Summary in English: Report No. 34 (2006–2007) to the Storting

Published by:Norwegian Ministry of the Environment

Internet adress: www.government.no

Coverillustration: Thomas Bickhardt, Scanpix

Printed by: 07 Gruppen AS 04/2008 – Impression 1000

Summary in English: Report No. 34 (2006–2007) to the Storting

Norwegian climate policy

MILJØMERKET

241 379 Trykksak

omslag.indd 1 04.04.2008 10:57:29

____________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

____________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

____________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

____________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

____________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

____________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

____________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

____________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

____________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

____________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

____________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

____________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

____________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

____________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

____________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

____________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

____________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

____________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

____________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

____________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

____________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

____________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

____________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

____________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

____________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

____________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

____________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

____________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

____________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

____________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

____________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

____________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

____________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

____________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

____________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

____________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

____________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

____________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

____________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

____________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

____________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

____________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

____________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

____________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

____________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

____________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

____________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

____________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

____________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

____________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

____________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

____________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

____________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

____________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

___________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

2 NOU 2001: 11Lillestrøm-ulykken, 5. april 2000

.

Table of Contents

1 The Government’s climate policy goals . . . . . . . . . . . . . . . . . . . 9

1.1 Principles underlying the climate policy goals . . . . . . . . . . . . . . . . . . . . 9

1.2 The Government’s long-term targets 101.3 Voluntary strengthening of Kyoto

commitments . . . . . . . . . . . . . . . . . . 10

2 The Norwegian Government’s international climate change strategy . . . . . . . . . . . . . . . . . . . . . . . 12

2.1 Climate change requires an international response . . . . . . . . . . . 12

2.2 New and better international climate agreements are needed . . . 12

2.3 We must help to limit the growth in emissions in other countries . . . . . . 14

2.4 We must help developing countries to adapt to climate change. . . . . . . . 15

2.5 Cooperation with the UN on carbon neutrality. . . . . . . . . . . . . . . . 15

2.6 Climate issues and trade . . . . . . . . . 18

3 The Government’s domestic climate policy . . . . . . . . . . . . . . . . . 20

3.1 Policy instruments . . . . . . . . . . . . . . 203.2 Current cross-sectoral climate

policy instruments in Norway . . . . . 203.3 Effectiveness and cost effectiveness 223.4 National target for 2020 . . . . . . . . . . 243.5 Mitigation options for Norway

and the associated costs . . . . . . . . . 263.6 Discussion of the costs associated

with an ambitious climate policy. . . 27

3.7 The Norwegian Commission on Low Emissions . . . . . . . . . . . . . . . . . 28

3.7.1 About the Low Emission Commission . . . . . . . . . . . . . . . . . . . 28

3.7.2 The Low Emission Commission’s recommendations. . . . . . . . . . . . . . . 30

4 Following up the Government’s climate targets and climate action plans . . . . . . . . . . . . . . . . . . . . . . . . . 32

5 Research and monitoring . . . . . . 335.1 Climate research and the

development of technology . . . . . . . 335.1.1 Strengthening climate-related

research. . . . . . . . . . . . . . . . . . . . . . . 335.1.2 Following up the recommendations

of the climate research committee . 345.1.3 The Research Council’s national

action plan for climate research . . . 365.1.4 Climate research in Norwegian

development cooperation . . . . . . . . 385.2 Climate-related monitoring . . . . . . . 38

6 Sectoral climate action plans . . . 396.1 Sectoral climate action plans. . . . . . 396.2 Petroleum and energy . . . . . . . . . . . 396.3 Transport. . . . . . . . . . . . . . . . . . . . . . 406.4 Manufacturing industries . . . . . . . . 426.5 Primary industries and waste

management . . . . . . . . . . . . . . . . . . . 426.6 Climate-related efforts at

municipal level . . . . . . . . . . . . . . . . . 43

2006– 2007 Summary in English: Report No. 34 to the Storting 5Norwegian climate policy

Summary

The world’s climate is changing as a result ofanthropogenic emissions of greenhouse gases.The global mean temperature has already risen byalmost 0.8 °C since the Industrial Revolution, andsea level has risen by 17 cm. The Intergovernmen-tal Panel on Climate Change (IPCC) forecasts acontinued rise in temperature and sea level, and anincrease in the frequency of extreme weatherevents. Climate change will have very serious con-sequences, and poor people in developing coun-tries will suffer the worst impacts. Famine willbecome more widespread. Children’s growth anddevelopment will be affected by more seriousundernourishment and disease. Mortality fromflooding, heat waves, storms and drought will rise.Up to 30 % of plant and animal species in the worldare in danger of extinction.

The ultimate objective of the UN FrameworkConvention on Climate Change is to stabilisegreenhouse gas concentrations in the atmosphereat a level that will prevent dangerous anthropo-genic interference with the climate system. Lastyear, the Norwegian Government adopted the goalof limiting the average rise in global temperature tono more than 2°C above the pre-industrial level.The IPCC’s Fourth Assessment Report estimatesthat if we are to limit the average rise in tempera-ture to 2.0–2.4 °C, then greenhouse gas emissionsmust be cut by 50–85 % relative to the 2000 level by2050. Global emission reductions on this scale willrequire drastic reductions in greenhouse gas emis-sions in both developed and developing countries.The Government will ensure that Norway makes asubstantial contribution to these reductions.

Greenhouse gas emissions have the same envi-ronmental impact regardless of where releasestake place. However, the developed countries havea special responsibility for acting to reduce emis-sions, both because they are responsible for thelargest proportion of emissions until now, andbecause they are in a better economic position todo so. On this basis, Norway should take on a par-ticular responsibility for contributing to globalemission reductions. The Government thereforeproposes the following targets:– Norway will be carbon neutral by 2050

– Norway will undertake to reduce global green-house gas emissions by the equivalent of 30 %of its own 1990 emissions by 2020

– Norway will strengthen its Kyoto commitmentby 10 percentage points, corresponding to nineper cent below the 1990 level.

The Government is pursuing a three-pronged strat-egy to achieve these targets. The first and mostimportant approach is to work towards a moreambitious international climate agreement. Thesecond is for Norway to contribute to emissionreductions in developing countries and in rapidlygrowing economies such as China and India. Thethird is to intensify efforts to reduce emissions inNorway.

It is not possible at present to obtain reliable fig-ures for the emission reductions that will beachieved through existing and new measures inthe next 10–15 years. Nor do we know which emis-sion reduction measures will be implemented inNorway in the period up to 2020. This will dependamong other things on technological advances andtrends in carbon prices. Moreover, developmentson the Norwegian continental shelf will be particu-larly important for emission levels in Norway in2020. In the 2007 national budget, greenhouse gasemissions in 2020 were estimated at about 59 mil-lion tonnes CO2 equivalents. This estimate is basedon uncertain figures. Experience shows that thefigures in a reference scenario of this kind areoften altered as time goes on. On the basis of themitigation analysis drawn up by the NorwegianPollution Control Authority, sectoral climate actionplans and current policy instruments, the Govern-ment considers that a realistic target is to reduceNorwegian emissions by 13–16 million tonnes CO2equivalents relative to the reference scenario pre-sented in the National Budget for 2007, when CO2uptake by forests is included.

In this case, from about half and up to two-thirds of the cuts in total emissions by 2020 wouldbe made in Norway. The adoption of a new interna-tional climate agreement will make it necessary torevise national targets and instruments. If emis-sion trends indicate that Norway will not achieveits targets, the Government will consider furthermeasures.

6 Summary in English: Report No. 34 to the Storting 2006– 2007Norwegian climate policy

General policy instruments are a central ele-ment of the Government’s domestic climate policy.Cross-sectoral economic instruments form thebasis for decentralised, cost-effective and well-informed measures to ensure that the polluterpays. When Norway has joined the EU emissionstrading scheme, about 70 % of domestic emissionswill either be covered by the emissions tradingscheme or subject to the CO2 tax. Certain sourcesof emissions cannot be incorporated into the emis-sions trading scheme or made subject to the CO2tax. In such cases, the authorities must use otherinstruments to reduce greenhouse gas emissions.The Government’s view is that further regulationshould as a general rule be avoided in areas thatare already regulated by means of general policyinstruments. However, the Government wishes toretain the possibility of using other policy instru-ments in addition to emissions trading and taxes inthese sectors too. For example, the Governmentwill use economic instruments and strengthen thepromotion of new technology to make sure thatnew licences for gas-fired power plants are basedon carbon capture and storage (CCS). Furtherexamples of the use of other instruments are thedoubling of Government support for new renew-able energy developments, proposals for newbuilding regulations and greater promotion of pub-lic transport and the railways.

Developing countries and countries with transi-tion economies will account for three-quarters ofthe growth in CO2 emissions in the coming years.Aggregate greenhouse gas emissions from thesecountries are expected to overtake those fromtoday’s developed countries by 2030. It is thereforeof crucial importance that large-scale emissionreduction measures are carried out in these coun-tries.

Global warming as a result of anthropogenicgreenhouse gas emissions is the greatest environ-mental problem facing the world community today.A global response is needed to deal with this prob-lem. The Government will therefore work towardsan ambitious international climate agreement thatincludes as many countries as possible. A con-certed international effort to reduce greenhousegas emissions will over time raise the price of emis-sions. An anticipated rise in carbon prices will havean immediate influence on investment decisions bythe business sector. It is therefore important toestablish the credibility of broad-based interna-tional efforts to reduce greenhouse gas emissions.Political decisions too must be based on theassumption that carbon prices will rise.

In addition to being more cost-effective, cli-mate-related measures in developing countries canhave a substantial positive development effect,since such projects contribute to sustainable devel-opment in the host country though capital trans-fers.

This English summary of the white paper pre-sents the Government’s climate policy targets andthree-track strategy to achieve these targets, itsplans for research and monitoring programmes,and proposed climate action plans and sectoral tar-gets for the main sectors responsible for green-house gas emissions in Norway. Action plans havebeen drawn up for the following sectors: petroleumand energy, transport, the manufacturing indus-tries, primary industries and waste management,the municipalities, and functions in the state sector.The main purpose of the action plans is to identifymeasures that will result in cost-effective emissionreductions that are not currently being imple-mented in the sector concerned. This is also thestarting point for the targets set out for each sector.The sectoral targets are based on estimates, andwill have to be reviewed in response to anychanges in projections, costs, technologicaladvances and other relevant factors.

For each sector, the currently estimated techni-cal emission reduction potential is presented,together with measures the Government proposesto initiate.

