A Sovereign Wealth Fund to tackle Climate Change in Canada

Abstract

In the last few years, the issue surrounding climate change has begun to gain lots of traction globally. The 2019 federal election was a testament to its relevance in Canada, as most political parties pushed their agendas forward to tackle the issue. Plans have typically revolved around large spending promises, with little regards to the methods of financing these initiatives. Canada’s federal deficit is on the rise, and with the ongoing pandemic, the nation is approaching another debt crisis. A possible solution to the capital crunch could come in the form of a Sovereign Wealth Fund. The purpose of the fund would be to pool Canada’s natural resource profits into a fund in order to pivot the economy away from the heavy emitting sectors. The transition would encourage development in other areas, including clean energy, in an effort to reduce dependency on non renewable resources. Exploring the examples of Norway and Kuwait, Canada could model a similar strategy to improve environmental conditions, while simultaneously reducing the debt burden.