Following the Rio Earth Summit in 1992, a group of environmental economists at the World Bank began working on ways to measure sustainability. Driving them was the concern that GDP gave no indication of the state of natural assets such as forests, water and minerals, that were key to generating sustainable economic growth for so many resource-rich countries. They believed that it was possible to systematically track `assets’ like forests and minerals, just as we do for produced assets like buildings, machinery, roads and bridges. They called it `wealth’ to distinguish it from `income’ recorded as GDP in most countries.
Two decades later, the World Bank has released the third volume on wealth accounting. Called The Changing Wealth of Nations 2018, the report covers a broader set of assets that constitute the wealth of countries and strengthens the methodology. While the motivation to track natural assets is still key, the work now shows that long-term development is about managing a portfolio of assets – produced, natural, and human capital. ….more