Natural Capital in Ethiopia, Indonesia, and Trinidad and Tobago

This policy brief by the International Institute for Sustainable Development (IISD) examines natural capital trends in Ethiopia, Indonesia, and Trinidad and Tobago from 1995 to 2020. It argues that relying on GDP as a measure of progress masks the depletion of natural assets and advocates for the use of comprehensive or inclusive wealth (C/IW) metrics to ensure sustainable development.

• Natural capital management in Ethiopia, Indonesia, and Trinidad and Tobago has been inadequate, with all three countries seeing stagnation or decline in per capita market natural capital stocks after the 2008 global financial crisis.
• Trinidad and Tobago experienced a severe collapse in market natural capital value, losing 98% of its 1995 value by 2020. This was driven by the depletion of energy reserves, declining production, and the fall of global oil prices and demand following the 2008 crisis.
• Market natural capital is heavily concentrated in specific assets depending on the country: Ethiopia's is dominated by agricultural land (approximately 93% in 2020), while Indonesia's is primarily in fossil fuel and mineral assets (44% in 2020).
• Non-market natural capital is declining across all three nations. Between 1995 and 2020, per capita land area decreased by 50% in Ethiopia, 28% in Indonesia, and 8% in Trinidad and Tobago. Per capita forest area declines were 42% in Ethiopia, 38% in Indonesia, and 12% in Trinidad and Tobago.
• Climate change is negatively impacting the three countries, with average annual temperature departures from the 1981–2010 normal increasing by 0.2°C in Ethiopia, 0.3°C in Indonesia, and 0.4°C in Trinidad and Tobago.
• GDP growth often provides a misleadingly positive view of development by ignoring the depletion of the natural wealth that supports it. For example, Indonesia's average real per capita GDP grew by 4.3% from 1995 to 2020, while its market natural capital grew at only 1.8% and declined after 2008.
• Current green development policies are often ineffective; in Indonesia, only 17 of at least 150 climate policies implemented since 1995 were identified by experts as having high potential to reduce greenhouse emissions, and in Ethiopia, only six out of 24 had high impact potential.

APA

Smith, R., Zoundi, Z., & Bizikova, L. (2024). Natural Capital in Ethiopia, Indonesia, and Trinidad and Tobago. International Institute for Sustainable Development. https://www.iisd.org/system/files/2024-05/natural-capital-trends-policy-implications.pdf

Chicago

Smith, Robert, Zakaria Zoundi, and Livia Bizikova. Natural Capital in Ethiopia, Indonesia, and Trinidad and Tobago. International Institute for Sustainable Development, 2024. https://www.iisd.org/system/files/2024-05/natural-capital-trends-policy-implications.pdf.

Wikipedia

{{cite report |last1=Smith |first1=Robert |last2=Zoundi |first2=Zakaria |last3=Bizikova |first3=Livia |title=Natural Capital in Ethiopia, Indonesia, and Trinidad and Tobago |publisher=International Institute for Sustainable Development |date=April 2024 |url=https://www.iisd.org/system/files/2024-05/natural-capital-trends-policy-implications.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{smith2024natural, author = {Smith, Robert and Zoundi, Zakaria and Bizikova, Livia}, title = {{Natural Capital in Ethiopia, Indonesia, and Trinidad and Tobago}}, institution = {International Institute for Sustainable Development}, year = {2024}, month = apr, url = {https://www.iisd.org/system/files/2024-05/natural-capital-trends-policy-implications.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }