In principle, a country can not endure negative genuine savings for long periods of time without experiencing declining consumption. Nevertheless, theoreticians envisage two alternatives to explain how an exporter of non-renewable natural resources could experience permanent negative genuine savings and still ensure sustainability. The first one alleges that the capital gains arising from the expected improvement in the terms of trade would suffice to compensate for the negative savings of the resource exporter. The second alternative points at technological change as a way to avoid economic collapse. This paper uses the data of Venezuela and Mexico to empirically test the first of these two hypotheses. The results presented here prove that the terms of trade do not suffice to compensate the depletion of oil reserves in these two open economies.Keywords: exhaustible resources, environmental accounts, net national product, genuine savings, foreign trade. JEL: Q01, N5, P24, F18 The Capital Gains from Trade are not Enough: Evidence From the Environmental Accounts of Venezuela and MexicoThe traditional measure of a nation's rate of accumulation of wealth is gross saving. This is calculated as a residual: GNP minus public and private consumption. Gross saving represents the total amount of produced output that is set aside for the future.Gross savings rates can say little about the sustainability of development, however, because productive assets depreciate through time: if this depreciation is greater than gross saving, then aggregate wealth is in decline. Net saving, total gross saving less the value of depreciation of produced assets, is one step closer to a sustainability indicator, but focuses narrowly on produced assets. Environmental economist assimilate natural resources to man made capital, since a country's consumption may be mainly supported by draining natural resources, i.e. from the depreciation of natural capital. Traditionally computed net savings ignore the depreciation of natural capital. Once natural capital depreciation is also subtracted we arrive to the concept of 'genuine savings'.

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