Norway

Paris Agreement target

Norway signed and ratified the Paris Agreement on 20 June 2016. Since Norway made no new submissions, its INDC (submitted in March 2015) automatically became its NDC. The NDC states the goal of reducing emissions by at least 40% below 1990 by 2030 (UNFCCC, 2015).[1] Norway’s current intention is to fulfil its commitment collectively with the EU. The European Commission has proposed a preliminary target for Norway for emissions reductions in sectors outside the EU Emissions Trading System of 40% by 2030 in comparison to 2005 levels. Final targets remain subject to further calculations by the Commission (Ministry of Climate and Environment, 2016). The target is based on Norway’s high GDP relative to other European countries (both Luxembourg and Sweden have also been given reduction targets of 40%).

Although the base year for Norway’s NDC is set with respect to GHG emissions excluding LULUCF in 1990, Norway intends to use the land-use, land-use change and forestry sector. The NDC submission states that the 40% reduction commitment includes additional measures in the land sector, but the ‘final choice of land sector accounting shall not affect the ambition level for 2030.’  The exact meaning of this statement, however, is unclear, and open to quite different interpretations.

In this assessment, based on the information in the NDC, our interpretation of the meaning of the LULUCF approach is the following: the 40% reduction commitment is compared to 1990 GHG emissions excluding LULUCF, and this metric is to be achieved irrespective of the additional measures taken in the land sector. This approach is justified by Norway’s statement that the final choice of land sector accounting will not affect the ambition level compared to the case where this sector is not included.

According to Norway’s NDC, the LULUCF sink will grow from 10.1 MtCO₂e in 1990 to 21.2 MtCO₂e in 2030 The submission text (footnote 2) suggests that only reductions in addition to those in the base year and already projected can be counted as credits toward meeting the 2030 target. However, the supporting text is not completely clear as to how the LULUCF sector will be incorporated into the final target, and the conditions described in the NDC submission make it difficult to evaluate the assumed contribution of this sector. The submission states that if the projected increase in the sink between 1990 and 2030 (11.1 MtCO₂e) were credited, the 2030 target would be recalculated so that the ambition level does not change. We estimate that this would mean that a target of about a 60% emissions reduction (including. LULUCF) below 1990 levels would be needed to produce the same outcome of 40% emissions reduction without LULUCF.

In addition, its NDC includes a conditional element with regard to its target of carbon neutrality; “as part of an ambitious global climate agreement where other developed nations also undertake ambitious commitments, Norway will adopt a binding goal of carbon neutrality no later than in 2030.” The NDC specifies “that Norway will commit to achieving emission reductions abroad equivalent to Norwegian emissions in 2030. In June 2016 the Norwegian government approved the goal of achieving climate neutrality by 2030 through “the EU emissions trading market, international cooperation on emissions reductions, emissions trading and project-based cooperation” (“Komiteens tilråding,” 2016).

2020 pledge and Kyoto target

Kyoto Protocol second commitment period (2013–2020)

Norway's target under the Kyoto Protocol’s second commitment period (2013–2020) is to reduce average GHG emissions (excluding LULUCF) by 16% (QELRO [2] of 84) from 1990 levels, equivalent to about a 41% reduction in the year 2020, taking into account the emissions from 2013 and 2014 and assuming a linear pathway reduction from current levels [3]. Under the Kyoto Protocol’s Land Use Change and Forestry accounting provisions, CAT estimates that Norway is likely to get an annual credit equivalent to about 1.7–3.4% of 1990 GHG emissions excluding LULUCF over the period 2013–2020. This would result in a 26–39% reduction of GHG emissions excluding LULUCF in the year 2020 [4]. The actual level of domestic emissions reductions would also depend upon emissions trading and the level of Joint Implementation (JI) and CDM (CER) units acquired or held.

With currently implemented policies and measures, Norway’s emissions are expected to increase by around 10% above 1990 levels in 2020 in GHG emissions excluding LULUCF, reaching emissions of roughly 52 MtCO₂e by 2020. According to these projections, Norway will not be able to meet its Kyoto target (see figure) without acquiring emission units internationally or introducing new policies. National policy is to reduce two thirds of its GHG emissions domestically and to purchase emission units for the rest, to the tune of up to 30 million credits during the Kyoto Protocol second commitment period.

Copenhagen Pledge

Prior to adoption of the Kyoto Protocol second commitment period target, in 2010 Norway pledged to reduce emissions by 30–40% below 1990 levels by 2020 with the 40% reduction target conditional on global action.