The Ministry of the Environment commis-sioned the Norwegian Pollution Control Authorityto analyse mitigation options for period up to 2020.The analysis mainly considers technical mitigationmeasures. It does not to any great extent includeoptions involving major social change, changes inproduction levels or changes in behaviour. TheGovernment will in particular consider measuresthat will be cost effective with a projected rise incarbon prices over the lifetime of the investments,and that will not necessarily be implemented inresponse to current policy instruments. In this con-nection, priority will be given to measures that pro-mote technological developments. Measures mayalso be considered to encourage the population asa whole to begin a changeover to a low-emissionconsumption pattern sooner than they would as aresult of the projected rise in carbon prices alone.

The Government intends to make five-yearlyreviews of progress and how the use of policyinstruments at national level should be furtherdeveloped. As part of the review process, the Gov-ernment will commission independent expert anal-yses of Norwegian climate policy from institutionsand/or people with wide experience and knowl-


edge of the development and implementation of cli-mate policy. The Government also proposes that anevaluation of climate policy and how policy instru-

ments should be modified should be submitted tothe Storting midway through the first Kyoto period(in 2010).


Ministry of the Environment

Norwegian climate policySummary in English:

Report No. 34 (2006–2007) to the Storting

1 The Government’s climate policy goals

1.1 Principles underlying the climate policy goals

Norwegian climate policy is based on internation-ally recognised and well-established principles andcriteria. Effectiveness and cost-effectiveness aretwo key criteria for policy instruments, and are fur-ther discussed in Chapter 3.3. The polluter-paysprinciple is another important element of climatepolicy. This states that the polluter should bear thecosts of environmental damage. The concept of tol-erance limits and the precautionary principle areclosely linked to the principle of sustainable devel-opment, which underlies all areas of the Govern-ment’s policy, and they can be regarded as meansof putting sustainable development into practice.

To ensure that the tolerance limits of the envi-ronment are respected, targets must be set inaccordance with the carrying capacity of the envi-ronment and its capacity to absorb pollution with-out damage. This approach underlies the ultimateobjective of the Convention on Climate Change,which is to stabilise greenhouse gas concentra-tions in the atmosphere at a level that will preventdangerous anthropogenic interference with the cli-mate system. Thus, the situation of the whole eco-system must be evaluated, and not only that of iso-lated elements. The precautionary principle statesthat where there is a threat of serious or irrevers-ible damage, lack of full scientific certainty shallnot be used as a reason for postponing cost-effec-tive measures to prevent environmental degrada-tion. In other words, «where there is scientificuncertainty, nature should be given the benefit ofthe doubt», as the principle was explained in the

2007 national budget. Climate change is in practiceirreversible. It is already causing serious damage,and the impacts are expected to worsen consider-ably unless steps are taken to cut emissions suffi-ciently. Even though we lack full scientific cer-tainty about causes and future trends, the level ofambition in global climate policy should be basedon likely scenarios, with a particular emphasis onpotentially dramatic outcomes.

Climate policy has substantial distributionaleffects. The impacts of climate change vary greatlybetween countries and population groups, and cli-mate policy should therefore include a strong ele-ment of equitable distribution and internationalsolidarity. The fact that the rich countries of theworld are largely responsible for the rising concen-trations of greenhouse gases in the atmospheremakes this even more important. There is anequally clear need for solidarity and equitable dis-tribution between generations. The scale of green-house gas emissions and the rate at which they arerising constitute one of the clearest breaches of theprinciple of sustainable development today.

The EU has set clear climate policy targets for2020. The Government will work closely with theEU on climate policy issues. Many of the climatepolicy measures that are to be implemented at sec-toral level will come within the scope of the EEAAgreement, and in many cases they will be drawnup through the EU/EEA structures for preparingnew legislation. The Government will thereforeregularly evaluate the opportunities offered bynew proposals for policy and legislative instru-ments within the framework of the EEA.


1.2 The Government’s long-term targets

On this basis, the Government will design Nor-way’s climate policy to achieve the following long-term targets:– Norway will undertake to reduce global green-

house gas emissions by the equivalent of 30 %of its own 1990 emissions by 2020

– Norway will be carbon neutral by 2050.

Moreover, Norway will serve as a driving force inthe efforts to develop a new, more ambitious andcomprehensive international agreement on climatechange after the first Kyoto commitment period,using as a starting point the aim of limiting theaverage rise in global temperature to no more than2°C above the pre-industrial level.

The target of achieving carbon neutrality by2050 means that Norway will take responsibilityfor reducing global greenhouse gas emissions bythe equivalent of 100 % of its own emissions by2050. In this way, emissions from Norwegian terri-tory will be neutralised by emission reductionsNorway pays for in other countries, through emis-sions trading or other mechanisms that becomeavailable. This target says nothing about the levelof Norwegian emissions in 2050, only that they areto be neutralised regardless of the volume of emis-sions. However, current knowledge indicates thatif global emissions are to follow a path consistentwith the long-term objective of stabilising the glo-bal temperature, major changes will be required inemission and consumption patterns in the devel-oped countries, including Norway. In the longterm, Norway must become a low-emission soci-ety.

The Government’s reduction target for 2020includes both emission reductions in Norway,including CO2 uptake by forest, and Norway’s con-tribution to emission reductions in other countries.Possible emission reductions in Norway are dis-cussed in Chapter 3.5. If the Kyoto Protocol’s rulesfor the land use, land-use change, and forestry(LULUCF) sector are maintained, a net CO2uptake by forests of up to about three milliontonnes should be eligible for inclusion in Norway’sgreenhouse gas inventory for 2020. It is not possi-ble at present to obtain reliable figures for theemission reductions that will be achieved throughexisting and new measures in the next 10–15 years.Nor do we know which emission reduction mea-sures will be implemented in Norway in the periodup to 2020. This will depend among other things ontechnological advances and trends in carbon

prices. Moreover, developments on the Norwegiancontinental shelf will be particularly important foremission levels in Norway in 2020.

In the 2007 national budget, greenhouse gasemissions in 2020 were estimated at about 59 mil-lion tonnes CO2 equivalents. This estimated isbased on uncertain figures. Experience shows thatthe figures in a reference scenario of this kind areoften altered as time goes on.

On the basis of the mitigation analysis drawnup by the Norwegian Pollution Control Authority,sectoral climate action plans and current policyinstruments, the Government considers that a real-istic target is to reduce Norwegian emissions by13–16 million tonnes CO2 equivalents relative tothe reference scenario presented in the NationalBudget for 2007, when CO2 uptake by forests isincluded. In this case from about half and up to two-thirds of the cuts in total emissions by 2020 wouldbe made in Norway.

The adoption of a new international climateagreement will presumably make it necessary torevise national targets and instruments. If emis-sion trends indicate that Norway will not achieveits targets, the Government will consider furthermeasures.

The problems associated with climate changeare of such a serious and long-term nature thatbroad political consensus should be sought onNorway’s targets.

When considering emission reductions outsideNorway that are to be funded by the NorwegianGovernment, the Government will concentrate onmeasures and projects that will ensure that climatepolicy has the greatest possible positive effect oneconomic development and poverty reduction indeveloping countries.

1.3 Voluntary strengthening of Kyoto commitments

During the first commitment period under theKyoto Protocol (2008–2012), the Government will– strengthen Norway’s Kyoto commitment by 10

percentage points, corresponding to nine percent below the 1990 level

– ensure that a substantial proportion of Nor-way’s emissions reductions are achievedthrough domestic action.

The gravity of the situation makes rapid cuts inemissions necessary. The Government thereforewishes Norway to undertake to reduce its green-house gas emissions by 10 percentage points more


than its Kyoto commitment. This extra commit-ment will to a large extent be met by funding emis-sion reductions in developing countries. In thisway, substantial reductions can be realised at rela-tively low cost, and Norway will at the same timecontribute to development and poverty reductionin the countries where such measures are carriedout. This initiative also contains an appeal to otherdeveloped countries to voluntarily strengthen theirKyoto commitments. Such initiatives will counter-act the risk that the volume of assigned amountsunder the Kyoto Protocol is greater than countriesneed, so that the Protocol does not in practiceresult in cuts in emissions. Under the Kyoto Proto-col, Norway has an international obligation toensure that its average annual greenhouse gasemissions in the period 2008–2012 are not morethan one per cent higher than in 1990. The Kyoto

Protocol provides for parties to use the Kyotomechanisms as a supplement to national measuresin fulfilling their emission commitments. TheKyoto mechanisms are emissions trading, JointImplementation and the Clean DevelopmentMechanism.

The Government’s target means that Norway’semissions average emissions for the period 2008–2012, when use of the Kyoto mechanisms is takeninto account, are to be nine per cent lower thanthey were in 1990. The Government intends to takea broad-based approach in order to achieve Nor-way’s Kyoto commitment. This will involve a com-bination of national measures and use of the Kyotomechanisms as envisaged by the Protocol, and asubstantial proportion of Norway’s emissionreductions are to be achieved through domesticaction.


2 The Norwegian Government’s international climate change strategy

2.1 Climate change requires an international response

Global warming as a result of anthropogenicgreenhouse gas emissions is the greatest problemfacing the world community today. An interna-tional response is needed to deal with this prob-lem. The Government will therefore work towardsan ambitious international climate agreement thatincludes as many countries as possible. A con-certed international effort to reduce greenhousegas emissions will over time raise the price of emis-sions. An anticipated rise in carbon prices will havean immediate influence on investment decisions bythe business sector. It is therefore important toestablish the credibility of broad-based interna-tional efforts to reduce greenhouse gas emissions.Political decisions too must be based on theassumption that carbon prices will rise.

2.2 New and better international climate agreements are needed

Norway has been playing an active role in effortsto achieve effective international agreements sinceclimate change was first placed on the interna-tional political agenda. The Government intends tocontinue this active role in the years ahead.

Norway views the UN Framework Conventionon Climate Change (UNFCCC) as the key frame-work for international cooperation on climatechange. This is the basis for the Kyoto Protocol,and should also be the basis for any global climateagreement in the future. The Government consid-ers it important to use a long-term target as a basisfor future emission commitments, and has there-fore set the target that the average rise in globaltemperature should be limited to no more than 2°Cabove the pre-industrial level. Achieving this targetwill require a high level of participation in a futureclimate change regime. Current emission commit-ments under the Kyoto Protocol apply to onlyabout 30 % of global greenhouse gas emissions,which is by no means sufficient as a response to

the problem of climate change. In the Govern-ment’s view, it is therefore essential that we suc-ceed in establishing a broader-based, more ambi-tious and binding global climate change regime.The developed countries must take the lead inaccepting responsibility for emissions cuts, but inthe long term all countries that generate large vol-umes of emissions will have to play their part if weare to achieve the necessary global reductions inemissions.

