Media Blog A Sustainable Wealth Fund to Fuel Transition Written by Mike Robinson, RSGS Chief Executive In Norway in 1996, the first oil money was transferred to the sovereign wealth fund. Just 20 years later it has become the biggest of its kind. In 2019 it has a total market value of $1,092 Billion and controls about 1% of all shares listed on global stock markets along with a number of properties and other investments. In contrast, the UK earned £330 Billion ($427 Billion at today’s exchange rate) in tax revenue, but has spent it all. With the North Sea oil industry now in decline, we look across the North Sea to Norway with some envy for their prescience and management of their oil wealth. David Pilling in his excellent book The Growth Delusion states that “…even the UK, a nation with generally well-functioning institutions, can be accused of squandering its oil revenues… unlike Norway it simply spent the money…” He adds, “…existing generations benefited from these windfall revenues in the form of current expenditure, higher investment and lower taxes. But no explicit provision was made for future generations.” Can we learn from this? With the advent of renewables, we are near the beginning of a new energy revolution – and one that shouldn’t simply run out in 50 years’ time. Is this a chance to start again and build our own sovereign wealth fund? This is needed for many reasons, but it is essential we find funding to support the transition to a low-carbon economy. Ironically, in large part, it is necessary because of our over-reliance on oil and other fossil fuels. So is this the time to introduce a sovereign wealth fund in Scotland driven by income from renewables? Perhaps we could challenge the fossil fuel heavy industries – oil, aviation, cement, etc – to kick-start the fund with contributions in the short term. It does not have to be solely through renewables. But it could provide essential long-term funding – not just money, but infrastructure, subsidies and investment in mitigation, education, research and, most importantly, delivery of low-carbon activity. The 2006 Stern Review, and the more recent 2019 UKCCC Net Zero Report, both stated that if we take appropriate action to build a low-carbon society, it would take circa 2% of GDP. In Scotland this equates to £3.5 Billion per year. This is just to mitigate greenhouse gases, so admittedly won’t necessarily tackle biodiversity loss or inequality, but it’s a good starting point, and through ensuring a just transition and sensitive delivery it would go some way to addressing these other concerns too. There is a great opportunity to not repeat the mistakes of the past, and to generate resources to build a positive future for younger and future generations. And launching in Scotland in 2020, the year the UN Climate Conference convenes in Glasgow, would be an apposite year for such a venture. It would also be a huge signal of progress and optimism: a Renewable Wealth Fund. A Sustainable Wealth Fund. Or even better a Future Generation Fund.