Paradox nation: Norway, a climate leader making money on oil

Published 02.08.2016 00:00
Updated 02.08.2016 00:27
A supply ship at the Edvard Grieg oil field, in the North Sea.
A supply ship at the Edvard Grieg oil field, in the North Sea.

Norway wants to get rid of gasoline-fueled cars, plans to become carbon neutral by 2030 and spends billions on helping poor countries reduce their carbon footprints. Meanwhile, it's pushing ever farther into the Arctic Ocean in search of more oil and gas.

"We know there is a paradox," admits Vidar Helgesen, Norway's climate and energy minister. "We have been living well from oil and gas. But there is no country in the world that has done more to undermine the oil and gas industry than Norway."

The mountainous Scandinavian country of 5 million people is torn between its ambition to be a global leader on climate change and the awareness that its wealth is linked to the world's dependence on fossil fuels. This apparent contradiction is particularly striking in Stavanger, Norway's oil capital. The west coast town is the hub of an offshore industry that has made Norway the world's eighth biggest exporter of oil and third biggest exporter of natural gas. Norway's $875 billion oil kitty is the world's largest sovereign wealth fund, and hydrocarbons account for 40 percent of Norwegian exports. But very little of those fossil fuels are used at home. Like the rest of the country, Stavanger gets almost all its electricity from hydropower. And the streams of Teslas driven by oil workers through the streets of Stavanger attest to the rich subsidies the government has poured into the electric car market. E-cars have zero import duty, sales tax is a quarter less than for conventional vehicles and most roads are free. Some 29 percent of new cars sold in Norway are electric or hybrid. The government in June introduced a target of 100 percent by 2025.

Helgesen says Norway's example is spreading around the world, with once skeptical car manufacturers investing in green technology and speeding the transition away from hydrocarbons. In June, lawmakers forced through a commitment for Norway to become carbon neutral by 2030 - some 20 years ahead of schedule.

Norway is also one of the most generous donors to international initiatives to maintain rainforests, which help fight climate change by absorbing some of the heat-trapping carbon dioxide released by the burning of fossil fuels.

It has already spent $1 billion saving trees in Brazil and is committed to spend up to $350 million a year preserving trees in places like Indonesia and Guyana.

But Norway is accused of environmental hypocrisy, grandstanding overseas with environmental projects while allowing its domestic oil and gas industry to pump ever larger quantities of carbon into the atmosphere. Plans for carbon neutrality involve buying credits for helping reduce emissions abroad.

In fact, Norway was one of the few Western countries to see a rise in domestic carbon emissions in 2015. That was mainly due to the fact that its aging North Sea oil fields require ever more energy to tap depleting reservoirs.

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