Should Norway choose to postpone the implementation of the climate targets, we run two risks, writes Terje.
Parliament of Norway. Image credit: Rastech Magazine
Norway is struggling to speed up climate change. It is therefore not surprising that leading politicians from the Center Party have advocated postponing the implementation of the target of a 50 to 55 per cent cut in greenhouse gas emissions by 2030.
"Norway is not going to achieve this goal [...] Someone must dare to say it out loud [...] I am honest that we must use flexible mechanisms such as quota purchases in the coming years [...] Are you going to force through that goal, does it entail a sharp reduction in Norwegian industrial and food production?", says Marit Arnstad, parliamentary leader in the Center Party, to Dagbladet on 22 February .
Photo of Marit Arnstad, the parliamentary leader in the Center Party. Photo credit: Adressa Norway
The idea that Norway can meet its obligations through so-called "flexible mechanisms", or the purchase of climate quotas in other countries, is based on a misunderstanding.
It is correct that the Paris Agreement sets up flexible mechanisms - that is, individual countries or companies can enter into agreements where a country can either finance climate measures in countries, or by purchasing a new type of climate quotas, so-called ITMOs (International Transferable Mitigation Outcomes). But the EU does not accept that the countries that are already part of the European quota system should also be able to meet their obligations by buying climate quotas in countries outside the EU. Furthermore, the regulations for the UN's new climate quotas are not yet in place, and it is unclear how many COP meetings will be needed before the countries are able to agree on how "flexible mechanisms" are to be implemented, quality assured and recorded.
However, Norway already uses the flexible mechanisms that exist to some extent through the European emissions trading system of which we are a part. This is now being somewhat expanded through the introduction of the EU's climate package "Ready for 55". But no matter how much we choose to utilize the flexibility of the EU system, it will only be a small part - perhaps 10 to 15 per cent - of our emissions targets that can be covered in this way.
On the other hand, we can buy climate quotas outside the EU in order to reach goals that go further than those we have committed to in the Paris Agreement, as the Storting must have thought when they decided in 2016 that Norway should be carbon neutral as early as 2030.
An example of how this can be done is Sweden. They have entered into bilateral agreements with Ghana, Nepal and the Dominican Republic on the development and purchase of UN-approved climate quotas within the framework of the Paris Agreement, so-called ITMOs.
The background to the debate on the climate goals is that Norway - like all other signatory states to the Paris Agreement - is obliged to work to achieve the goal of limiting global warming to two degrees, and preferably down to 1.5 degrees.
Like the EU, Norway has undertaken an obligation to reduce emissions of greenhouse gases by at least 55 per cent in 2030. The emerging emission countries - such as China, India and others - have also entered into important obligations regarding climate change and climate neutrality, even though the obligations of non- The OECD countries still have a lower level of ambition than what applies to the industrialized countries that have historically been responsible for the largest emissions.
It is easy to agree that today it seems unlikely that Norway, the EU or the world will be able to achieve 100 per cent of the climate targets. But climate policy is non-binary:
Either you reach your goals or you don't. As in almost all other areas, the target, in this case the UN-adopted and scientifically modified "tolerance limit" of 1.5 degrees of warming, acts as a rule of action that authorities, investors and companies must strive for and will be measured against. As we gain more knowledge about accelerating warming and climate-induced natural disasters, we will see increasing pressure on authorities and business with demands for a tighter climate policy.
It is in the light of this that we must assess the proposals from Sp-hold that Norway must revise its ambitions in the climate area. Should Norway choose to postpone the implementation of the climate goals, for example by postponing the transformation in agriculture or by opening new exploration areas for oil, we run two risks.
The biggest risk consists of the contagion effect or the negative "power of example". Should Norway follow the advice of Marit Arnstad and other SP politicians, it is easy to imagine that more leaders in other countries struggling with climate change will do the same.
The result will be more deforestation, more coal-fired power and a battle among the oil-producing countries to develop more and more of the "last oil". The consequence will be a setback for global climate change, and the world sliding towards warming approaching three degrees. The financial losses for Norway - and not least the Oil Fund - as a result of such a catastrophic development, will be many times greater than what it will cost Norway to implement the climate goals.
The other risk is that the demand for oil falls as the IEA and other analysis agencies estimate. It takes 15 to 20 years from the time you start looking for a potential discovery to come into production. In the IEA's so-called Announced Pledges Scenario - which assumes that the countries will implement the climate commitments they have announced - oil demand falls from the current level of approximately 100 million barrels to 70 million barrels by 2035.
If this is the development, new oil development projects on the Norwegian continental shelf - which have a longer payback period compared to, for example, the "low-cost producers" in the Gulf - could cause major socio-economic losses.
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