The long-term goal should be to establish a glo-bal price for greenhouse gas emissions, and oneway of achieving this is to develop a more globalemission trading system. An international systemwould also make it possible for other countriesthan Norway to become climate neutral by 2050.The countries that have emission commitmentsunder the Kyoto Protocol have agreed to emissionlimitations totalling about 11 billion tonnes per yearin the period 2008–12. An overall limitation of thevolume of emissions, combined with a duty to sur-render emission allowances, forms the core of anemission trading scheme. The initial distribution ofemission allowances between the countries takingpart in an emission trading scheme does not influ-ence the overall effect of the scheme. It is the totalnumber of allowances that is important. However,the distribution of allowances acts as a powerfulmechanism for income distribution between coun-tries. Allowances should be allocated on the basisof the principle of common but differentiatedresponsibilities. In accordance with the same prin-ciple, the requirement to surrender allowancescorresponding to a country’s own emissionsshould apply to all parties to the scheme.

The Government has decided that Norway willundertake to reduce global greenhouse gas emis-sions by the equivalent of 100 % of its own emis-sions by 2050. If other developed countries followthis example, it will serve to cover part or all of thecosts incurred by countries where per capitaincome is lower if they accept emission commit-ments under a new agreement.

The total allocation of assigned amounts underthe Kyoto Protocol is too generous. An interna-


tional climate change regime should establish acarbon price that is sufficiently high to ensure thatthe climate automatically becomes a factor in day-to-day decisions made by firms, individuals and thepublic sector. If all countries that have commit-ments under the Kyoto Protocol follow Norway’sexample and voluntarily strengthen these commit-ments by 10 percentage points, this will result in arise in the price of allowances during the first com-mitment period.

Status of negotiations under the Climate Change Convention

The UNFCCC lays down the principle that thedeveloped countries should take the lead in effortsto combat climate change and its adverse effects.World production and consumption patterns mustbe changed, and the developed countries have aspecial responsibility for leading the way. However,both per capita and total emissions are expected torise substantially in developing countries. Most ofthe anticipated rise in greenhouse gas emissionswill be in non-OECD countries. In the longer term,important developing countries will also have totake on emission commitments if we are to achievethe long-term goals of the UNFCCC.

Several forward-looking processes are underway within the framework of the UNFCCC and theKyoto Protocol, including negotiations on newemission commitments for developed countriesunder the Protocol for the period after 2012. TheProtocol sets out emission commitments for theperiod 2008–12 for developed country parties. TheUS and Australia have not ratified the Protocol. Inaccordance with the provisions of the Protocol,negotiations on commitments for subsequent peri-ods were started at the first meeting of the partiesin Montreal in December 2005. In the firstinstance, these negotiations only apply to countriesthat have taken on commitments for the firstperiod. However, other countries can also take oncommitments for the second period in the courseof these negotiations. Such commitments becomebinding through ratification, which is required forall changes. So far, there is nothing to suggest thatany new countries are intending to take on commit-ments through these negotiations.

The Conference of the Parties to the Conven-tion in Montreal in December 2005 agreed toengage in a dialogue to exchange experiences andanalyse strategic approaches for long-term cooper-ative action to address climate change. Becausethe dialogue has been established under the Con-

vention, it is open to all parties. It is to involve fourworkshops over a two-year period, and a finalreport will be presented to the Conference of theParties in Bali in December 2007. The decision toestablish the dialogue makes it clear that it will notopen any negotiations leading to new commit-ments. However, it should be possible to use thefinal report on the dialogue as a basis for furtherwork on the development of a new climate changeregime.

The international negotiations on long-termreductions in greenhouse gas emissions have beenstrongly influenced by the unwillingness of the cur-rent US Administration to take part. So far, it hasnot been possible to draw the large developingcountries into the negotiations either. It is particu-larly difficult to persuade these countries to takepart in the negotiations on future emission commit-ments as long as the US is not involved. The mostimportant task today is therefore to convince thenecessary parties to come to the negotiating table.The Government is using a number of channels tocontribute to this, including bilateral contacts andcooperation and multilateral forums. The signalsfrom the G8 + 5 meeting at the Heiligendamm sum-mit in June 2007 were that the US and leadingdeveloping countries are responding positively tothe idea of negotiations on a future climate changeregime under the UNFCCC, which may make iteasier to get the negotiations under way.

In Norway’s view, the Kyoto Protocol providesa good basis for continued cooperation. It will beparticularly important to retain key elements of theProtocol, such as differentiated emission commit-ments, to include all greenhouse gases, and to con-tinue the use of flexibility mechanisms such asemissions trading and project activities. Anotherimportant point is that it should be possible to usethe institutional framework that has already beenestablished as a basis for future international coop-eration. Norway is willing to consider various mod-els that will open the way for more binding partici-pation by developing countries and at the sametime ensure cuts in emissions, while also incorpo-rating the necessary flexibility and positive incen-tives. In the long term, however, we should be aim-ing for a global price for greenhouse gases. Oneway of achieving this is to develop a more globalemission trading system. This means that in thelong term, all countries should take on emissioncommitments. At the same time, the developedcountries should be prepared to assist developingcountries in limiting emissions, developing tech-nology and adapting to climate change.


2.3 We must help to limit the growth in emissions in other countries

The Government has decided that Norway is tomeet its Kyoto commitment by means of a combi-nation of national measures and use of the Kyotomechanisms as envisaged by the Protocol, and thata substantial proportion of Norway’s emissionsreductions are to be achieved through domesticaction.

In the 2007 national budget, the budget of theMinistry of Finance includes an allocation for thepurchase of units through the Kyoto mechanismsJI and CDM.

The Government intends Norway to contributeto emission reductions in other countries by pur-chasing emission reduction units from projectsunder the Clean Development Mechanism (CDM)and Joint Implementation (JI). The rulebook thathas been developed for the Protocol ensures thatprojects implemented in other countries bringimportant benefits in addition to their climate-related effects. Measures to reduce greenhousegas emissions internationally, particularly throughthe Kyoto mechanisms, can result in transfers oftechnology and contribute to sustainable develop-ment. This is particularly true of emission reduc-tions financed through the CDM, since projectactivities are required to assist developing coun-tries in achieving sustainable development. Trans-fers of technology and promotion of sustainabledevelopment are both important in efforts to dealwith the problem of climate change. In these ways,rich countries can help the poorer parts of theworld to avoid the polluting path of developmentthey themselves have followed.

Purchases of project-based units under theKyoto Protocol should promote high environmen-tal standards, and the Norwegian state will there-fore only purchase emission reductions that arecertified by the UN. Under UN rules, only projectsthat would not otherwise have taken place may beapproved. Furthermore, the Government wishesinternational guidelines to be respected whenproject-based units are purchased from hydroelec-tric power production project activities with a gen-erating capacity exceeding 20 MW. The Govern-ment will when purchasing project-based unitsunder the Kyoto Protocol seek to use marketmechanisms to obtain the best possible price for agiven level of risk.

Development funding can also be used toreduce greenhouse gas emissions. The guidelinesfor use of Official Development Assistance (ODA)do not permit direct purchases of emission credits.

However, provided that certain conditions are ful-filled it is possible to invest this type of funding inemission-reduction projects under the CDM (seebox 2.1). In addition to bringing about cost-effec-tive emission reductions, such projects involvetransfers of knowledge, technology and fundingthat can promote sustainable development. Thus,CDM projects have the potential to be good devel-opment tools as well.

The Government will provide developmentassistance funding for CDM project activities. Thepoorest countries have made it clear that they areinterested in attracting such investments, anddevelopment funding may be necessary as to getprojects under way, for example through capacitybuilding. This must be done without divertingODA away from the poorest countries. Projectsthat receive funding must be in accordance withNorway’s development policy as regards the Mil-lennium Development Goals, poverty orientationand recipient responsibility.

Norway will also make a contribution to limit-ing emissions through the development of climate-friendly technology and the transfer of such tech-nology and related expertise to developing coun-tries. This is much in demand by the developingcountries, partly because technology transfers areclosely linked to economic growth. In addition,environmental technology is indispensable inefforts to reduce greenhouse gas emissions andother adverse effects on the environment. Thistype of support is also a crucial means of making itpossible for developing countries to follow a lesspolluting and energy-intensive path of develop-ment than the developed countries have done.Cooperation on the development and transfer of cli-mate-friendly technology is therefore an importantmeans of encouraging developing countries to joina future climate change regime. The Kyoto mecha-nisms are important channels for such transfers.

In the context of climate change, the develop-ment and transfer of technology in the fields ofenergy efficiency and renewable energy sourcesare particularly important. In many of the largedeveloping countries, energy use is to a largeextent based on coal. The world as a whole will con-tinue to be dependent on fossil fuels for manyyears. The International Energy Agency (IEA) hasestimated that world demand for energy will riseby more than 50 % up to 2030, and that more than80 % of the necessary energy production will bebased on fossil fuels. This highlights the need todevelop alternative energy sources for large partsof the world.


Given the projections of future energy demand,the Government expects that carbon capture andstorage will be a key tool in reducing the world’saggregate greenhouse gas emissions. The Govern-ment wishes to use Norwegian expertise in thisfield to contribute to reductions in CO2 emissionsthrough international technology transfers.Approval of carbon capture and storage technolo-gies for use under the CDM will be an importantmeans of encouraging their use in developingcountries.

2.4 We must help developing countries to adapt to climate change

The people of poor countries are more dependenton natural resources and agriculture for their live-lihoods than people in the rest of the world. Thisalso makes these countries more vulnerable to cli-mate change. Their vulnerability is not due to nat-ural conditions alone; it is often intensified by wide-spread poverty, rapid population growth, poor gov-ernance and weak institutions.

Both Norway and the EU aim to limit the aver-age rise in global temperature to no more than 2°Cabove the pre-industrial level. However, even if thistarget is achieved, poor regions of the world will behard hit by climate change. Adaptation is thereforeof key importance for these areas. This includeseverything from economic diversification to knowl-edge and technology development, capacity build-ing and social planning.

Climate change is already hampering eco-nomic development in most developing countries.For example, the droughts in 1997–98 and 1999–2000 cost Kenya more than 40 % of its GDP. Unlessdeveloping countries can substantially reduce theirvulnerability to climate change, they will not beable to achieve positive long-term developmenttrends. It is therefore of crucial importance tomake the national economy in vulnerable countriesindependent of climate change and variability, par-ticularly as regards rainfall. Thus, the key to adap-tation to climate change is development and eco-nomic growth. Adaptation measures must be anintegral part of development cooperation efforts toreduce vulnerability. Measures and strategiesmust be adapted to local conditions – there is noone model that fits all.

The Government has commissioned an analy-sis of the impacts of and vulnerability to climatechange in eastern and southern Africa. This willprovide a good basis for Norwegian action in coop-eration with national authorities. Norway is

already engaged in extensive development cooper-ation in these areas, so that it is possible to make areal difference. Support for adaptation efforts willbe provided both as direct support to individualcountries and via multilateral channels such asUNDP.

