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Accounting for natural resources in Ecuador : contrasting methodologies, conflicting results (English)

This study examines natural capital depletion in Ecuador from 1971 to 1990, corresponding with an oil boom in the 1970s followed by economic stagnation in the 1980s. Two natural resource accounting (NRA) methodologies are utilized to measure the economic value of natural capital depletion in the petroleum sector. The Depreciation Method adjusts national income to reflect the change in economic value of natural capital which occurs during each accounting period. The User Cost Method splits the revenue from the sale of an exhaustible resource into a capital element, or "user cost", and a value-added element, representing true income. This paper is set out in four parts. Section 2 examines Ecuador's macroeconomic performance from 1971 to 1990. Section 3 calculates the value of natural capital depletion in Ecuador's petroleum sector. Section 4 incorporates the economic value of natural capital depletion into the nation's macroeconomic accounts and offers indicators of environmentally sustainable development. Section 5 addresses policy implications related to the depletion of Ecuador's oil reserves.


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    Kellenberg, John

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    Departmental Working Paper

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    Latin America & Caribbean,

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    Accounting for natural resources in Ecuador : contrasting methodologies, conflicting results

  • Keywords

    purchase of goods and services;normal return to capital;socially sustainable development;public sector expenditure;oil production;oil revenue;world oil price;natural resource accounting;economic rent;natural gas production;public sector revenue;petroleum reserve;expenditures on education;decline in productivity;public sector deficit;price of crude;heavy crude oil;petroleum exporting country;public sector investment;Type of Investment;public sector consumption;crude oil export;enhanced oil recovery;asset and liability;public sector finance;reduction of taxes;portion of total;erosion of capital;gross domestic investment;net domestic product;flow of good;income from capital;petroleum sector;discount rate;operational expenditure;petroleum extraction;proven reserve;petroleum derivative;production cost;national income;transport cost;market price;oil discovery;exhaustible resource;capital depletion;oil boom;production process;capital appreciation;capital base;export earning;exploration cost;Oil Pipeline;macroeconomic performance;nonmetallic mineral;cost data;domestic saving;national oil;high viscosity;oil company;oil companies;export earnings;Public Utilities;implicit subsidy;retail trade;economic stagnation;government subsidy;life expectancy;food product;production ratio;energy economics;financial service;total stock;capital asset;fixed asset;Fixed Assets;ceteris paribus;generating capacity;present value;optimizing behavior;infinite series;price change;social cost;private cost;policy prescriptions;Social Welfare;information capital;saving rate;private consumption;current consumption;foreign borrowing;Economic Policy;investment increase;energy situation;agricultural product;world price;net output;gross output;Population Growth;construction plans;long-term planning;universal acceptance;market mechanism;initial investment;tax liability;public consumption;oil output;public failure;domestic oil;capital growth;inflation average;oil tax;temporary suspension;domestic consumption;essential goods;Exchange Rates;petroleum industry;marginal extraction;exploration drilling;penetration road;monetary policy;national currency;protectionist policy;economic slowdown;Public Spending;world production;oil line;money supply;heavily dependent;external borrowing;foreign trade;foreign exchange;ecological information;equal amount;real value;average cost;normal profit;net change;oil reserve;petroleum deposit;import finance;industrial capacity;export revenue;standard framework;gross income;capital consumption;accounting period;monetary accounts;barrel basis;national reserves;reserve ratio;commodity price;oil exploration;capital depreciation;water treatment;investment fund;capital stock;capital maintenance;expenditure for income;foreign source;net saving;economic prosperity;measure of use;capital development;national account;



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Kellenberg, John

Accounting for natural resources in Ecuador : contrasting methodologies, conflicting results (English). Environment Department working papers ; no. 41. Environmental economics series Washington, D.C. : World Bank Group.