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The world seeks a headline indicator to help assess aggregate progress on the 17 Sustainable Development Goals (SDGs) and sustainability more broadly. To achieve such a measurement, a robust discussion is needed about expanding national economic statistics “beyond GDP” (gross domestic product). Despite GDP’s important role in measuring production and income, it is widely recognized to be an insufficient measure of progress and national sustainability.

Whether progress is sustainable, that is, whether future generations will have at least the same production and consumption opportunities as the current generation, can be assessed by looking at changes in real wealth per capita. Constant or increasing wealth per capita—measured comprehensively to include produced, human, and natural capital, as well as net foreign assets—is thus an important indicator of sustainability.

While almost all countries measure GDP, few countries produce wealth measures. Those that do generally do not measure wealth comprehensively by including natural and human capital.

CWON aspires to measure wealth comprehensively, and its measurement has gradually expanded with each edition as new data and statistical standards have become available, and more sophisticated methodologies have been adopted. The current coverage includes key assets from the SNA balance sheet and critical ecosystem assets covered by the SEEA Ecosystem Accounts. CWON also goes beyond the current SNA standards to include human capital.

CWON wealth estimates align where possible with the internationally accepted statistical standards and guidelines of the System of National Accounts and the System of Environmental-Economic Accounting. CWON goes beyond these standards to include additional assets critical for sustainable development, such as human capital and key ecosystem assets.

This edition of CWON implements an important methodological innovation that affects how real wealth per capita and its changes over time are measured. Real wealth estimates are computed using a chained Törnqvist volume index, where the physical assets of a nation, such as the size of its fish stocks or the number of workers in the labor force, are weighted by their economic importance.

Changes in real comprehensive wealth per capita will be driven by the depletion or accumulation of assets, changes in the productivity or relative scarcity of assets, changing substitution patterns, and increasing or decreasing competition for available assets. All of these are important for analyzing the sustainability of economic progress.

Future efforts should build on the critical methodological innovations introduced with this edition, and improve the implementation of the volume index, especially the measurement of physical volumes.

A key measure of economic progress is how the real wealth per capita of a nation—consisting of produced capital, nonrenewable natural capital, renewable natural capital, human capital, and net foreign assets— changes over time.

Real wealth per capita grew by 21 percent globally between 1995 and 2020 due to significant increases in human and produced capital. However, while two thirds of countries in the CWON database saw an increase in their real wealth per capita, 27 countries experienced declines or saw little change. Most of these countries were low-income nations. Some were also fragile and affected by conflict.

Changes in the composition of the asset portfolio and population growth have driven changes in real wealth per capita. While the accumulation of produced and—to a lesser extent—human capital has kept pace with population growth, renewable natural capital per capita has experienced dramatic declines across the world. Nonrenewable natural capital, on the other hand, has experienced more volatile trends, driven by changes in market conditions, new discoveries, and technological innovations.

GDP only tells a partial story of economic progress. While most countries are either getting richer and wealthier, or poorer and more impoverished, more than 25 percent of countries have experienced positive GDP per capita growth while their real wealth per capita has declined. To ensure their economic growth is sustainable, it will be critical for these countries to continue investing in a diversified asset base.

The current CWON methodology implicitly assumes that all assets are highly substitutable. This means that a decline in, for example, natural capital can be compensated for through investments in other assets, such as produced or human capital. If overall wealth increases, development is considered weakly sustainable.

This assumption is unlikely to hold in the current context, where natural resources are in limited supply and experience widespread overexploitation and degradation. The degree of substitutability will likely vary as natural resources become scarcer and reach critical levels due to climate change, biodiversity loss, tipping points, and the crossing of planetary boundaries.

It is thus necessary to adjust standard economic models for limited substitutability between natural capital and other assets. Simulations show that natural capital decline can have considerable implications for a country’s growth potential as well as its resilience and fragility to natural shocks.

a.   The Nonrenewable Wealth of Nations

Nonrenewable natural capital wealth per capita, from assets such as oil, natural gas, and minerals, decreased by 1 percent globally between 1995 and 2020. The trend was volatile, with periods of fast growth caused by discoveries and technological innovations followed by sudden declines in wealth driven by increased extraction.

b.   Valuation of Hydroelectric Resources

The estimated values of hydroelectric assets are globally consequential. In total, hydroelectric assets were valued at $3.5 trillion (chained 2019 US dollars) in 2020, which is comparable to other renewable natural resource assets.

c.   Forests and Agricultural Lands

Wealth per capita in land assets declined globally between 1995 and 2020. Declines were recorded in all land asset categories: agricultural lands (24 percent decline), forest recreation services (18 percent decline), non-wood forest products (27 percent decline), forest water services (26 percent decline), and timber (28 percent decline). This means that investments in land assets have not compensated for population growth.

d.   Blue Natural Capital: Marine Fish Stocks, Aquaculture, and Mangrove Coastal Protection Services

Marine fish stocks play a key role in supporting local economies and food security. However, they have been overexploited over the last 25 years, leading to dramatic declines in the real asset value of marine fish stocks. The real value of marine fish stocks has dropped by more than 25 percent since 1995, equivalent to a $70 billion decline in chained 2019 US dollars.  

Mangroves provide a range of ecosystem services, one of the most critical being that they protect people and assets along the coastline. While the nominal value of these protection benefits increased dramatically between 1995 and 2020, in real terms, mangrove wealth still declined due to the continued loss in mangrove cover.

e.   Human Capital Wealth: Global Trends

Human capital—estimated as the present value of future earnings for the labor force, employed and self-employed— is the largest asset across all income groups, constituting 60 percent of total wealth in 2020, slightly lower than in 1995.