The need for development and the need foradaptation to climate change are strongly linked,and this is reflected in the Norwegian action planfor environment in development cooperation, inwhich climate change is one of the thematic prior-ity areas. Adaptation measures and sustainabledevelopment in developing countries will also beessential in order to achieve the necessary globalcuts in emissions. In this context, developmentassistance and technology transfers that willenable people in the poor countries of the world theopportunity to follow a less polluting and energy-intensive path of development than the developedcountries are of crucial importance. Support foradaptation measures in the most vulnerable coun-tries, for example African countries and smallisland states, is also a priority area of Norwegiandevelopment cooperation. In more general terms,such support also improves the capacity of thesecountries to take part in a future regime for reduc-ing emissions after the end of the Kyoto commit-ment period in 2012, and makes it more attractivefor them to do so.

2.5 Cooperation with the UN on carbon neutrality

The UN Secretary-General has announced plans tomake UN agencies carbon neutral. This is part ofthe «Greening the UN» initiative to increase envi-ronmental awareness in the UN and reduce theenvironmental impact of UN operations. UNEP hasbeen appointed to lead this effort. The UN hasapproached Norway, as one of the first countries toset a clear target date for achieving carbon neutral-ity, and has proposed cooperation with the Norwe-gian Government on achieving carbon neutralitywithin the UN system. The UN Secretary-Generalis taking steps to put environment and climatechange high up on the international agenda. Hehas announced a high-level event on climatechange to be held in connection with the UN Gen-eral Assembly in September 2007, and hasappointed three special envoys on climate change,including former Norwegian Prime Minister GroHarlem Brundtland. These initiatives will beimportant in mobilising international support for anew climate change regime. The latest carbon neu-


Box 2.1 The Clean Development Mechanism

The Kyoto Protocol provides for flexibility inhow emission commitments are achievedthrough its three flexibility mechanisms: JointImplementation, emissions trading and theClean Development Mechanism (CDM). Thesemake it possible for countries to acquire emis-sion units through participation in project activi-ties or emissions trading, and use them towardsmeeting their emission targets under the KyotoProtocol. The Kyoto mechanisms make it possi-ble to achieve cost-effective reductions of globalgreenhouse gas emissions. Each unit that istransferred using these mechanisms representsone tonne of emissions expressed in CO2 equi-valents. According to the Protocol, use of theKyoto mechanisms is intended to be a supple-ment to domestic action to reduce emissions.

The CDM can make a substantial contribu-tion towards a more sustainable and less car-bon-intensive path of development. It has twopurposes:1. to assist developing countries in achieving

sustainable development2. to assist developed countries in achieving com-

pliance with their emission limitation andreduction commitments in a cost-effective way.

The transfers of funding and technology thattake place when project activities are implemen-ted are intended to play a part in limiting emis-sions and helping host countries to achievesustainable development. In addition, developedcountries are assisted to achieve compliancewith their commitments in a cost-effective way.Reductions in emissions resulting from a projectmust be additional to any that would occur inthe absence of the CDM-related part of the pro-ject (the additionality requirement).

A strict rulebook has been developed for theCDM to ensure that the number of certifiedemission reductions (CERs) issued does notexceed the emission reductions that have takenplace. Third-party verification of emissionreductions is required.

The implementation of projects is monitoredsystematically through collection and archivingof relevant data. The data collected are used toverify the emission reductions achieved by aproject. CDM projects must be approved by theCDM Executive Board before CERs can beissued.

The additionality requirement is a key crite-rion for projects under the CDM. This meansthat developers must substantiate how their pro-jects will result in reductions in greenhouse gasemissions that are additional to those that wouldoccur in the absence of the projects.

There is considerable uncertainty as regardsprojected emission trends in the absence ofCDM projects. This problem is addressed bylimiting the crediting period for each project, sothat CERs are only issued either for a fixedperiod of ten years or for a maximum of threetimes seven years, with a new assessment at theend of each seven-year period.

The owner of the CERs generated by a CDMproject is normally specified in the contract bet-ween the investor and the project host. There isa wide degree of freedom in the wording of suchcontracts. It is most usual for the CERs genera-ted by a project to be owned by the investor.However, they may also be owned by the projecthost, who can then sell them in the emissionstrading market. Similarly, it is possible to enterinto contracts to purchase CERs from a CDMproject without investing directly in the project.

After a slow start, the CDM market is nowgrowing rapidly. So far, Asia and Latin Americahave attracted the bulk of CDM investments,and only a few projects are under way in Africa.Factors that tend to discourage foreign invest-ment in developing countries generally, such aspoor governance, also have an effect in the con-text of the CDM. In addition, there is a limit tothe cuts in emissions that can be achieved insmall, poor countries. A CDM capacity buildinginitiative for the poorest countries has beenestablished by the UN Development Pro-gramme (UNDP) and the UN Environment Pro-gramme (UNEP) (the Nairobi Framework). Theaim is to give these countries a better basis forattracting CDM investments.

In 2004, the OECD Development AssistanceCommittee (DAC) decided that ODA fundingmay be invested in CDM project activities provi-ded that the value of the CERs generated by aproject is deducted from reported ODA as theCERs are issued, which is similar to the systemused for concessional loans. Alternatively, thecontract can lay down that the CERs generatedbecome the property of the project host. In thiscase, they can be sold on the emissions tradingmarket. Funds used to purchase CERs directlymay not be reported as ODA. It is also a condi-tion that any use of ODA funding for CDM pro-jects must not divert ODA away from thepoorest countries. In other words, ODA fundsmay be used to establish CDM projects that willpromote development, provided that the fun-ding is not used for direct purchases of emissioncredits in order to meet the donor country’snational emission commitments.


Box 2.2 Greenhouse gas emissions in China, India and Indonesia

China

According to the International Energy Agency(IEA), China will overtake the US as the world’sbiggest emitter of CO2 before 2010 (about 6 giga-tonnes CO2 equivalents in 2009). If no policychanges are made, China’s emissions are pro-jected to rise to about 10 gigatonnes in 2030, ascompared with about 7 gigatonnes for the US.The most important explanation for China’s highCO2 emissions is its use of coal as an energysource. China currently meets about two-thirdsof its energy needs from domestic coal produc-tion. The country has large coal reserves, andcoal will therefore continue to be the dominantenergy carrier for the foreseeable future. In addi-tion, oil and gas consumption is rising rapidly,and energy efficiency is low. However, it shouldbe noted that per capita levels of CO2 emissionsand energy use in China are low. The US Depart-ment of Energy has calculated that China’s percapita emissions of CO2 from consumption andflaring of fossil fuels were 3.62 tonnes in 2004.The equivalent figures for the US and Norwaywere 20.18 tonnes and 11.18 tonnes respectively,and the average for the world as a whole was 4.24tonnes.

China is a party to the UNFCCC and theKyoto Protocol, but as a developing countryparty has no quantified emission commitmentunder the Protocol.

Norway began environmental cooperationwith China based on ODA funding in 1995. Forthe first few years, the emphasis was on know-ledge building, but projects are now focusing oncapacity building to address and resolve envi-ronmental problems. Because China has a keyrole to play in dealing with global climatechange, the Government intends to expand coo-peration relating to climate, environment andenergy. China is the country that has made mostuse of the CDM.

India

India is a party to the UNFCCC and the KyotoProtocol, but is not required to submit regulargreenhouse gas emission inventories. Accordingto estimates from sources including the WorldResources Institute, India is the fourth largestemitter in the world, after the US, China and Rus-sia. According to figures from the US Carbon

Dioxide Information Analysis Center, India’semissions have risen by about 88 % since 1990.The country’s emissions are expected to doubleby 2030 compared with the 1990 level, and willthen be equivalent to about 9 % of total globalemissions. However, per capita greenhouse gasemissions are low, at about 1.3 tonnes, and pro-jections indicate that they will still be considera-bly lower than in the developed countries in2030. Coal-fired power plants are India’s mostimportant energy source, and account for a largeproportion of the country’s emissions. India isbelieved to have the world’s third largest reser-ves of fossil fuels. Annual economic growth isrunning at about 8 %, and energy demand is the-refore high. In order to reduce its emissions,India will have to address the question of how itsgrowing energy demand can be met with lessimpact on the climate.

India plays an important role in the internati-onal CDM market. Most of the projects appro-ved by the Indian authorities concern energyefficiency, biomass and renewable energy sour-ces. India is the country that has registered thelargest number of projects with the CDM Exe-cutive Board, but most of them are on a fairlysmall scale.

Cooperation between Norway and India onclimate issues involving ODA funding is cur-rently limited in scope, and includes small-scale research projects on climate-relatedchanges in agriculture and measurements ofair pollution. The Government has recentlytaken the initiative for a broader strategic part-nership between Norway and India on climatechange issues. In addition to CDM project acti-vities, possible areas of cooperation includeresearch on ice-melt in the Himalayas, renewa-ble energy, carbon capture and storage, and apolicy dialogue.

Indonesia

Indonesia ranks 16th among the world’s largestemitters of CO2, but fourth when emissions fromdeforestation and land-use change are included.Per capita emissions of greenhouse gases areabout 4.7 tonnes. At present, 60 % of Indonesia isstill forested, but the deforestation rate is one ofthe highest in the world, and deforestation is thelargest source of CO2 emissions, followed by rap-idly rising emissions from the energy sector.


trality initiative is another signal that the Secretary-General intends to lead the way and ensure that theUN is a key player in efforts to combat climatechange. Norway has responded positively to theinvitation to cooperate with the UN on this initia-tive. The details of the cooperation will be workedout shortly. The main purpose of the cooperationwill be to support the UN’s efforts to take the leadin this field, and to ensure that Norway, togetherwith other countries and actors, makes progress inthe quality assurance of efforts to reduce carbonintensity.

2.6 Climate issues and trade

The UN system, particularly the Intergovernmen-tal Panel on Climate Change (IPCC), is and shouldbe the main forum for efforts to ensure the broad-est possible international support for reductions ingreenhouse gas emissions. At the same time, weneed to consider how other arenas, particularly themultilateral trade regime under the World TradeOrganization (WTO), can be used to support thework being done in the main forum. It is importantto ensure that the multilateral trade regime andefforts to deal with climate change are mutuallyreinforcing.

Box 2.2 Continues

Industrial emissions only account for a small pro-portion of the total. Illegal logging is the mainreason why deforestation is not under control: itis estimated that 70–80 % of all Indonesian timberis felled illegally. Deforestation is also beingdriven by expansion of plantation operations andagriculture. Indonesia is giving high priority toexpansion of its plantation sector, and the grow-ing global demand for biofuels is putting furtherpressure on the remaining tropical rain forests.The provincial authorities in Kalimantan andPapua have already set aside large areas for suchdevelopments. Forest fires that are started delib-erately are a serious problem at both nationaland regional level. Most fires are started to clearforest for agriculture, particularly for the produc-tion of palm oil.

