Essays on Green Accounting
Advances in Ecological Economics series
Chapter 20: Sovereign funds
I do not want to end before I put in a word about what has become known as ‘sovereign funds’. Many sovereign funds have been created by or on behalf of economies fortunate enough to have been endowed with marketable natural resources. At least four reasons justify covering this topic here: (1) the funds constitute a policy option for savings during periods of apparent prosperity; (2) they contribute to curbing certain symptoms of the Dutch disease; and (3) critics such as in the United Kingdom, lamenting the projected disappearance of the country’s North Sea petroleum resources, have begun to ask: ‘Where are our Sovereign Funds?’; and (4) the user-cost method has been described by some commentators as essentially a ‘sinking fund’ method – a description to which I did not take exception as I stated in Chapter 10 on ’Misunderstandings’. Fund owners have not always been nations. They have included states within nations, corporations and institutions of many types. In general these funds serve as receptors of financial inflows viewed as temporary.
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