The hydrocarbon savings rate: a global measure of resource wealth preservation, Baajnath Sirinath

Baajnath Sirinath
DBA Candidate
Heriot-Watt University
UK

Purpose: This paper develops and applies a Hydrocarbon Savings Rate (HSR) methodology to evaluate how effectively hydrocarbon-producing countries convert finite resource wealth into long-term financial assets, thereby supporting sustainable consumption and intergenerational equity objectives under SDG12.
Design/Methodology/Approach: The HSR, defined as sovereign wealth fund assets relative to the value of cumulative hydrocarbon production, is introduced and applied to estimate counterfactual savings outcomes under a benchmark scenario.
Findings: Most hydrocarbon-producing countries have saved little or none of their exhaustible resource wealth. Only a few countries have achieved an HSR of over 10%, including Norway, UAE, Kuwait and Qatar. Counterfactual analysis reveals substantial unrealised global sovereign wealth accumulation opportunities measured in trillions of US dollars.
Originality/Value: This study introduces the HSR, a novel and accessible measure of resource wealth preservation that enables cross-country comparison of long-term savings performance. The methodology extends existing work on sovereign wealth funds by linking cumulative hydrocarbon extraction to financial asset accumulation through a simple and transparent benchmark framework.
Practical Implications: The gap between actual and counterfactual outcomes improves target setting and performance management in supporting SDG12 objectives and broader goals related to fiscal sustainability and institutional stewardship of natural resource wealth
Keywords: SDG12, Hydrocarbon Savings Rate, Counterfactual Sovereign Wealth Fund Assets Under Management.