The Indonesian authorities themselves haveset the target of halving forest fires, whichwould result in a substantial reduction of thecountry’s CO2 emissions. In the negotiating pro-cess under the UNFCCC, a proposal has beenput forward to provide compensation (carboncredits) for countries that prevent deforestation.If this is adopted and implemented, it couldresult in a reduction in the deforestation ratethat would give considerable cuts in Indonesia’sgreenhouse gas emissions.

Norway is interested in closer cooperationwith Indonesia on environmental and climateissues, and in strategic cooperation in internati-onal environmental forums where Indonesiaplays an important role. Norway and Indonesiahave recently signed a Joint Declaration on cli-mate change and energy issues. This provides

for cooperation in various fields including CDMproject activities, the development of renewableenergy, political cooperation in climate changenegotiations, research cooperation, reforesta-tion projects and carbon capture and storage.

Norway is starting a new environmental coo-peration programme in Indonesia in 2007. Itspurpose is to reduce the extent of illegal loggingand trade in tropical timber and to build up localforest management capacity. The programmeaddresses the problem of poor governance,which is an important underlying cause of defo-restation.

In addition to making use of the flexibilitymechanisms, the Government is participatingactively in efforts to reduce emissions from themajor developing country emitters, particularlyChina, India, Indonesia, South Africa and Brazil.Cooperation agreements have already been sig-ned with some of these countries, focusingmainly on emission reductions. Norwegian busi-ness and industry can help to achieve cuts inemissions by providing expertise and techno-logy. In future allocations of development fun-ding, greater weight will therefore be given tocooperation on renewable energy sources andenergy efficiency, transfers of technology forcarbon capture and storage, private- and public-sector Norwegian investments in CDM projects,and research cooperation. Norway is also inte-rested in closer political cooperation with thesecountries in climate negotiations. One possiblemeasure in this context is support for the trans-fer of expertise to negotiators and experts fromthe countries in question.


One of the areas in which negotiations are cur-rently being conducted in the WTO is trade in envi-ronmental goods and services. Norway is seekingto promote such trade through the negotiations.However, as new climate-related measures areintroduced, it will be necessary to improve knowl-edge of the links between such measures and themultilateral trade regime.

This means that it will be important to identifyand make use of opportunities under the multilat-eral trade regime to promote and support climate-friendly measures and practices. On the otherhand, it will be important to identify any factorsthat may result in distortion of competitionbetween producers of the same goods and servicesin different countries, and that may unintentionallyhamper trade in environmental goods and ser-vices. It is important to reach international agree-ment at an early stage on how to deal with suchtrade-related problems.

The first step should be to initiate an analysis ofthe links between climate-related measures andthe trade regime. The OECD is the most suitableinternational arena for this. Norway will thereforesuggest that the OECD, in cooperation with theWTO and other organisations as appropriate,should carry out an analysis of trade issues thatarise in connection with the implementation of cli-mate-related commitments. In the longer term, thegoal should be to develop a basis for agreement onguidelines that are non-protectionist and willencourage trade in environmental goods and ser-vices and facilitate the transfer of climate-friendlytechnology to developing countries. Work on adap-tation to climate change is also in progress in theOECD/DAC Network on Environment and Devel-opment Co-operation (ENVIRONET), where Nor-way is a member.

Box 2.3 Climate change in Africa

Africa is the continent that is contributingleast to climate change, but will be hardest hitby its impacts. For example, various modelsindicate that if the temperature rises by 2 °C:– Africa will suffer total losses of USD 133

billion, which corresponds to 4.7 % of GDP.Most of this will be in the agricultural sec-tor

– 12 million people will risk starvation as aresult of lower crop yields

– 20 million more people will be affected byflooding

If the temperature rises by 2.5–5 °C, themodels indicate that:– 128 million people will risk starvation– 108 million more people will be affected

by flooding– The sea level may rise by 15–95 cm, caus-

ing flooding and mass migration. Banjul,the capital of Gambia, would for examplebe submerged

Adaptation to climate change is thus of crucialimportance in Africa.


3 The Government’s domestic climate policy

3.1 Policy instruments

General policy instruments are a central elementof the Government’s domestic climate policy.Cross-sectoral economic instruments form thebasis for decentralised, cost-effective and well-informed measures to ensure that the polluterpays. When Norway has joined the EU emissionstrading scheme, about 70 % of domestic emissionswill either be covered by the emissions tradingscheme or subject to the CO2 tax. Certain sourcesof emissions cannot be incorporated into the emis-sions trading scheme or made subject to the CO2tax. In such cases, the authorities must use otherinstruments to reduce greenhouse gas emissions.

The Government’s view is that further regula-tion should as a general rule be avoided in areasthat are already regulated by means of general pol-icy instruments.

However, the Government wishes to retain thepossibility of using other policy instruments inaddition to emissions trading and taxes in thesesectors too. For example, the Government will useeconomic instruments and strengthen the promo-tion of new technology to make sure that newlicences for gas-fired power plants are based oncarbon capture and storage (CCS). Further exam-ples of the use of other instruments are the dou-bling of Government support for new renewableenergy developments, proposals for new buildingregulations and greater promotion of public trans-port and the railways.

The Government will review the tax systemwith a view to making changes that will promoteenvironmentally friendly behaviour. This must bedone within a revenue-neutral framework. TheGovernment will maintain the overall tax levelfrom 2004, and raised environmental and climate-related taxes will be offset by reductions in othertaxes.

3.2 Current cross-sectoral climate policy instruments in Norway

The Government considers it important to con-tinue the use of policy instruments that will ensure

the implementation of cost-effective measuresacross sectors. The Norwegian emissions tradingscheme and taxes on emissions are cross-sectoralinstruments that have been introduced specificallyto reduce greenhouse gas emissions. The Pollu-tion Control Act is also cross-sectoral, and in prin-ciple applies to greenhouse gas emissions, as dis-cussed later. Both taxes and emissions trading puta price on activities and products that generategreenhouse gas emissions. Such instruments pro-vide an incentive for producers and consumers toreduce their emissions, and encourage the devel-opment of environmentally sound technology.There are currently three Norwegian taxes thatare explicitly linked to greenhouse gas emissions:the CO2 tax, the tax on imports of chemicals con-taining hydrofluorocarbons (HFCs) and perfluoro-carbons (PFCs), and the tax on final waste dis-posal. See chapter 6 for a presentation of climate-relevant policy instruments that target specific sec-tors.

Emissions trading scheme

The emissions trading scheme is one of the mostimportant policy instruments for ensuring thatNorway meets its Kyoto commitment. Norway hashad an emissions trading scheme in place since2005. On 25 May this year, the Government pre-sented a proposal for the emissions tradingscheme in the period 2008–2012 (Proposition tothe Odelsting No. 66 (2006–2007) on amendmentsto the Greenhouse Gas Emission Trading Act).

The Government has decided that, on certainconditions, the Emissions Trading Directive is tobe incorporated into the EEA Agreement, andtherefore presumes that Norway will be integratedinto the EU emissions trading scheme in period2008–2012. Norway’s domestic scheme is organ-ised in accordance with the Emissions TradingDirective.

In the period 2008–2012, the emissions tradingscheme will apply to more than three times the vol-ume of emissions it covers in the period 2005–2007,and will cover more than 40 % of domestic emis-sions. This is because the oil and gas industry andthose installations over 20 MW that currently pay


the CO2 tax (pulp and paper, combustion installa-tions, etc.) will be included in the system. Thedomestic emissions trading scheme already coverscombustion installations over 20 MW (such as gas-fired power plants), refineries and the mineralindustry (including production of cement andlime). Over time, the Government would like to seean emissions trading scheme with the widest pos-sible scope, including as many sectors and coun-tries as possible. The Government is therefore con-sidering the inclusion of installations for which par-ticipation in the emissions trading scheme is notmandatory in the EU.

The Government considers it important thatpolluters are made responsible for the real costs ofthe pollution they generate. The polluter-pays prin-ciple is therefore also of crucial importance in thedevelopment of the Norwegian emissions tradingscheme. The Government has decided that most ofthe emission allowances Norwegian installationsneed must be bought on the open market.

The Government does not intend to issue anyallowances free of charge to the offshore sector.For land-based industries, allowances will be allo-cated free of charge on the basis of average emis-sions in the base years 1998–2001. The overallnumber of allowances allocated free of charge is tocorrespond to 92 % of average emissions in thebase years. Installations will receive allocationscorresponding to 100 % of their process emissionsand 87 % of their emissions from energy use. In all,allowances allocated free of charge are expected tocorrespond to 25 % of the quantity needed for allinstallations covered by the emissions tradingscheme. In addition, a reserve will be set aside fornew gas-fired power plants that are based on CCStechnology-ready and for licensed high-efficiencycombined heat and power plants. The size of thereserve has not yet been determined, but it isassumed that the overall volume of allowances allo-cated free of charge will probably be of the order of30 % of the volume needed by all the installations inthe system, which is considerably less than in anyother country in the EU emissions trading scheme.According to plan, installations included in thescheme will also, subject to further rules, be ableto acquire emission units issued under the project-based Kyoto mechanisms, Joint Implementationand the Clean Development Mechanism, to com-ply with the requirements.

Taxes

The CO2 tax is Norway’s main policy instrumentfor reducing greenhouse gas emissions from sec-

tors and activities that are not included in the emis-sions trading scheme. About 52 % of Norway’sgreenhouse gas emissions and about 68 % of itsaggregate CO2 emissions are subject to the CO2tax. Use of mineral oil and petrol and emissionsfrom the petroleum industry are currently subjectto the CO2 tax, but the tax rates vary. Table 3.1shows the rates applicable in 2007. These varyfrom NOK 89 to NOK 342 when converted to ratesper tonne CO2. The process industry is in practiceexempt from the CO2 tax because coal, coke anduse of gas in Norway are generally not taxed.Greenhouse gas emissions from the agriculturalsector are not regulated by means of climate policyinstruments.

The tax on imports of chemicals containinghydrofluorocarbons (HFCs) and perfluorocarbons(PFCs) is another instrument for pricing green-house gas emissions. The tax on these gases wasintroduced in 2003. The 2007 tax rate correspondsto about NOK 194 per tonne CO2 equivalent, aboutthe same as the CO2 tax on mineral oils. Emissionsof HFCs and PFCs are generated mainly fromrefrigerating equipment, fire fighting foam and theproduction of insulating materials. The tax appliesboth to HFCs and PFCs produced in Norway andto imported products. The Ministry of the Environ-ment has established a refund scheme for HFCsand PFCs that are delivered for destruction. Therefund corresponds to the tax rate for these sub-stances.

