our well-being and lives. Oceans, forests, lakes, rivers, and grasslands—and the biodiversity they support—contribute to nourishing us, regulating air quality, cleansing water, and myriad other benefits we enjoy daily. The benefits of natural capital can be social, economic, and cultural.

  • Natural capital in Ethiopia, Indonesia, and Trinidad and Tobago is not being well managed. All three countries experienced either stagnation or decline in per capita market natural capital stocks following the 2008 global financial crisis.

  • Market natural capital is overly concentrated in oil and gas and minerals in Indonesia and Trinidad and Tobago, while in Ethiopia, it is overly concentrated in agricultural land.

  • Non-market natural capital is under threat in all three countries due to, among other factors, population increases and climate change.

This policy brief examines trends in natural capital in Ethiopia, Indonesia, and Trinidad and Tobago from 1995 to 2020 as part of a larger study on comprehensive wealth—the combination of natural, produced, financial, social, and human capitals that underpin our economies. Since natural capital stocks (or physical quantities) are subject to depletion and degradation as a result of human use, it is crucial they be measured and studied to ensure they are growing—or at least stable—both in quantity and quality over time. If they are not, development and well-being are threatened.

After reviewing concerning trends in all three countries, the authors provide timely policy recommendations, touching on

  • the pressing need to move beyond GDP as the main goal of national policy-making
  • the need for green development policies
  • what financial resources must be mobilized
  • data and capacity gaps that should be addressed