Is Natural Capital a Complement to Human Capital?

The environment has long been the foundation of human flourishing, but its continued degradation is threatening to reverse recent development gains, especially in human health. This paper analyzes the possible complementarity between natural and human capital by linking high-resolution deforestation data with health outcomes for 0.7 million children across 46 countries. Forest loss is often a consequence of economic activities that may confer market and other benefits. At the same time, it can adversely affect the provision of forest ecosystem services and reduce the associated socioeconomic and environmental benefits for rural communities. The net effect is thus ambiguous. The paper focuses on the hydrological services provided by forests and exploits quasi-random variation in deforestation upstream to assess the impacts on waterborne disease outcomes for rural households downstream. The results not only indicate increases in diarrheal disease incidence among children under 5 years old, but also offer new evidence of early-life exposure to deforestation on childhood stunting, a well-known indicator of later-life productivity. A case study for Peru shows similar results for diarrheal disease, but a weaker effect of forest loss on stunting. The paper concludes that maintaining natural capital has the potential to generate meaningful improvements in long-run human capital.

Bibliographic Details

Main Authors:	Herrera Garcia , Luis Diego, Damania, Richard, Kim, Hyungju, Viotti, Leonardo, Zaveri, Esha, Onder, Stefanie, Pantoja, Chrissie
Format:	Working Paper biblioteca
Language:	English English
Published:	World Bank, Washington, DC 2023-11-29
Subjects:	VALUATION OF ENVIRONMENTAL EFFECTS, DEFORESTATION AND HEALTH, ECONOMIC DEVELOPMENT AND DEFORESTATION, WATER POLLUTION, SUSTAINABILITY, ECOSYSTEM SERVICES, NATURAL RESOURCES, STUNTING AND WATERBORNE DISEASE,
Online Access:	http://documents.worldbank.org/curated/en/099900511272319329/IDU02481177706e52040f109690065dd9c32e366 https://openknowledge.worldbank.org/handle/10986/40665
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