Source: Statistics Norway and Ministry of Finance

Table 3.1 CO2 tax rates for 2007

NOK perl/Sm3/kg

NOK pertonne CO2

Petrol 0.80 345Mineral oils 0.54– light fuel oil, diesel 203– heavy fuel oils 172Mineral oils, lower rate 0.28– light fuel oil, diesel 105– heavy fuel oils 89Use of gas in Norway– natural gas 0.47 201– LPG 0.60 200Continental shelf 0.80– light fuel oil, diesel 300– heavy fuel oils 255– natural gas 342


The tax on final waste disposal also has a CO2 com-ponent, which helps to reduce greenhouse gasemissions from landfills and waste incinerationplants.

The emissions trading scheme and the varioustaxes mentioned here apply to just over 70 % ofNorway’s greenhouse gas emissions.

Pollution Control Act

Section 7 of the Pollution Control Act sets out ageneral duty to avoid pollution, which in principleapplies to greenhouse gas emissions. The Norwe-gian Pollution Control Authority is responsible foradministration of the Act. Current practice is thatwhen a firm applies to engage in activities that canbe expected to generate significant CO2 emissions,these emissions are regulated in the firm’s dis-charge permit. The limits set out in discharge per-mits correspond to projected emissions from theinstallation, and therefore do not entail realrequirements to reduce emissions. This is partlybecause greenhouse gas emissions are to a largeextent regulated by other instruments such as theCO2 tax, the emissions trading scheme and agree-ments with specific industries. However, the Gov-ernment would like to emphasise that the PollutionControl Act applies to greenhouse gas emissions,and that it is therefore an important climate policyinstrument as well. This is laid down both by thePollution Control Act and by the Greenhouse GasEmission Trading Act.

An installation that generates CO2 emissionsthat are subject to the Greenhouse Gas EmissionTrading Act must also hold a discharge permit pur-suant to the Pollution Control Act for these emis-sions. Such discharge permits may includerequirements relating to energy efficiency and theuse of specific technology. Requirements pursuantto the Pollution Control Act are also used to reducemethane emissions from landfills.

Climate awareness campaign

The Government also considers it important tocreate understanding of the need to reduce green-house gas emissions and inspire people to play apart in these efforts. The Ministry of the Environ-ment, in cooperation with a wide range of otheractors, has therefore started a major climateawareness campaign («Klimaløftet») that targetsindividuals, firms and local and central govern-ment. An important element of the campaign is toprovide information on opportunities for change. Itis based on factual information and cooperation

with research institutions. Various initiatives havebeen taken as part of the campaign, including theestablishment of a web portal, a nationwide seriesof lectures, and arrangements tailored to businessand industry..

3.3 Effectiveness and cost effectiveness

Effectiveness and cost effectiveness are two keycriteria in environmental policy development, as inother policy areas.

The polluter-pays principle is an important ele-ment of environmental policy. It lays down that thepolluter should bear the costs of environmentaldamage.

The effectiveness of policy instruments is mea-sured by how reliably they lead to the achievementof policy targets. This is particularly important inrelation to international commitments. In this case,the effectiveness of policy instruments to reducegreenhouse gas emissions is linked to whetherNorway succeeds in complying with its Kyoto com-mitment by means of a combination of nationalmeasures and use of the Kyoto mechanisms. Effec-tive policy instruments are also needed to ensurethe implementation of new technology that has notyet been commercialised.

Cost effective policy instruments result in theimplementation of measures that give the greatestpossible emission reductions relative to theresources used. If policy instruments are not costeffective, society must accept an unnecessary lossof welfare in other areas in order to achieve envi-ronmental goals.

Climate policy instruments can be made costeffective by giving decision-makers in all sectors ofsociety the same incentive to reduce greenhousegas emissions. A cross-sectoral environmental taxis in principle a cost-effective policy instrument.The authorities often lack information on whichmeasures are most effective. A cross-sectoral taxleaves the choice of measures to the actors them-selves. The effectiveness of a tax depends onwhether the tax rate is high enough and the tax suf-ficiently precisely targeted to trigger the necessaryadaptations by firms and households. Taxes aredetermined annually, giving the authorities theopportunity to correct discrepancies betweenactual and projected emissions.

In a system with tradable emission allowances,a carbon price is formed that gives actors withinthe system the same incentive to reduce emis-sions. The emissions trading scheme can therefore


in principle also be designed as a cost-effective pol-icy instrument. However, for the scheme to becost-effective, it must be designed in such a waythat actors are given effective incentives to cuttheir emissions. The effectiveness of the schemecan be ensured by capping the total volume ofemission allowances at a level that will allow theenvironmental target to be met. The price of allow-ances is determined by supply and demand. If anemissions trading scheme is not purely national, asin the case of the Norwegian scheme linked to the

EU scheme, its effectiveness with reference purelyto emissions from installations in Norway that arecovered by the scheme cannot be measured.

International emissions trading can be instru-mental in forming a common international price forgreenhouse gas emissions and ensuring cost effec-tiveness across national borders. Since reducinggreenhouse gas emissions has the same effectregardless of where in the world cuts are made,global cost effectiveness should be given high pri-ority in climate policy.

1 Based on a report from operating companies on the Norwegian continental shelf and the Norwegian Pollution Control Authority.2 CO2 tax offshore will be changed from 2008 when the petroleum sector is included in the emissions trading scheme.3 Based on an equilibrium analysis for 1990–1999. Bruvoll A. and B.M. Larsen (2004) Greenhouse gas emissions in Nor-

way. Do carbon taxes work? Energy Policies 32 (4), 493–505, and an assessment carried out for Norway’s Third National Communication under the UNFCCC.

4 The lower figures reflect direct effects of the agreement, while the higher figures include measures carried out before the agree-ment was concluded in 1997.

5 Partial closure of a factory in 2001 resulted in emission reductions that are not included in the calculations.6 From 2008, the emissions trading scheme will result in further reductions.

Table 3.2 Effects of Norwegian policy instruments implemented after 1990 (million tonnes CO2 equivalents)

1995 2000 2003 2005 2010

Climate-specific policy instrumentsCO2 tax offshore1 0.6 3.0 3.0 3.0 3.73

CO2 tax onshore2 0.8 0.8 0.8 0.83

Requirement to collect landfill gas 0.25 0.4 0.45 0.5 0.6Other instruments in the waste sector 0.07 0.2 0.25 0.4HFCs – tax and recovery 0.2 0.3 0.5Agreement with aluminium industry4 0–1.6 0.6–3.0 1.2–4.0 1.4–4.0 1.4–4.1Agreement on reduction of SF6 emissions 0.05 0.06 0.06

Other policy instrumentsRegulation of VOC emissions offshore 0.17 0.2 0.25Regulation of VOC emissions at the Sture terminal

0.01 0.17 0.02 0.005

Voluntary reductions Reduction of SF6 emissions from magne-sium production

1.0 1.4 0.55 0.5 0.5

Reduction of N2O emissions from nitric acid production

0.4 0.3 0.3 0.3 0.3

Use of biocarbon in cement production 0.02 0.03 0.1 0.1Total effect of instruments included in reference scenario

2.3–3.9 6.6–9.0 7.1–9.9 7.4–10.0 8.5–11.1

New policy instruments after 2004Emissions trading 2005–2007 0–0.5 0–0.56

Arrangement with process industries 0.6Instruments in waste sector 0.15Total emission reductions 2.3–3.9 6.6–9.0 7.1–9.9 7.4–10.5 9.3–12.4


It is easier to gain broad political acceptance forcost-effective measures, and cost-effective imple-mentation can make it easier to reach agreementon more ambitious international targets. The UNFramework Convention on Climate Change(UNFCCC) emphasises that policies and measuresto deal with climate change should be cost-effec-tive so as to ensure global benefits at the lowestpossible cost.

Dealing with the challenges of climate changerequires a very long-term perspective. Policyinstruments must be assessed in the same per-spective. The developed countries’ greenhouse gasemissions must be substantially reduced by themiddle of the present century. The costs of suchreductions will probably be far higher than the cur-rent carbon price, but long-term decisions do notnecessarily take sufficient account of the long-termclimate policy framework. The problem is partlythat it is uncertain what the framework will be, andpartly that decision makers do not currently havestrong enough incentives to take future circum-stances into account. It is therefore important forthe authorities to ensure that their climate policytargets enjoy credibility, and to provide informa-tion on probable trends in carbon prices and cli-mate-related taxes. This will enable private actorsto use the best possible price estimates, for exam-ple in making decisions on investments.

The development of climate-friendly technol-ogy involves special challenges. The results ofresearch and development are to a large extent apublic good that everyone should be able to usefreely. However, due to the difference betweenmicro- and macroeconomic assessments of profit-ability, the level of private-sector research anddevelopment will normally be too low. Uncertaintyabout future carbon prices may amplify this marketfailure. This implies that the state should subsidisethe development and testing of new technologies,and perhaps the early stages of their commerciali-sation, in order to reduce this uncertainty andachieve positive external effects in the form of thespread of climate-friendly technology. This is whythe Government has decided to contribute fundingtowards the development of carbon capture andstorage technology. Projects in this field are notprofitable at present given current cost levels, butmay be in the future. In this case, Norwegianexpertise and technology may become an impor-tant export article, and by helping to make thistechnology available at an earlier stage, we can alsomake an important contribution to reductions ofCO2 emissions throughout the world.

Many market decisions and decisions by thepublic sector have only short-term consequences.Others create structures that remain in place formany years. It is important, for example, to ensurethat buildings, urban structure and the transportsystem are properly adapted to long-term energy-and climate-related requirements. Decisions thatwill have long-term effects must take climatechange into account to a greater degree than issuggested by current carbon prices. The projectedrise in climate-related costs must be included aspart of the basis for decisions on such investments,and for analyses and decisions on the tax systemand on state aid to industries that will affect landuse and infrastructure.

The price signals provided by taxes and carbonprices will not necessarily have the same effect inall sectors or on all actors, and they may thereforeneed to be supplemented with other policy instru-ments. One example is the Planning and BuildingAct and regulations under the Act. Even if theauthorities provide satisfactory information, it maybe unreasonable to expect individuals to take fullaccount of probable changes in climate policy andthe rise in energy prices this will involve. Thismeans that regulating energy use in buildings canbe an economically sound measure. Another exam-ple is the CO2 component of the purchase tax oncars, which provides an extra incentive to make anenvironmentally sound choice by giving informa-tion on differences in emission levels and the CO2tax levels at the time of purchase.

A framework that ensures sufficiently high car-bon prices and taxes is the mainstay of climate pol-icy. The sectors mainly responsible for greenhousegas emissions have identified measures that willresult in cost-effective emissions reductions thatare not currently being implemented in these sec-tors. Some of the measures will be implementeddirectly through decisions by the authorities. Fur-ther analyses and experience will be needed toassess which measures will be carried out inresponse to taxes or the emissions trading scheme,and where other policy instruments will beneeded.

