Do natural threats matter for natural resources rents? Global evidence

Mỹ Huyền Trần
Oct 3
2 min read

Updated: Oct 6

Latest research article by Dr. Nguyen Phuc Canh, HAPRI's Senior Researcher.

Natural resource rents have declined over the past decade, yet the climate crisis demands urgent action to curb further rent-seeking. Greater exposure to hazards tends to lower rents, while weak adaptation pushes them higher. Developing countries face opposing pressures, whereas in developed economies both exposure and lack of adaptation reduce rents. Not all resources respond the same way coal, gas, minerals, and forests decline under hazards, but oil rents remain steady. The effects are most visible in countries with medium dependence, highlighting the critical role of adaptation strategies in shaping sustainable resource use.

How do natural threats, specifically exposure and a lack of adaptive strategies, influence natural resource rents?

Global Trends in Resource Rents

The UN (2021) estimates that we will need at least three planets by 2050 to provide enough natural resources to support the current lifestyles of a population of 9.6 billion. Thus, understanding the determinants of natural resources rents is important for policy actions.

Total natural resources rents across the globe from 2011 to 2019

Hazards and Adaptation: Opposite Paths

Natural threats do not affect all economies the same way. In places where floods, storms, and droughts hit hardest, resource rents tend to shrink - as if disasters force a reluctant shift away from extraction. But where adaptation is weak, the story reverses. Instead of building resilience, countries lean more on oil, gas, and forests to cope, deepening long-term dependence.

Key Findings

Our findings further add that overall conditions to adapt to climate change would also be important for natural resources rent-seeking activities. Without a good adaptation strategy, a country might face increased natural resources rents under climate change, leading to more difficulties and challenges in sustainable development.

Overall, the findings suggest that increases in natural threats affect natural resources rents through two opposing channels:

First, increases in natural threats increase risks and uncertainty, which could lead to decreases in aggregate demand, production, and overall economic activities. These decreases then result in a reduction in natural resources rents.
Second, increases in natural threats could increase natural resources rents if there are weak adaptation strategies through the tragedy of the commons phenomenon. The findings emphasize the important role of governments in building adaptation strategies.

Policy Implications

Our findings have an important implication, in that increases in natural threats that bring increases in risk and uncertainty could reduce natural resources rents due to reduced economic activities.

The findings show that the tragedy of the commons is still a severe challenge in reducing natural resources rents, as economic agents navigate towards higher rents under threats of natural hazards if countries do not have a good adaptation strategy.

Governments can break this cycle by improving coping capacities and preparing long-term adaptation strategies. These policies and programs, such as improving governance, investment in healthcare systems, social and material security, building alarm systems, and long-term adaptation policies for climate change, could help reduce the likelihood of suffering harm and vulnerability.