Environmental historical national accounts for oil producers. Estimates for Mexico and Venezuela (1901–1985)

Abstract

Environmental accounting literature reminds us that prosperity can be ephemeral if it is built on depletion of natural resources. Traditional national accounting practice ignores the loss of natural resources. According to standard environmental accounting, this produces exaggerated income, encourages unsustainable levels of consumption and is misleading when assessing the economic prospects of resource extracting countries. While the historiography of oil-extracting countries departs from entirely different concepts and methods, it contains plenty of arguments that resemble those of the environmental accountants. Nonetheless the arguments in the historiography lack quantitative support for the most part. This article connects these previously disparate literatures and explores the resulting synergies. Doing so, it contributes to the surprisingly small amount of comparative historical studies of the oil industries and the economic histories of Venezuela and Mexico, but overall, this study is an examination of the tractability and usefulness of environmental accounting as a tool of economic analysis over the long run.