Table 3.2 shows the range of policy instru-ments that has been used to bring about emissionreductions in Norway so far.

3.4 National target for 2020

The Government will implement measures toreduce emissions substantially both in Norway


and in other countries. In the Government’s view,both these approaches are valuable.

At present, emissions are roughly equally splitbetween developed and developing countries.Emission reductions in Norway and other devel-oped countries will be of crucial importance inachieving global cuts in greenhouse gas emissionsthat are sufficient to avoid dangerous interferencewith the climate system. To ensure that the neces-sary restructuring process in Norway is notdelayed or obstructed, we will continue our focuson substantial domestic measures. Norway startedto carry out climate-related measures at an earlystage, and these have already yielded substantialreductions. One example is the reduction of emis-sions from the petroleum industry on the Norwe-gian continental shelf. Continuing and intensifyingthis restructuring process will be the most eco-nomically profitable option in the long term. More-over, a number of scientific reports, including theStern Review, have shown the costs of not takingearly action to avoid climate change will probablybe several times higher than those of taking action,partly because society will then have to deal withgreater climate change.

International leadership is important toadvance negotiations within the framework of theUNFCCC and the Kyoto Protocol. The negotia-tions have been at a standstill for several years, andthere has been a constant risk that they will breakdown. One prerequisite for progress in the negoti-ations is for more developed countries to show will-ingness to take action at home. If Norway is to suc-ceed in playing a leading role in the internationalnegotiations, we too must take action to cut emis-sions substantially within the country. Measurescarried out in other countries can bring about largecost-effective cuts in emissions, and provide addi-tional gains in the form of the transfer of economicresources. If developing countries and countrieswith transition economies are to be willing to par-ticipate in an ambitious climate agreement in thefuture, the rich countries must assume a consider-able share of the financial burden of emissionreductions in poor countries. Measures carried outin poor countries will both provide climate-relatedbenefits and reduce local pollution. They will thusprovide economic benefits for these countries.Efforts to reduce greenhouse gas emissions areclosely linked to poverty reduction efforts.

According to the Fourth Assessment Reportfrom the Intergovernmental Panel on ClimateChange (IPCC), greenhouse gas emissions mustbe cut by 50–85 % globally to avoid dangerous inter-ference with the climate system and limit the aver-

age rise in temperature to 2.0–2.4 °C. The Govern-ment has adopted the goal of limiting the averagerise in global temperature to no more than 2°Cabove the pre-industrial level. A strategy developedfor the period up to 2020 must therefore take intoaccount the need to be able to make even moreambitious cuts in emissions in the period 2020–2050.

In the long term, Norway must become a low-emission society. Given a more concerted interna-tional effort to reduce greenhouse gas emissionsand the projected rise in carbon prices, it willbecome economically profitable to carry out arange of measures at national level. The Govern-ment will in particular consider measures that willbe cost effective with a projected rise in carbonprices over the lifetime of the investment, and thatwill not necessarily be implemented in response tocurrent policy instruments. In this connection, pri-ority will be given to measures that promote tech-nological developments. Measures may also beconsidered to encourage the population as a wholeto begin a changeover to a low-emission consump-tion pattern sooner than they would as a result ofthe projected rise in carbon prices alone.

It is only possible to provide an estimate of theproportion of Norway’s emission reduction com-mitments that will be achieved through domesticreductions and the proportion that will be achievedin other countries through the Kyoto mechanisms,including emissions trading and the Clean Devel-opment Mechanism. This is partly because Nor-way is to join the EU emissions trading schemefrom 1 January 2008. The emissions tradingscheme will then apply to at least 40 % of Norwe-gian emissions. Firms that are included in theemissions trading scheme are required to reduceemissions, but are free to decide whether to do thisby cutting their own emissions or by funding emis-sion reductions in other firms by purchasing emis-sion allowances. Thus, in an emissions tradingscheme, the authorities determine the overall levelof emissions, but not where cuts are to be made.There is also considerable uncertainty as regardsprojections of trends in the Norwegian economy,technological developments and the costs of carry-ing out measures in other countries. This makes itdifficult to determine exactly how much emissionswill be reduced in Norway.

Since 1990, greenhouse gas emissions in Nor-way have risen by almost 9 %. According to prelim-inary figures from Statistics Norway and the Nor-wegian Pollution Control Authority, emissionstotalled 53.7 million tonnes CO2 equivalents in2006. In the 2007 national budget, greenhouse gas


emissions in both 2010 and 2020 were estimated atjust under 59 million tonnes CO2 equivalents.These figures have been adjusted in accordancewith the most recent methodological changes inthe emission inventory, which also have implica-tions for projections of emissions. The trend inemissions must be seen in the context of theexpected reduction in emissions from the petro-leum industry in the period up to 2020.

Norway started to implement climate-specificpolicy measures at an early stage. These haveresulted in sharp reductions in emissions. In Nor-way’s Third National Communication to theUNFCCC, published in December 2005, it was esti-mated that in 2020, emission reductions due tomeasures implemented since 1990 will be about 11million tonnes CO2 equivalents (see table 3.2).Continued application of current policy instru-ments, including the CO2 tax, in the years aheadwill result in further emission reductions. On asomewhat uncertain basis, it is estimated that with-out the measures implemented after 1990, green-house gas emissions in Norway would reach 75–80million tonnes CO2 equivalents in 2020. This esti-mate is based on the assumption that rising domes-tic electricity demand up to 2020 is met in thecheapest way, i.e. using electricity generated fromgas in Norway, without carbon capture and stor-age.

Norway will undertake to reduce global green-house gas emissions by the equivalent of 30 % of itsown 1990 emissions by 2020, see Chapter 1. Thismeans that emissions must not exceed 35 milliontonnes CO2 equivalents in 2020, when emissionstrading and carbon uptake in forests are taken intoaccount. This is about 15 million tonnes below the1990 level, and almost 20 million tonnes lower thanin 2006.

It is not possible at present to obtain reliable fig-ures for the emission reductions that will beachieved through existing and new measures inthe next 10–15 years (see the discussion above).Nor do we know which emission reduction mea-sures will be implemented in Norway in the periodup to 2020. This will depend among other things ontechnological advances and trends in carbonprices. Moreover, developments on the Norwegiancontinental shelf will be particularly important foremission levels in Norway in 2020. In the 2007national budget, greenhouse gas emissions in 2020were estimated at about 59 million tonnes CO2equivalents. This estimate is based on uncertainfigures. Experience shows that the figures in a ref-erence scenario of this kind are often altered astime goes on. On the basis of the mitigation analy-

sis drawn up by the Norwegian Pollution ControlAuthority, sectoral climate action plans and currentpolicy instruments, the Government considersthat a realistic target is to reduce Norwegian emis-sions by 13–16 million tonnes CO2 equivalents rel-ative to the reference scenario presented in theNational Budget for 2007, when CO2 uptake by for-ests is included. In this case, from about half andup to two-thirds of the cuts in total emissions by2020 would be made in Norway. The adoption of anew international climate agreement will make itnecessary to revise national targets and instru-ments. If emission trends indicate that Norway willnot achieve its targets, the Government will con-sider further measures.

3.5 Mitigation options for Norway and the associated costs

The Ministry of the Environment commissionedthe Norwegian Pollution Control Authority to anal-yse mitigation options for the years ahead. The mit-igation analysis that has been published is anupdate of the catalogue of measures the PollutionControl Authority drew up in 2005, and focuses ontechnical measures to reduce Norway’s green-house gas emissions up to 2020.

The projections published in the 2007 nationalbudget were, with some adjustments, used as abasis for assessing the measures. These projec-tions are based on the assumption that there willbe an annual improvement in energy efficiency. Totake this into account, the estimated emissionreductions from measures designed to improvethe energy efficiency of transport and stationaryenergy use have been reduced in the updated anal-ysis.

Both the cost estimates and the emissionreductions in the analysis are uncertain, and thereis little discussion of the specific policy instru-ments needed to encourage implementation of themitigation options. The Pollution Control Author-ity also points out that by 2020, there will probablybe new technological solutions and a different setof framework conditions that may reduce costs andoffer opportunities to reduce emission more thanthe analysis suggests.

The Pollution Control Authority’s mitigationanalysis is a «bottom-up» analysis and is particu-larly useful as a basis for assessing what measuresand restructuring processes, if any, are availablefor specific sectors in a long-term perspective, butwill not be triggered by the general policy instru-ments. Certain measures may also require direct


legislative measures by the authorities: see the dis-cussion in section 3.3. However, the analysis doesnot take into account the macroeconomic effects ofthe costs of the mitigation options. Calculationsbased on macroeconomic models (using a «top-down» approach) do in principle take these effectsinto account. In its Fourth Assessment Report, theIPCC emphasises that both approaches are usefulas a basis for drawing up climate policy.

The overall technical mitigation potential isabout 20 million tonnes CO2 equivalents, calcu-lated relative to projected emissions of 59 milliontonnes CO2 equivalents in 2020 in the referencescenario, and taking into account the assumptionson which the analysis is based. This includes allmeasures, from those that may be difficult toimplement because they involve many differentactors or require considerable technologicaladvances, to those that are technically feasibledespite their cost. Costs and feasibility wereassessed for all measures. The Pollution ControlAuthority assessed the feasibility of measures onthe basis of existing policy instruments and tech-nology.

According to the Pollution Control Authority,the analysis does not to any great extent includeoptions involving major social change, changes inproduction levels, or changes in behaviour. Thecalculations show that emission reductions of 6.5million tonnes CO2 equivalents could be achievedby implementing measures that cost less thanNOK 200 per tonne. Emission reductions totalling14.4 million tonnes CO2 equivalents in 2020 couldby achieved by including measures with a cost ofup to NOK 600 per tonne.

The mitigation analysis shows that there aremany measures with a cost of less than NOK 200per tonne, which is equivalent to the current CO2tax on light fuel oils. It may seem surprising thatsuch measures have not already been imple-mented to a greater degree. The fact that they havenot may suggest that the costs appear higher froma consumer standpoint. One reason may be that itis difficult to estimate the costs of certain barriersto implementation.

3.6 Discussion of the costs associated with an ambitious climate policy

An ambitious international climate policy willreduce the risk that climate change will cause seri-ous adverse effects, for example through a rise insea level, a shift in temperature zones, and a rise inthe frequency of extreme weather events. At the

same time, the Norwegian economy will also beaffected by the responsibility Norway accepts forreducing emissions and through changes in thevalue of Norwegian exports and imports.

A reduction target of 30 % relative to the 1990level means that Norway’s emissions must notexceed 35 million tonnes CO2 equivalents in 2020,when emissions trading is taken into account. Thisis about 15 million tonnes below the 1990 level, andabout 20 million tonnes lower than the estimate for2020 in the 2007 national budget.

