The Norwegian Paradox: Fighting climate change while selling the fuels that help cause it — National Petroleum Fund now called the Sovereign Wealth Fund


Norway’s Statoil has a designer headquarters. Photo by Eric Campbell

By Eric Campbell

Bjorn Otto Sverdrup is not a typical oil executive. While many of his Norwegian colleagues drive electric cars to tout their green credentials, he prefers a bike.

“You have to count the emissions produced from making the car,” he explains.

Walking into the uber designer headquarters of the state oil and gas company Statoil feels more like a visit to a funky digital company than a giant mining corporation.

I had worn a tie for the interview and took it off once I realised I was the only person in the building wearing one.

Mr Sverdrup’s title is senior vice-president for sustainability and he is proud to work for one of the world’s biggest fossil fuel companies.

“We’re set to grow to 9 billion people, we need energy to run our systems and we need to reduce the carbon intensity of our energy system,” he said.

“So that is really the challenge and we need responsible companies to be part of that.”

One of the big issues he feels responsible companies should push is a global carbon tax.

“It’s a very important instrument to fuel a transformation and provide incentives to minimise CO2 emissions,” he said.

“It might sound strange that an oil and gas company that kind of produces carbon is advocating ‘please put a tax on carbon’, but that’s actually what we’re doing.

“Last year we sent a letter to Christiana Figueres and the ones running the Paris agreement that said, ‘please introduce a CO2 tax because we need that’.”

Statoil cheerfully pays about $50 a tonne under Norway’s longstanding carbon tax.

Even petroleum minister Tord Lien — who is a member of the right-wing Progress Party in the conservative coalition Government — said the tax is working well.

“On the one hand that generates a lot of income to the Norwegian national treasuries but, on the other hand, it creates a very strong incentive for the industries to work really hard to reducing CO2 emissions,” he said.

Nation turning to electric cars

Red Tesla car in carpark

Amid growing concerns over climate change — particularly in the Arctic — Norway’s parliament voted in June to bring forward Norway’s goal of carbon neutrality from 2050 to 2030.

At the moment the main tool used to achieve this goal is buying carbon credits from the EU’s emissions trading system — effectively paying other countries to pollute less, while Norway keeps selling gas and oil.

But there are also strong measures to cut emissions at home — particularly in transportation.

Massive subsidies have now made electric cars cheaper in Norway than petrol or diesel cars. Tiny Norway is the biggest market for Teslas outside the US.

Mr Lien boasts Norway does not even have to burn fuel to make the electricity. It comes from water.

“Our very important and very efficient hydropower facilities supply 96 per cent of our total consumption of power, and on top of that we also have some very good wind resources that are being increasingly developed,” he said.

‘I see a time when oil companies will not exist’

Norway certainly has the money to pay for a green transition.

Rather than spending windfall profits on tax cuts, it invested them in a national Petroleum Fund, now called the Sovereign Wealth Fund.

With nearly $1,180 billion in capital, it’s grown into the world’s largest. Not bad for a country with just 5 million people.

The main architect of the fund when it was set up in the mid-1990s was a young civil servant named Martin Skancke.

He is now an international consultant to wealth funds, including Australia’s Future Fund, and advocates a carbon tax as a means of transitioning from a fossil fuel-dominated economy.

“I see a time when oil companies will not exist, because at some point we cannot produce more oil unless we find effective and efficient technologies to extract CO2 emissions,” he said.

“For coal I think it’s obvious that the best strategy is to get out of coal as soon as possible.”

One measure he hopes Norway will not follow is the Australian model of Direct Action — giving taxpayers’ money to companies that promise to cut emissions.

“I think you’ll find that over time, for a given emission target, this is a more costly way of doing it,” he said.

“As a general rule I would say that if you don’t like something, you should tax it and use that money to reduce other taxes in the economy that, for instance, distort your labour market.”


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2 Responses to “The Norwegian Paradox: Fighting climate change while selling the fuels that help cause it — National Petroleum Fund now called the Sovereign Wealth Fund”

  1. Rifleman III Says:

    Reblogged this on .

  2. daveyone1 Says:

    Reblogged this on World4Justice : NOW! Lobby Forum..

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