Economic growth determinants in countries with blue carbon: Natural capital as a limiting factor ?

In this paper, we explore the determinants of economic growth in countries with blue carbon, i.e. countries with open access to the sea and high mangrove mitigation potential, to explore the effects of potential antropogenic pressures on these coastal ecosystems. For this purpose, we use a sample of 23 countries across different regions in the world for the period 1960-2009. We find evidence that whereas neoclassical (initial income and investment in physical capital), demography, macroeconomic policy and natural capital are the robust growth theories in countries with blue carbon, investment in physical capital, macroeconomic policy and natural capital are not relevant anymore when using a worldwide sample of countries. The findings on the role of natural capital on economic growth are largely consistent with those of “less developed” countries that our sample represents. Indeed, there is a share over two times lower of national natural capital per capita compared to an average country, and such lower share can be a limiting factor for economic growth. In addition, a too large economic dependence on national natural capital, almost two times higher than in an average country, may also have a negative impact on economic growth. These features, together with the high fertility rates in these countries, highlight the potential antropogenic pressures that coastal areas with blue carbon can be subject to such as land conversion for agriculture or aquaculture, farming run-offs, over-exploitation of blue carbon resources, urbanisation, uncontrolled sewage and public works which, in turn, can degrade blue carbon ecosystems. Given these findings, we empathize the role of central governments to provide incentives for the protection of these nature-based solutions at the level of local policy makers and communities, and of international financial institutions to provide financial support for such initiatives in these “less developed” countries.