The monitor

The economics of planetary security is a complex and, as of yet, largely unexplored area. It comprises general conflict factors within countries, potentially impacting the security of surrounding countries, and – in light of Layer Three – the risk factors in the global market related to environmental stress. The interlinkages between these variables mean that these layers can be considered as isolated components within the planetary security framework, but when taken together, they give a consolidated view of the economics of planetary security.

The monitor in its current form is an investigation into the economics of planetary security. Using the conceptual outline in the first half of the report serves as a lens through which to view the data. The indicators were operationalized to give a holistic understanding of the complexity of the economics of planetary security.

The most vulnerable countries in the Conflict Vulnerability Layer (Layer One) are located in the MENA region. The main underlying factors for this degree of vulnerability are the levels of political and socio-demographic instability, and insecurity observable in the region, implying the inability of these countries to withstand, or deal with such challenges. These results convey that the greater the inability of a given government to act, the greater their respective countries’ overall vulnerability to conflict - hence the large presence of MENA countries in the top ten is to be expected. Such findings may potentially force policymakers to adjust their priorities with regard to what needs to be addressed first if planned climate change-related policies are to be effective.

The Climate Change Vulnerability (Layer Two) of a country includes the degree to which a country’s environment is exposed to the harms of climate change by factoring in environmental, hydrological, geographic and topographic (land surface) concerns. When looking at the Climate Change Vulnerability factors, in general, the data shows that countries most vulnerable are located in the African Sahel and Horn of Africa regions. The main underlying factors causing the high degree of environmental vulnerability in these regions are the lack of precipitation and the expansiveness of deserts present in these areas. Landlocked countries, such as Rwanda, Slovakia and Bhutan perform significantly better due to both the lack of precipitation volatility and that little of the population live below five meters above sea-level in these countries.

The Carbon Risk Layer (Layer Three) gives an indication of the vulnerability of a country to successful climate policies in the future, in particular those that will reduce fossil fuel use in the world economy. It includes a country’s dependency on fossil fuels, fossil fuel resource rents of the countries, the proportion of electricity produced from oil sources, and the degree of renewable energy consumption. When looking at potential effects of low-carbon policies, Botswana, Iran and Yemen are found to be most vulnerable and at risk of unsuccessful transition. The main reason for this is their high dependency on export of fossil fuels as one of their main export industries.

The Economic Resilience Layer (Layer Four)

Combining vulnerabilities

A more comprehensive view on country vulnerabilities arises when Layers One to Three are combined. The following countries appear most vulnerable or at risk to conflict: Yemen, Pakistan, Sudan, Libya and Mexico. These countries appear mostly due to their high scores in Layer One, due to the presence of conflict and due to their reliance on fossil fuels. Implementation is heavily predicated on a government’s access to funds and the ability to mobilize resources in the right direction. Business professionals, in this regard, could supplement governments by consulting on how best to achieve such goals.

Combining vulnerabilities with economic resilience

Drivers leading to increased economic resilience to climate change induced conflict include: higher market prices, unavailability of resources (to certain groups), scarcity of resources in general, higher population pressure, destruction of infrastructures and facilities potentially disrupting production and economic development as well as water management processes. When considering Layer Four in respect to these vulnerability layers, some countries might have greater economic capacity to deal with high vulnerability levels than others. For instance, according to our monitor Saudi Arabia and Australia both possess the economic capacity to transition from a carbon dependent economy to a low carbon economy. This is mostly attributed to their high credit rating, which may help in framing the attractiveness of investing in renewable energy, and a high GDP Per Capita.

Use of the monitor

The monitor developed can be used in various ways by policy makers and the business sector to assess vulnerabilities and resilience capacities of countries. For policy makers, this might entail taking action to address the main vulnerability factors identified in both highly- and less-vulnerable countries alike. It could also mean allocating available resources first to the overall most vulnerable countries identified, and directing them to the necessary domestic industry. For the business sector, use of the monitor could potentially help to assess investment risks in countries under consideration and provide businesses with a further holistic understanding of what factors need to be incorporated in future implementation plans.

An example of this can be seen in the following categorization of countries. The purpose of this categorization is to assist policymakers in guiding their respective policies. These three categories indicate, in general terms, what steps can best be taken when creating policy, and how these countries should be dealt with by the international community.

Category A - Peace First, Development and Climate Resilience Later

The countries within this category are: Sudan, Pakistan, Afghanistan, Somalia and Yemen. These countries are characterized by high conflict vulnerability, high environmental stress and low economic resilience, and are also usually affected by war. For these countries, conflict is the overriding risk factor. When dealing with conflict areas it is advisable for policy makers to first prioritize establishing a stable foundation of peace before proceeding with policies that specifically target reducing environmental stress or improving economic resilience. For business professionals, this provides a contextual understanding of the country in which they may wish to invest.

Category B – Economies at Risk in a Low-Carbon World

The countries within this category are: Saudi Arabia, Russia and Australia. These countries are heavily invested in carbon and non-renewable energy, with the export of fossil fuels often a key ingredient in maintaining their levels of economic prosperity. Optimally, policymakers in these countries should prioritize establishing a good benchmark for transitioning into a low carbon economy without having long term damaging effects by expanding the degree of economic diversity domestically. The underdeveloped nature of certain economic sectors, such as Russia’s renewable energy sector, could provide business professionals with ideas as to what they may best invest in.

Category C – Synthesizing Climate Change Mitigation with Development

The countries within this category are: China, Mexico and Thailand. These countries possess a strong economical basis with which they can develop policies that address both climate change resilience and development schemes. These could, for example, include implementing infrastructure programs that could increase domestic employment in order to combat hurricanes. Business professionals could audit such a process using our monitor in order to see the long term effects of changing development implementation schemes.

Recommendations

Developing resilience towards conflicts and to climate change is a multi-layered and multi-faceted challenge. Exploring the relationship between planetary security (climate change as a stress factor to conflict) feeds into the need to consider the effects of climate change on the economic resilience of a given state in order for it to be able to endure shocks to its economic system. What follows is a list of key recommendations that are based on the data both used and yielded by our monitor, as well as the qualitative considerations outlined within this report. Attention is paid to measures intended to increase resilience to climate change induced stress at a state and economic (private) level.

General recommendations for policy makers and business sector

Specific recommendations for certain categories of countries identified in this monitor

Category A - Peace First, Development and Climate Resilience Later

Category B - Economies at Risk in a Low-Carbon World

Category C – Synthesizing Climate Change Mitigation with Development

Future research required

Based on the report, it is recommended that the method for integral analysis of economics of climate change as a conflict factor is developed further. It is possible that new data, indicators and/or different methodological techniques could be needed to better capture the layers presented in the monitor. The lack of representative data for the private sector remains an issue, this being an integral element in including the private sector into the economics of planetary security equation. In particular, suggested further improvements of the monitor in the future are as follows: