Executive summary | The economics of planetary security

Introduction and objectives

Planetary security refers to the role of the environment in geopolitical risks and conflicts. As a relatively underexplored concept, this report, intended for policy makers and business professionals, examines the economic aspects of planetary security and, in particular, the vulnerabilities and resilience of countries to environmentally induced conflict. It first discusses the concept of planetary security and the role of economics therein, and then builds a quantitative framework and monitor capturing the vulnerabilities and resilience of different countries.

The report distinguishes between direct economic effects of climate change on countries, unintended economic effects of climate change policies and effects of climate change on business and financial sectors. While the first two elements are captured in the monitor and quantitative framework, the third element– the effects of climate change on business and financial sectors – could not yet be modelled in the monitor. This report therefore discusses the links between the economics of climate change and international conflict risk, which are brought together under the title ‘economics of planetary security.’

Quantitative framework

The quantitative framework is divided into four different layers. Each layer is built on various individual variables and based on existing analyses of these variables which together constitute the substantial value of each layer. The first layer focuses on Conflict Vulnerability, the second on Climate Change Vulnerability, the third on Low Carbon Risk and the fourth on Economic Resilience.

These layers were then combined to provide a Consolidated Risk Layer, which consists of Layer One to Three, and a Consolidated Resilience Layer, combining all four layers in order to show how resilience to the above vulnerabilities could be bolstered.

Results

Figure 1

An Image of the Consolidated Risk Layer. You can find this on the Planetary Security Monitor

Figure 1 contains an Image of the Consolidated Risk Layer. This can be found online. Based on this image, it is evident that Europe stands out as the least vulnerable continent. Africa scores mostly on the medium to high vulnerability range, with the exception of North-Eastern Africa which predominantly scores in the high vulnerability range. South America has predominantly low vulnerability scores. North America generally scores in the medium to low vulnerability range. Meanwhile, Asia scores in the medium to high vulnerability range, with the exception of Japan and Bhutan. Oceania scores mostly in the medium to low vulnerability range. The variety in the scores are mainly derived from the different scores per country per layer. Taken together, most of the high scores are attributed to the Conflict Vulnerability Layer, which explains why the Middle East and North Africa region scores extremely high.

Figure 2

An Image of the Consolidated Resilience Layer

The Consolidated Resilience Layer in Figure 2 illustrates the degree of overall resilience to conflict. When reviewed against the Consolidated Risk Layer, the scores do not look quite so bleak: for instance, many states which are at risk have some economic capabilities to assist in mitigating such risks. With the exception of a few countries, the overall average score ranges in the medium resilience range. With respect to the Consolidated Risk Layer (Figure 1), Asia fares better as it drops from being predominantly in the medium to high risk range to the medium risk range; this is however with the exception of Japan and South Korea both scoring low, and Pakistan and Yemen both scoring high. Africa continues this general trend, with most countries occupying the medium scoring range. This bodes well considering its high dependence on fossil fuel rents. Sudan has the highest consolidated score.

Conclusions and recommendations

The report provides various examples of how the monitor could be used by policy makers and the business sector. Based on the monitor, three categories of countries were identified which would require different types of action from policy makers and business professionals:

Category A - Peace First, Development and Climate Resilience Later

These countries experience high conflict vulnerability, high environmental stress, low economic resilience, and are usually affected by war. For these countries, conflict is the overriding risk factor. The following are our recommendations:

Improve country resilience by identifying and addressing underlying pressures, feeding into tailored and precise policy making;

Investigate and identify joint responses for public authorities and the private sector in managing the process of conflict transition.

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

These countries are heavily invested in carbon and non-renewable energy, with the export of fossil fuels often a key ingredient in maintaining economic prosperity. The following are our recommendations:

Identify, address and align climate change policy and the transition towards a low-carbon economy, while addressing and streamlining actions combatting climate change effects;

Develop capacities for economic resilience: introduce policies transitioning to a low carbon economy. This is both an opportunity and challenge to both the public and private sector;

Diversify the economies of fossil fuel dependent countries, especially those in the MENA region prone to conflict. For more economically resilient countries and transnational corporations: develop tailor-made capacities or support for such countries.

Category C – Synthesizing Climate Change Mitigation with Development

These countries possess a strong economical basis with which they can develop policies that address both climate change resilience and development schemes. The following are our recommendations:

Undertake a domestic analysis of the causes of maladies in the particular country’s current situation to ensure policies are more effective. Policies have to address the driving factors of the different layers of risk in the monitor.

Prevent climate change mitigation and adaptation policies from becoming a new source of conflict through, for instance, addressing stove piping of climate change policies. This feeds into the need for comprehensive and balanced policies.