As the intensity and frequency of natural catastrophes caused by global warming and mismanagement of natural resources continue to increase, it becomes increasingly important for businesses, governments, and civil society to have constructive dialogues about environmental management. Perhaps the most effective way to do this is by assessing the full breadth of the myriad risks to political and economic stability posed by breaches of ecological limits.
The Earth Security Index (ESI) was created in 2013 with the goal of assessing these risks. According to its founder Alejandro Litovsky, the ESI seeks to ,“educate, build capacity, and align action between businesses, investors, and governments to address resource risks.” The ESI measures the vulnerability of countries against 24 indicators across 8 areas: land governance, water security, climate security, crop performance, population growth, food security, fiscal stability, and energy security.
Case Study: Earth Security Index
First Released: 2013
Intended Audience: Business, civil society, and government
Potential Application: Fostering collaboration and coordination across public and private sectors to respond to natural resource scarcity risks
Developer: The Earth Security Initiative
The ESI risk dashboard uses a systems approach to frame the interrelatedness of climate-related risks. The index recognizes that adequately addressing such complex issues necessitates coordinated action and integrated solutions from across sectors and sovereignties. Its findings and methods make resource limits and associated risks relevant across the geopolitical space, engaging diplomacy, government ministries of developed nations and emerging economies, as well as industry and financial institutions.
The ESI aggregates data from a number of indices, including the Environmental Performance Index, to calculate thresholds for each country. Using the lowest and highest scores of the sample of 200 countries, the ESI normalizes each country’ score on a scale of 0-100. It is unclear how the eight dimensions are weighted against each other. The dashboard, which draws its visual inspiration from the Planetary Boundaries project of the Stockholm Resilience Center, allows users to clearly see how particular countries are doing in all categories relative to others.
In its first offering, the Earth Security Group applied its framework to 17 of the 200 countries in its database. These countries were chosen for their “significance to the global resources security agenda” Notably, the US was not selected, which might cause problems for both fans and detractors of the US. The ESI plans to change the countries it examines in each edition, in order to most accurately capture the changing importance of countries’ impacts to the global issues of natural resource management. It is not clear what methodology is used to determine which countries are chosen.
For each selected country, the report highlights key developing risks. It also offers recommendations for where investors and policymakers can begin to take preventative actions.
Figure 1: Sample vulnerabilities by country Copyright Earth Security Group
Broadly, the ESI identifies 4 major interconnected natural resource risks, which it labels as teleconnections, food productivity bottlenecks, import-dependence, and choke points. All of these will require addressing through a multi-stakeholder approach. There are slight inconsistencies in the identification of these top 4 risks, from the report and interviews, reflecting the fact that they are variable in nature.
Examining the dashboards of the 17 countries, on average, each country is at or exceeding its risk threshold for 5 categories. The most common national risks were deforestation, exposure to climate extremes, and water pollution (see Figure 2 for the top 3 risks for each country.) To determine this, the ESI used a number of indicators. For water pollution, researchers used the UN GEMS database, which unfortunately, is outdated and quite sparse.
Based on the results of the risk dashboard, the ESI prescribes country-specific solutions, including insurance policies for the Amazon to protect against deforestation in Brazil, investments in solar-powered water purification technologies in the United Arab Emirates, and legislation protecting Indian farmers from expropriation to bolster food security. The responses are tailored to each country’s conditions, with input from a network of experts. To better demonstrate the viability of these solutions, the ESI should consider highlighting what impacts similar projects have had in addressing these risks.
Primary Takeaways and Areas of Growth
Businesses, in particular, are highlighted in the ESI as “partners of choice.” The ESI recognizes their capacity to proactively engage governments around natural resource risks. Some business-based solutions offered include investments in technologies, public-private partnerships around sustainable business models, risk recalibration by financial firms to account for natural resource risks, and the brokering of cooperative trade policies.
As countries are increasingly forced to rely on each other for energy, water, and food resources, this interdependence begins to color geopolitical relations. Litovsky points out two other major areas that expose the interdependence of countries when it comes to natural resources: energy security and water. Litovsky notes both the European Union’s dependence on Russian gas and strained water relations between Ethiopia and Egypt.
As resource scarcity intensifies, and countries become more interdependent, the importance of collective responsibility and action towards risk management will inevitably become greater. For the next iteration of the ESI — set to be released in January 2015 — Litovsky projects that his analysts will “give greater prominence to governance” or the rule of law and transparency. Currently, institutional health is the only issue area in the ESI devoted to governance.
Additionally, given the impact of the growing water crisis on human and ecological health, Litovsky predicts the ESI will add virtual water data to the index. Lastly, he hopes to problematize energy in greater detail, allowing the index to examine energy independence, poverty, and the water-food-energy nexus.
To enhance the usability of the dashboard, the ESI should consider elaborating more on its assessment of countries and solutions to answer the following questions: How is each country’s importance to the global resource agenda assessed? How can the effectiveness of the proposed solutions be judged? Finally, the ESI may consider establishing normative targets, instead of using other countries’ performance on indicators as guideposts.
Figure 2: Top three vulnerabilities by country