How Norway is Using its Oil Industry to Go Green

Aaron Foyer March 19, 2021

How Norway is Using its Oil Industry to Go Green

With wealth derived from its oil industry, Norway can afford policies to reduce its emissions.

Of Norway’s $109 billion total exports in 2019, its two leading exports were from crude petroleum and petroleum gas at $29.6 billion and $23 billion, respectively.

Norway’s government has adopted the goal of reducing greenhouse gas emissions 80 to 95% below 1990 levels.

Norway’s forests are now sinking nearly half of the country’s GHG emissions due to economic support schemes for new activities like improved seeding density, enhanced breeding of forest seedlings, and forest fertilization.

The energy intensity of the Norwegian economy has declined by more than 40 percent since 1990 indicating a decoupling of economic growth and energy use.

To modify long-term trends in anthropogenic GHG emissions and removals, the Norwegian government strategy included the following targets:

Reduce emissions by 30% by 2020
Reduce emissions by at least 40% by 2030
Climate neutrality by 2030
Low-emissions society by 2050

Specific measures to meet the targets involved a green tax shift (the polluter pays), continued preferential treatment of electric vehicles, promotion of carbon capture and storage (CCS) (for example, all new gas plants are required to implement CCS), forest fertilization and the restoration of peatlands and other wetlands.

Policies and Measures

Norway formulates policy on the polluter pays principle and a market based approach where prices reflect costs and externalities. As regards to GHG emissions, costs of externalities are reflected by levies and participating in the European Emissions Trading Scheme (EU ETS).

The Norwegian government estimates that with the climate specific measures implemented the country’s GHG emissions will decline by 1.2 percent a year from 2017 to 2030, reducing emissions by around 8 MtCO₂ equivalent in 2030 from the level in 2017. Most of the decline is expected in the non-EU ETS emissions (~6 Mt).

Norway believes the best way to reduce emissions on a global scale is to establish a global price on emissions to ensure cost-effective mitigation that would result in equal treatment of all emitters and all countries.

Abbreviations:

LULUCF – Land Use, Land Use Change and Forestry

OEC – Observatory of Economic Complexity

OECD – Organization for Economic Co-operation and Development

GDP – Gross domestic product; the total monetary value added through the production of goods and services in a country during a certain period

PPP – Purchasing power parity

GHG – Greenhouse gas emissions

Sources:

https://climateactiontracker.org/countries/norway/

https://docs.nordeamarkets.com/nordea-economic-outlook/economic-outlook-2020/EO-en-03-2020/?utm_source=oi-webpage&utm_medium=pdf&utm_campaing=eo2003-en

https://oec.world/en/profile/country/nor

https://unfccc.int/sites/default/files/resource/Norway_BR4%20%282%29.pdf