Norway Faces Tough Road to Zero Emissions in 2050
Date: 23-Apr-07
Country: NORWAY
Author: Wojciech Moskwa
Prime Minister Jens Stoltenberg's announcement on Thursday did not say how Norway, one of the world's biggest producers of oil and gas, planned to become so green.
The key question for Norway's offshore oil industry is what portion of the cuts will come through emissions reductions at home, and how much by buying permits to emit heat-trapping greenhouse gases from developing countries.
Greenpeace and other environmental groups say Norway should do more to limit its emissions of the greenhouse gas, widely blamed for global warming, and not simply use its vast oil wealth to buy its way out of the problem.
Industry argues, however, that emissions can be eliminated much more cheaply by funding clean energy projects in the coal-based economies of Asia or Eastern Europe, rather than further tightening the screw in an environmentally-aware Norway.
"Of course Norway can afford to pay a lot to buy permits abroad but it also has a moral obligation to make cuts at home, as a developed country that is rich with oil," Frederic Hauge, head of Norwegian environmental group Bellona, told Reuters.
"This is a chance to guide industry to develop new environmentally-friendly technology and the market to use it in one of the richest countries in the world."
Norwegian firms have pioneered carbon capture and storage (CCS) technology, with the Sleipner gas field in the North Sea burying its emissions under the seabed. But better technology or state aid is needed to make CCS work on a bigger scale.
Stoltenberg's plan also envisages Norway unilaterally sharpening its commitments under the UN's Kyoto Protocol for fighting climate change to 2012 and cutting emissions by 30 percent by 2020, more than the European Union's 20 percent goal.
HYDROPOWER
Norway's ability to cut domestic emissions is limited because almost 100 percent of electricity is generated from hydropower, which produces almost no carbon dioxide. That means the main burden would fall on industry and the transport sector.
Norway's emissions are already far above its 2012 Kyoto target and the goal is set to get tougher because the country plans to build new gas-fired power plants after damming all available rivers for hydropower.
Stoltenberg, the leader of the moderate Labour party which leads a coalition with centrist and leftist allies, signalled that Norway's industry should not pay the brunt of the costs.
"It's much more important to reduce emissions in the world than to impose pain on ourselves," he told reporters. "Measures should be taken where they can have the greatest effect."
Some of Norway's industry is resisting joining the country's forthcoming domestic carbon trading scheme until the government lifts existing carbon taxes, some analysts say.
"We have the best available technology to limit emissions because we have lived with the world's highest CO2 tax since the early 1990s," said Per Terje Vold, managing director of Norwegian oil industry association (OLF).
"So the cost of additional improvements here are much higher than in East Europe or in Asia, for example. The same investment there could get a 10 to 20 times bigger cut in emissions."
But daily Aftenposten reported that a small far-left party in government wanted two-thirds of the emissions cuts to be made by Norwegian industry -- signalling tough cabinet negotiations ahead and ringing alarm bells for the oil and gas business.
JOBS
Trade unions, worried about extra costs possibly shifting jobs offshore, also want Norway to neutralise emissions mainly through actions abroad.
Offsetting all of Norway's 54 million tonnes of annual CO2 emissions would cost about 500 million euros (US$680.5 million), given carbon credit prices of 10 euros per tonne, a fraction of Norway's US$300 billion oil savings.
"If Norway buys itself a get out of jail free card it would send the wrong signal to other countries just as it seek