Long-term goal

Norway’s long-term goal is to become a low emission society by 2050, a goal that Norway has agreed to try to fulfil by 2030. Norway also aims to achieve this through the EU emissions trading market, international cooperation on emissions reductions, emissions trading and project-based cooperation. 

Footnotes

[1] The base year emissions specified in the NDC are all greenhouse gases not controlled by the Montreal Protocol and in effect Kyoto Annex A sources - Energy; industrial processes and product use; waste.

[2] The QELRO, expressed as a percentage of Kyoto Protocol Annex I GHG emissions and sources in relation to the base year, denotes the average level of emissions that an Annex B Party could emit annually during a given commitment period.

[3] Starting with reported Kyoto Annex A emissions in 2012 and assuming a linear decline in these emissions until 2020 so that cumulative emissions in 2013–2020 are equal to the total Kyoto assigned amount based on the QELRO.

[4] Assuming that the LULUCF credits are effectively added to the QELRO and starting with reported Kyoto Annex A emissions in 2012, with a linear decline in these emissions until 2020 so that cumulative emissions in 2013-2020 are equal to the total Kyoto assigned amount based on the QELRO plus the LULUCF credits.

We rate Norway’s NDC for 2030 “medium”, a rating also applicable to its likely Kyoto Protocol second commitment period 2020 outcome and Copenhagen pledge. This means it is not consistent with limiting warming to below 2°C, let alone with the Paris Agreement’s stronger 1.5°C limit, unless other countries make much deeper reductions and comparably greater effort.

This means that Norway’s 2030 target (and 2020 Kyoto goal) is only in line with the less stringent emissions reductions required from the effort-sharing approaches assessed by the CAT. In particular, they are consistent with a global 2°C pathway only according to the “equality” proposals, but not under the Responsibility/capability/need category.

In its NDC, Norway argues that “it is doing its fair share for the global goal of keeping global warming below 2°C compared to pre-industrial levels” and sources this to the IPCC AR5 results: “(A)n emissions reduction target of 40% by 2030 compared to 1990 is at the high end of emission reductions that should be implemented by OECD-countries, given a global cost-effective, regional distribution of emission reduction targets (IPCC WGIII, table 6.4).” 

This appears to reflect a misunderstanding of the global cost-effective emissions pathways, which do not include equity and fairness assumptions, but simply reflect where emissions reductions are most cost-effective.  Cost-effectiveness itself is not a measure of equity and fairness of effort and hence of allocation of emission effort, but rather an economic principle to be applied after an emission effort allocation has been made.

Since 1990, GHG emissions in Norway have slightly increased, reaching 52 MtCO₂-eq in 2014 (excluding LULUCF). This level was above the Kyoto Target in 2012, and Norway purchased 21.5 million carbon credits to offset its surplus (IETA 2013).

Under the current policy projections, Norway will not be able to reach either its 2020 or its 2030 targets, as GHG emissions are projected to stabilise at current emissions levels of around 52 MtCO₂e up to 2030. This stands in stark contrast to Norway’s goal to be carbon neutral by 2050, and illustrates the need for further policy reforms. Even though this goal is to be achieved through a mix of efforts domestically and abroad, Climate and Energy Minister Vidar Helgesn recognised that Norway “must be prepared to take the majority of cuts at home“ (Ministry of Climate and Environment, 2016).

Norway has a substantial carbon sink in its forests: with 30% of its land surface covered by forest, the sink equals approximately half of Norway’s annual emissions. But the net uptake of CO₂ in 2020 is projected to decrease from 24 Mt/yr to around 20 Mt/yr towards 2030 (Norwegian Ministry of Climate and Environment, 2014)).

The country’s electricity sector is almost carbon neutral, as hydropower facilities cover roughly 95% of domestic generation.

One of the flagship policies is found in Norway’s efforts to electrify its transport sector. The policy mix is widely praised as creating good incentives, and its success is visible in the fact that Norway is the world leader in the number of electric cars per capita (The New York Times, 2015). The zero emissions incentives include exemption from 25% VAT on purchase, no charged on toll roads or ferries, low annual road tax, free municipal parking and access to bus lanes. The overarching principle is the “polluter pays” principle and the conviction that it should be economically feasible to choose electric cars over combustion cars. In order to ensure development of the necessary infrastructure, Norway also launched a programme to finance the establishment of at least two multi-standard, fast-charging stations every 50 km on all main roads in the country by 2017 (European Alternative Fuels Observatory, 2016).

