The signing of the Paris Climate Accord last year is probably the boldest global statement ever made to tackle climate change. And, with much press coverage of how the United States could become the only country in the world not party to the accord, perhaps another nation could become the beacon to light the way. For many, Norway could be that shining example.
Norway is already well-known for its ideas to safeguard the future, such as housing the Svalbard Global Seed Vault, and its national wealth fund. Since the 1990s, this fund has redirected almost $1 trillion of surplus from the lucrative oil sector to cover the cost of Norway’s social programs (although it has vastly diversified its sources of income since its formation). Norway is also well known for its liberal social policies, which in recent years have taken a turn towards environmentalism.
Norway has been developing its sources of renewable energy for a long time, to the extent that last year it claimed to produce 98% of its electricity from renewable sources, mostly from hydropower. Not content with just 98%, Norway has plans to develop its renewable power further still. For example, there are plans to build a number of new on-shore wind farms; although in some places the local Sami people have been concerned by the impact these farms will have on their way of life.
Another major policy which has caught global attention has been Norway’s approach to promoting electric cars. Norway offers massive tax breaks to those who purchase electric cars, leading to a spike in the sales of Teslas. The plan is not flawless though, as some Norwegians have complained that it costs a lot of money to incentivise only a small number of wealthy people to switch to electric vehicles, and not common people. Nevertheless, the government is keen to continue this policy, having recently reached an internal agreement to cancel planned cuts to the tax rebate.
Norway even made a recent shock announcement that it would sell off all of the petroleum stocks held by its national wealth fund – the very stocks that grew it so large in the first place, earning it the nickname ‘Oil Fund’. Having already sold off most of its coal stocks, the announcement was welcomed by environmentalists. Given these progressive ideas and its success in almost entirely weaning its power production off of fossil fuels, Norway seems an obvious candidate to lead the charge for a global environmentalist movement.
However, is Norway as green as some would claim it is? After all, its economy has for a long time been incredibly reliant on the production and export of fossil fuels. In 2016, Norway was the world’s 10th biggest exporter of crude oil, making $22.6 billion in the process. In fact, adding Norway’s petroleum gas and refined petroleum exports to this, the sum comes to $46.71 billion, accounting for 52.6% of Norway’s export revenue and one fifth of Norway’s entire economic output. The oil sector is also important for Norwegian jobs. The Norwegian Ministry of Petroleum and Energy claims that the oil sector directly or indirectly employs over 180,000 people, about 7% of Norway’s total employment; even after recent mass lay-offs due to the fluctuations in global oil markets.
Norway’s role in the oil business is not expected to wind down though, as the future of oil extraction is clearly present in the minds of the government as well. Norway has plans to begin exploration for new oilfields in the Arctic Ocean, for which it is being sued by Greenpeace. The case being brought against the Norwegian government is two-fold: first, that the plans violate a constitutional environmental law called Section 112, and secondly that expanded oil production would violate the targets set by the Paris Accord.
Norway has also recently clashed with the EU over permits for catching snow crabs off the coast of Svalbard. However this too has been motivated by worries it would set a precedent for other countries to attempt to tap Norway’s oil reserves, rather than any issues pertaining directly to the crabs, such as overfishing or exploitation of the Arctic. The Norwegian government clearly has plans to discover new oilfields and expand its extraction operations, despite studies having suggested for a number of years that the world already has access to more fossil fuels than it safely burns without seriously damaging the environment.
Even the massive sell-off of the wealth fund’s petroleum stocks isn’t genuinely motivated purely by environmental concerns. Instead, this seems to be mainly influenced by concerns over the future of the oil sector, especially follow turbulent times for the global oil prices and the recent aforementioned job-cuts. The sell-off is not even as significant as many would imagine, as these stocks now only account for 6% of the fund’s stockholdings. This ‘environmental’ move is therefore a shallower gesture than it would first appear.
Norway finds itself in a paradoxical situation. On one hand it is pioneering environmental policies, and has developed a system of renewable power that puts the rest of the world to shame. Yet on the other hand it fuels global warming through the mass export of fossil fuels, contrary to its massive domestic success with renewables. Additionally, Norway clearly has plans to continue or even expand its oil sector, despite even its own worries about the future of the industry. It could therefore be said that rather than shrinking its carbon footprint, Norway has simply been exporting it. Which begs the question: is Norway actually looking to help the planet or just to help itself?
Tristan Fleming-Froy
