Norway

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Critically Insufficient4°C+ World

NDCs with this rating fall well outside of a country’s “fair share” range and are not at all consistent with holding warming to below 2°C let alone with the Paris Agreement’s stronger 1.5°C limit. If all government NDCs were in this range, warming would exceed 4°C.

Highly insufficient< 4°C World

NDCs with this rating fall outside of a country’s “fair share” range and are not at all consistent with holding warming to below 2°C let alone with the Paris Agreement’s stronger 1.5°C limit. If all government NDCs were in this range, warming would reach between 3°C and 4°C.

Insufficient< 3°C World

NDCs with this rating are in the least stringent part of a country’s “fair share” range and not consistent with holding warming below 2°C let alone with the Paris Agreement’s stronger 1.5°C limit. If all government NDCs were in this range, warming would reach over 2°C and up to 3°C.

2°C Compatible< 2°C World

NDCs with this rating are consistent with the 2009 Copenhagen 2°C goal and therefore fall within a country’s “fair share” range, but are not fully consistent with the Paris Agreement long term temperature goal. If all government NDCs were in this range, warming could be held below, but not well below, 2°C and still be too high to be consistent with the Paris Agreement 1.5°C limit.

1.5°C Paris Agreement Compatible< 1.5°C World

This rating indicates that a government’s NDCs in the most stringent part of its “fair share” range: it is consistent with the Paris Agreement’s 1.5°C limit.

Role model<< 1.5°C World

This rating indicates that a government’s NDC is more ambitious than what is considered a “fair” contribution: it is more than consistent with the Paris Agreement’s 1.5°C limit.

Current policies overview

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 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 47 MtCO2e up to 2030. This illustrates the need for further policy reforms. Even though Norway’s 2030 target is to be achieved through a mix of efforts domestically and abroad, Climate and Environment Minister Vidar Helgesen recognised "that the 2030 goal of reducing emissions by 40% can be reached with the main emphasis on domestic emissions reductions" (Ministry of Climate and Environment., 2017). Yet a big share of the country’s reduction requirements could still rely on international climate action and purchase of emissions quotas under the European regulatory framework. Such investments and purchases abroad are grounded on the cost-efficiency argument, considering that reductions in other countries are overall cheaper than more aggressive national policies.

Energy supply

Electricity generation in Norway is almost exclusively renewable. Hydropower constitutes 96% of the electricity generation on average. Wind power contributes approximately 2% of the energy generation, with thermal power plants accounting for the rest. The country’s electricity sector can be considered almost carbon neutral.

Industry

Norway is home to the biggest hydrocarbon reserves in Europe, making it the 5th largest exporter of crude oil in the world. The oil and gas sector constitutes around 22% of Norwegian GDP (Statistik sentralbyrå., 2017).

Historically, Norway’s most important instrument to tackle GHG emissions has been the carbon tax on petroleum activities levied on offshore drilling activities since 1991. In 1999, under the White Paper on energy policy, the government adopted additional energy and CO2 taxes. The taxation level is not the same for all sectors, with higher rates for oil-related activities. Since the introduction of the EU-ETS (EU Emissions Trading Scheme), the rate levels have been subject 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, the Norwegian government increased the offshore carbon tax, which was set at around €50 per tonne CO2 in 2015, being charged in addition to the EU-ETS. This led the Norwegian oil and gas extraction sector to decrease its emissions intensity to about 55 kg CO2 per tonne oil equivalent (toe) extracted in 2012, against a world average of 130 kg CO2 (Gavenas, Rosendahl, & Skjerpen, 2015).

It is expected that the petroleum industry will remain an important sector for the Norwegian economy for decades to come, even with a lower oil price (Royal Ministry of Finance, 2015). However, higher emissions intensity due to the shrinking of existing fields and new exploration in marginal and less accessible ones, as well as increased explorations in sensitive regions such as the Barents Sea, could lead Norway to miss its 2030 carbon neutrality target (Gavenas et al., 2015; Ministry of Petroleum and Energy., 2016).

Transport

The government has flagged that its main effort for decarbonisation of its non-quota sectors, mainly composed of agriculture, transport, waste and construction, will be aimed at its transport sector. Building on this, Norway included the low-emissions transformation of its transport system as one of the three main goals of its National Transport Plan 2018–2029 (Ministry of Transport., 2016). The budget for 2018 sets aside NOK 20 million targeted at research efforts in the transport and agriculture sectors to complement Norwegian climate targets,.

In February 2017, electric cars held a market share for new car sales of 15.8%, or 33% when including rechargeable hybrids. With its new legislation, Norway expects that all new passenger cars and light vans will be zero-emission vehicles by 2025, and new city buses will be zero-emission or run on biogas by the same year. Electric car incentives are expected to continue at least until 2020, including differentiated taxes and tolls, VAT exemption for new zero-emission units, creation of low-emission zones in cities and access to bus lanes. Electrification is also planned for railways, substituting old diesel-fuelled lines to achieve emission reductions, but also higher train speeds and cost competitiveness against road transport, given the country’s low electricity costs. Other policies involve the development of urban and public transport, and a goal of at least 1% sustainable biofuel in aviation from 2019, increasing to 30% by 2030 (Ministry of Climate and Environment., 2016).

Buildings

Norwegian building regulations have tightened over the last two decades. The building code limits on energy consumption for individual homes decreased from 173 kWh/m2 in 1997 to 125 kWh/m2 in the regulations adopted ten years later. For new and refurbished apartments, the maximum energy consumption decreased from 149 kWh/m2 in 1997 to 120 kWh/m2 in 2007. In November 2015, new Building Codes called TEK17 were adopted, introducing stricter limits for different categories of new and refurbished builds that became binding for all homeowners in 2017: 100 kWh/m2 for single houses, 95 kWh/m2 for apartments and 115 kWh/m2 for offices. (Buildup, 2015; Direkoratet for Byggkvalitet, 2017; Faschevsky, 2016).

Homeowners are also encouraged to increase the share of renewables produced domestically. Should an equivalent of more than 20 kWh/m2 be produced on the property, the respective limit on energy consumption can be exceeded by 10 kWh/m2 (Buildup, 2015).

Norway has also introduced a ban on fossil fuel (oil and paraffin) heating systems. This has been phased in since 2016 and will be in full force from 2020 onwards. The ban will apply to both old and new buildings and both private homes and public spaces of businesses and state-owned facilities (Reuters, 2017).

Forestry

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 (Ministry of Climate and Environment., 2014). In addition, there is a strong push for rainforest initiatives. The Norwegian Government plans to pay for approximately 30 million tonnes of reduced CO2 emissions in 2018. This initiative is aimed at supporting efforts in developing countries to reduce greenhouse gas emissions.