LONDON, Sept 14 (Reuters Breakingviews) – Norway’s electorate has gotten the green bug. One of the world’s richest states has elected left-leaning parties keen to do more to combat climate change. But any expectations that wealthy Norwegians will suddenly take a global lead on reducing planetary warming are unlikely to be met.
That may sound harsh. Jonas Gahr Stoere, the Labour leader likely to be the new prime minister, has committed to reducing domestic emissions 55% by 2030 compared to 1990 levels. He has also pledged to implement the findings last month of an expert government group aiming to focus Norway’s mammoth $1.4 trillion sovereign wealth fund more directly on removing global carbon emissions by 2050. And he will probably need to work in coalition with the Socialist Left party, which may want to move faster.
Still, neither Stoere nor Conservative predecessor Erna Solberg showed much willingness in the election campaign to reduce oil’s stranglehold over the Norwegian economy. According to Norsk Petroleum, the black stuff accounts for two-fifths of national exports, 14% of revenue and 7% of employment. Stoere had already made clear he would resist Green demands to halt domestic oil production by 2035.
Benchmarked against other states, Norway could wind up looking an also-ran. The UK has already pledged to cut emissions 68% by 2030 relative to 1990 levels. An influential International Energy Agency report from May said that no new investment should occur in oil, and crude production should start to fall immediately. As it stands, Norway’s crude output will keep rising at least until 2024.
Rather than just committing to halt certain types of exploration, Stoere could force a quicker exit from fossil fuels. Equinor (EQNR.OL), the $76 billion oil giant in which Oslo holds a 67% stake, has one of the most credible strategies to pivot to wind power. Norway’s oil fund, meanwhile, could easily cover the cost of hefty compensation payments for redundant oil workers: it pays an annual transfer worth 3% of its assets, which funds a fifth of the state’s roughly $200 billion yearly budget.
If any country can afford to be a leader on climate change, it’s Norway.