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Séminaire du CIRED : Laura Recuero (Ministère des Affaires Etrangères)

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Laura Recuero, The impact of renewable versus non-renewable natural capital on economic growth

In this paper, we aim at bringing some light on whether natural capital is a robust determinant of economic growth distinguishing the contribution of direct and indirect effects in renewable and non-renewable natural capital. Our hypothesis is that renewable natural capital may have a rather indirect but more important impact on economic growth than non-renewable natural capital, particularly through human well-being. In contrast, non-renewable natural capital can be a source of immediate financial wealth, but can have adverse social and environmental effects. To test this hypothesis we use a data set on 83 countries for the period 1960-2009 to compare the relevance of proximate and fundamental theories to explain economic growth. We find that the share of renewable natural capital in wealth is positively correlated with some growth determinants associated with human well-being and, more precisely, population growth rates and fertility. In turn, we find some evidence of an indirect negative impact of renewable natural capital on economic growth through these variables. This is particularly the case for countries with higher levels of human development, where fertility rates would be still rising in the so-called second-phase of the demographic transition. In contrast, the share of non-renewable natural capital in wealth has a direct positive impact on economic growth in countries with lower income inequality and higher institutional quality.

Further developments : The determinants of economic growth in countries with i) high marine biodiversity ; ii) high coastal climate change adaptation needs and mitigation potential.