Waking the Norwegian green giant
As one of the world s leading exporters of natural gas, Norway faces a unique challenge in a world that is increasingly moving away from fossil fuels. The country has all the financial, technological, and human resources it needs to thrive in a decarbonized future; what s missing is policy leadership
11 May 2021 |
Mariana Mazzucato and Rainer Kattel
Responding to the climate emergency is a challenge for everyone, but particularly for countries that are economically reliant on petroleum extraction or production. Decarbonization has created an opportunity for many countries to pursue a green industrial revolution. But as more countries embrace this route to future prosperity, the value of fossil fuel assets, technologies, and capabilities will diminish, threatening jobs, export revenues, and industrial innovation in petroleum-dominated economies.
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Among these economies, Norway, the world’s third-largest natural-gas exporter, faces a unique challenge. But, while Norway’s industrial structure and investments are heavily tied to carbon-based industries and services, with hydrocarbons accounting for 36% of total exports in 2019, the country’s domestic energy comes almost entirely from renewable resources (hydropower). The Norwegian economy thus would be ripe for a green industrial transition, except that falling global demand for fossil fuels will hamper its main growth engine.
Norway’s carbon “lock-in” is a symptom of Dutch disease – the problem of one dominant sector’s success coming at the expense of most other sectors. Since hydrocarbon investments dwarf investments in other industries, the fossil-fuel sector attracts the most high-skilled talent. At the same time, the oil and gas sector’s extraordinary profitability has inflated price and wage growth in the rest of the economy, creating difficulties f
Paradox or hypocrisy? Norway s renewables vs oil and gas debate
Now a major player in renewables, especially hydroelectricity, Norway s nearly €1.1 trillion sovereign wealth fund largely derives from its oil and energy bonanza (Photo: Benedicte Meydel)
Oslo and Trieste, Today, 07:06
Environmental awareness is high in Norway. Spending time outside in nature is for many a rule of life, and holidays are often spent in their hytter – cabins in the forest or on the coast, known for their minimalist style.
Norway recycles 97 percent of its plastic-drinks bottles. In Oslo as in Stavanger, the country s oil capital, or in Tromsø, in the Arctic, people prefer to travel by public transport, bicycle or electric car. Some 54 percent of all new cars sold last year were electric; the parliament has decided that all new cars sold by 2025 should be zero emissions.