Planet Tracker set out to identify those territories and countries which are dependent on nature for export trade revenues. To do so, natural resource-based exports are defined rather narrowly, excluding ecotourism and similar non-physical contributions to a nation’s wealth and trade.
This is not to say that experiential values from the environment do not have value. In fact, for some nations, ecotourism is a substantial source of foreign currency. Rather, we are interested in the dependency of nations specifically on physical goods traded in the international market. These are goods which are often inputs to other production processes and any shocks to global markets will be experienced by their producers first and then reverberate through the rest of the global supply chain.
The forms of natural capital are then further divided into renewables such as agricultural, forestry and seafood products, and non-renewables such as oil and gas, minerals, metals and ores. This division occurs because the dynamics of renewable versus non-renewable resources – the decision-making processes involved – tend to be different in many respects.
The definition of export dependency on nature is based on trade data covering 5,000 different product categories which are then sorted into whether they are directly dependent on natural capital. We recognize that all goods are at least partially dependent on nature. To make the approach actionable, we establish cut-off points. A product which is processed but remains almost entirely made of materials that are harvested from nature, e.g. soybean oil extracted from the seeds of the soybean, is classified as nature dependent. Where a product is changed physically or chemically in a way that makes the product significantly different from its original form, e.g. limestone, marl and clay which are converted into cement, it is excluded.
Following this logic, all complex manufactured goods coming from, for example, the chemical, plastic or machinery industries are excluded. The results are then aggregated to arrive at the percentage by value of each nation’s total exported goods that are directly dependent on nature. Their production and export and the relationship to a nation’s stability are of primary interest in this study. As all nations’ exports are at least in part dependent on nature, we use the term Nature Dependency of Exporters, alternatively Nature Dependent Exporters (NDEs) based on their level of natural resource exports and classify countries into high (HNDE), medium (MNDE) and low (LNDE) groups.
Having established NDE groups, for both renewable and non-renewable resources, Planet Tracker then compares the data using a set of common characteristics. Of primary interest, we explore whether there is a typical profile of HNDEs, exploring what characteristics they may have in common, using twelve metrics and a holistic, exploratory method to discover similarities.NDE-report
By Filippo Grassi: Data Analyst, Planet Tracker. Dr. Zachary Turk: Visiting Fellow, Department of Geography and Environment, London School of Economics and Political Science; Wissenschaftlicher Mitarbeiter, Agrar- und Umweltwissenschaftliche Fakultät, Universität Rostock. Professor Ben Groom: Dragon Capital Chair in Biodiversity Economics, Land, Environmental Economics and Policy (LEEP) Institute Department of Economics, University of Exeter Business School; Visiting Professor Grantham Research Institute on Climate Change and the Environment London School of Economics and Political Science. John Willis: Director of Research, Planet Tracker.
To read the original report by Planet Tracker, click here.