At the same time Norway is home to the biggest hydrocarbon reserves in Europe, making it the 5^th largest exporter of crude oil in the world. The oil and gas sector constitutes around 22% of Norwegian GDP and 67% of Norwegian exports (European Commission, 2016). Historically, Norway’s most important instrument to tackle GHG emissions has been the carbon tax on petroleum activities levied on offshore drilling activities ince 1991. . In 1999, under the White Paper on energy policy, the government adopted additional energy and CO₂ taxes. The taxation level is not constant across sectors, with higher rates for oil-related activities. After the introduction of the EU-ETS (Emissions Trading Scheme), the rate levels are subjected to revisions to embed changes in the price of carbon. Due to the low price of carbon traded in the framework of the EU ETS, in 2013 the Norwegian government increased the offshore carbon tax by 200 NOK (~22 €) per tCO₂-eq (IETA 2013).

While Norway states that the “petroleum industry will remain important for the Norwegian economy for decades to come” it also recognises that “the Norwegian economy and the industrial structure are in need of restructuring” due to decline in the oil price (Royal Ministry of Finance, 2015). But even though the climate policies in the electricity and transport sectors are having an impact on emissions, in the long run, Norway will need to fully decarbonise its economy, especially by decreasing its dependence on the oil and gas sector, in order to refrain from acts that would defeat the object and purpose of the Paris Agreement that Norway signed and ratified  - it was one of the first governments to do so.  

Pledge

The Copenhagen pledge, as well as NDC and long-term target were calculated from the most recent national inventory submissions (CRF, 2016).

While Norway intends to become a carbon neutral nation, only part of the cuts in total emissions by 2050 would be made domestically and would include their LULUCF sector, which is currently a large sink. LULUCF removals are projected to slightly decline in 2030, reaching 21 MtCO₂. In our analysis we assume that LULUCF stay at this level until 2050.  As a result, a carbon neutrality target in 2050 entails a pledge of 21 MtCO₂.

Current Policies

The current policy projections are based on Norway's second Biennial Report (Norwegian Ministry of Climate and Environment, 2015). Historical data is based on CRF 2016.

Sources

CRF (2014). UNFCCC AWG-KP Submissions 2014. Common Reporting Format.

European Alternative Fuels Observatory. (2016). Norway. 

European Commission. (2016). Norway.

Government of Norway (2015) Norway’s Intended Nationally Determined Contribution

Government of Norway (2012) Information by Parties included in Annex I listed in annex 1 to decision 1/CMP.7 on their quantified emission limitation or reduction objectives for the second commitment period under the Kyoto Protocol 

Government of Norway (2011)  Submission to the Ad-Hoc Working Group on Further Commitments for Annex I Parties under the Kyoto Protocol (AWG-KP): Forest management reference level

Government of Norway (2010). Norway's pledge to the Copenhagen Accord. Compiled in: Compilation of economy-wide emission reduction targets to be implemented by Parties included in Annex I to the Convention, UNFCCC (2011).

Government of Norway (2009) Submission to the Ad-Hoc Working Group on Further Commitments for Annex I Parties under the Kyoto Protocol (AWG-KP): Data on forest management

IETA (2013): Norway The World’s Carbon Markets: A Case Study Guide to Emissions Trading, Last Updated: May, 2013 

IRENA (2013): Renewable energy country profile – Norway.

Komiteens tilråding. (2016).

The New York Times. (2015). Norway Is a Model for Encouraging Electric Car Sales. 

Norwegian Ministry of Climate and Environment. (2015). Norway’s second Biennial Report.

Norwegian Ministry of Finance (2013). Perspektivmeldingen 2013. Stortingsmelding Nr. 12 (2012-2013) (white paper) 

Norwegian Ministry of the Environment (2012). Norwegian Climate Policy, Stortingsmelding Nr. 21 (2011-2012) (white paper).

Norwegian Ministry of Petroleum and Energy (2011). Fullskala CO2-håndtering. Stortingsmelding Nr. 9 (2010-2011) (white paper)

Norwegian Ministry of climate and environment (2014): Norway’s Sixth National Communication, Norwegian Ministry of climate and environment 

OECD (2014): Economic Surveys: Norway 2014, OECD Publishing, DOI: 10.1787/eco_surveys-nor-2014-en

Reuters (2015). “UPDATE 3-Norway to match EU on climate goals, easing oil industry fears“. Wed Feb 4, 2015 10:45am EST

Royal Ministry of Finance. (2015). The National Budget 2015, A Summary.

UNFCCC (2015): INDCs as communicated by Parties

UNFCCC. (2016). Base year data.