It is difficult to give precise estimates of costsassociated with emission reduction measures inNorway and of future carbon prices. The EU hasrecently estimated that the global price of carbonin 2020 will be EUR 37 per tonne CO2 equivalent(about NOK 300), in a scenario with an ambitiousinternational climate agreement that involvesreducing emissions in developed countries by 60 %relative to the 1990 level. This is also in accordancewith the price trend estimated in the Stern reviewin a scenario where the concentration of green-house gases in the atmosphere is stabilised ataround 550 ppm. On the basis of an average carbonprice of NOK 300 and total emission reductions ofabout 25 million tonnes, the costs of achieving theGovernment’s 30 % reduction target are estimatedat about NOK 7.5 billion in 2020. Some of thenational measures the Government has already ini-tiated will cost more than NOK 300 per tonne emis-sion reduction. In its mitigation analysis, the Nor-wegian Pollution Control Authority also listed anumber of national measures that would cost lessthan this.

According to calculations by the NorwegianPollution Control Authority and the Low EmissionCommission, it is possible to reduce emissions inNorway substantially without incurring significanteconomic costs. However, various other calcula-tions, for example by the European Commissionand in new studies of the costs of reducing Britishgreenhouse gas emissions, suggest that large cutsin emissions will involve major costs. In its FourthAssessment Report, the IPCC estimates the costsof limiting the average rise in global temperature tono more than 2°C above the pre-industrial level atjust under 3 % of global GDP in 2030 and about5.5 % in 2050.

The Ministry of Finance has also modelled thesituation for Norway using the macroeconomicmodel MODAG, and the results indicate that thecosts of large national cuts in emissions will be sub-stantial. These calculations indicate that, giveneffective use of policy instruments, it will be possi-ble to reduce greenhouse gas emissions in Norway


by about 10 million tonnes in 2020 at a cost corre-sponding to about one per cent of mainland GDP.For 2007, this means about NOK 16 billion. How-ever, such calculations are very uncertain. Theydepend among other things on the capacity for eco-nomic restructuring in Norway, i.e. how long Nor-wegian producers, employees and other actorsneed to adapt and implement measures. As theNorwegian economy is restructured, the costs ofthe measures will be reduced.

International measures to reduce greenhousegas emissions, for example higher taxes or bindingemission allowances, may influence global con-sumption of fossil fuels. Lower demand and highertax wedges in consumer countries might in isola-tion reduce producer countries’ revenues from oiland gas production. However, trends in oil priceswill also depend on how the OPEC countriesrespond to such a change in market conditions.

Norway will contribute to the development oftechnology for carbon capture and storage. If thecosts of using this technology drop sufficiently, itcan make a significant contribution to reducingCO2 emissions even without a corresponding dropin the demand for fossil energy carriers. This is anexample of why the effects of an ambitious interna-tional climate agreement on energy prices are veryuncertain.

3.7 The Norwegian Commission on Low Emissions

3.7.1 About the Low Emission Commission

The Low Emission Commission was establishedby the Government in March 2005, with the follow-ing mandate:

«The Commission’s main task is to review howNorway can achieve significant cuts in domesticgreenhouse gas emissions in the long term – a‘national climate vision for 2050’. The Commissionis to review various scenarios describing how alow-emission society can be developed over thenext 50 years. These should include scenarios inwhich domestic greenhouse gas emissions arereduced by 50–80 % by 2050. The Commissionshould focus mainly on opportunities for develop-ing and using new technologies. This will includeconsidering which measures will be required tofully develop the potential of technological innova-tions. Key development trends must be evaluatedon the basis of the opportunities they provide fordeveloping a low-emission society. Opportunitiesfor emission reductions in all relevant sectors mustbe considered. In addition, the Commission should

as far as possible assess the costs and other conse-quences of the different scenarios, including in amacroeconomic perspective, and compare thecosts of reducing emissions in Norway with thecosts of similar reductions in other countries. TheCommission must establish a range of contacts andengage in dialogue with civil society. It is importantto include relevant researcher communities andother experts in the process. This can be donethrough debates, public hearings and by invitinginput through web-based consultations. The Com-mission’s conclusions are to be presented in theseries Official Norwegian Reports. The Commis-sion’s work has a time frame of 18 months.»

The Commission presented its report (NOU2006:18) on a climate-friendly Norway on 4 Octo-ber 2006. Its main conclusion is that reducing Nor-wegian emissions by about two-thirds by 2050 isnecessary, feasible and not prohibitively expen-sive.

The Commission’s mandate did not includemaking proposals for policy instruments to ensurethat its proposed measures are implemented.

The Government intends Norway to take itsshare of the responsibility for reducing globalemissions to a level at which we will avoid the mostserious impacts of climate change. In the longterm, Norway must become a low-emission soci-ety. The policy instruments needed to ensure thatthe necessary measures are implemented, and thecosts of applying these instruments, should be fur-ther reviewed.

There is bound to be uncertainty associatedwith recommendations with such a long time hori-zon as the Commission was asked to consider. TheCommission itself points out that most technicalequipment will be replaced during a period of 40–50 years. The technology available and choices oftechnological solutions will have a major impact onfuture emissions. It is also generally difficult to pre-dict the scale of restructuring of business andindustry that will be needed to achieve a low-emis-sion society by focusing only on emission reduc-tions in Norway.

A public consultation on the Commission’sreport was held, with a deadline for comments of27 February 2007. More than 90 answers werereceived, and there was wide support for the Com-mission’s overall solution. There was also generalagreement on the conclusion that it is possible toachieve emission cuts of the order considered bythe Commission. Some of the bodies consultedconsidered the potential for emission reductions tobe greater than the Commission concludedbecause measures that require changes in people’s


attitudes were not evaluated, while others consid-ered the estimated emission reduction potentialsof the technical measures evaluated by the Com-mission to be too low. Some bodies criticised theCommission’s mandate, and others suggested theinclusion of measures not evaluated by the Com-mission. Various bodies also pointed out that thereport does not to any great extent compare thecosts of emission reductions in Norway with thoseof similar emission reductions in other countries.

Some researchers have criticised the assump-tions on which the Low Emission Commissionbased its analysis. For example, the Commissionassumes that considerable technological advances

will be made, and proposes a major research anddevelopment initiative and demonstration projects,but does not take the costs of this initiative intoaccount. The Commission also assumes that thescale of measures adopted by other countries willnot be such that they have an effect on technologi-cal developments internationally. Some of the con-sultation bodies suggested that technologicaldevelopments on the scale the Commissionassumes would require the introduction of exten-sive measures to reduce greenhouse gas emis-sions in other countries as well. The Commissionitself states that there is considerable uncertaintyas regards the costs of its proposed package of mit-

Source: NOU 2006:18

Table 3.3 Overall solution proposed by the Low Emission Commission

Sources of emissions Measures

Basic measures 1 Initiating a long-term national climate awareness campaign; providing objective, factual information about the climate problem and what can be done about it.

2 Promoting the development of climate-friendly technologies through long-term, stable support for the Commission’s technology package. This focuses on carbon capture and storage (CCS) technologies, wind power (especially offshore), pellet stoves and clean-burning wood sto-ves, biofuels, solar cells, hydrogen technologies, heat pumps and low-emission ships.

Transport 3 Phasing in low- and zero-emission vehicles such as hybrid vehicles, light diesel vehicles, electric vehicles and fuel cell vehicles.

4 Phasing in CO2-neutral fuels such as bioethanol, biodiesel, biogas and hydrogen.

5 Reducing transport needs through improvements in logistics and urban planning.

6 Developing and phasing in low-emission vehicles.Heating 7 Increasing energy efficiency in buildings through stricter building

standards, eco-labelling and grant schemes.8 Bringing about a transition to CO2-neutral heating through greater

use of biomass, more effective use of solar heat, heat pumps, etc.Agriculture and landfills 9 Recovering methane from manure pits and landfills and using it for

energy purposes.Process industries 10 CCS at industrial plants with large point emissions.

11 Carrying out process improvements in energy-intensive manufactu-ring.

Petroleum industry 12 Electrification of installations on the continental shelf and increasing the proportion of installations sited onshore.

Electricity production 13 Providing more «new renewable» electricity by expanding wind power and small hydropower plants.

14 Implementing CCS at gas- and coal-fired power plants.15 Upgrading the electricity grid and improving its efficiency to reduce

grid losses and give small power plants better access to the grid.


igation measures. The Commission’s cost esti-mates are lower than those in international studies(which indicate that emission cuts of the order pro-posed by the Commission will cost around one percent of GDP). The Commission’s report points outthat it was difficult to find good estimates of thecosts of three of the measures included in the low-emission scenario. These are improving energyefficiency in residential and non-residential build-ings and reducing emissions from the transportsector.

3.7.2 The Low Emission Commission’s recommendations

The Commission identified what it considers to bethe major sources of Norwegian emissions in 2050and drew up recommendations for reducing theseemissions. The Commission drew up a referencescenario based on a number of assumptions, underwhich Norway’s emissions would rise further to an

estimated 69 million tonnes CO2 equivalents in2050. This corresponds to an increase of almost40 % relative to the 1990 emission level.

In drawing up recommendations for the mea-sures that should be implemented to achieve emis-sion reductions in the order of 50–80 % by 2050 rel-ative to the current level, the Commission consid-ered it important that the measures should meet anumber of criteria. These were that they should– be few and on a large scale– be based on relatively well known technology– be politically feasible– contribute to international advances in technol-

ogy– be cost effective, i.e. not unreasonably costly in

relation to the emission reductions they wereto deliver

– be robust with respect to various assumptionson future trends in the economy, trade, energyprices, climate agreements and so on.

Table 3.4 The necessary first steps proposed by the Low Emission Commission

1 Initiating a climate awareness campaign. Long-term government support for information about the climate problem and how individuals can help to reduce emissions without reducing the qua-lity of their lives.

2 Supporting the technology package proposed by the Commission and the technology initiative recommended by the climate research committee appointed by the Research Council of Norway. This involves large, long-term allocations to priority research tasks, including research to improve understanding of decision-making procedures related to climate measures.

3 Further developing technological innovations through the establishment of pilot and demonstra-tion projects.

4 Implementing CCS at all gas- and coal-fired power plants.5 Phasing in low- and zero-emission vehicles, using vehicle taxes with a better environmental profile

(registration tax, road tax, etc.), government purchases of biofuels and the introduction of mini-mum requirements for sales of biofuels (at least 5 % of sales by 2009).

6 Promoting CO2-neutral heating by means of grants for heating systems based on biofuels and heat pumps and the introduction of a refund scheme for old oil- and gas-fired boilers.

7 Promoting energy efficiency by means of stricter building standards for energy use per m2 in buildings.

8 Establishing clear, stable, long-term grant schemes for the development of renewable energy sources to replace the green certificate scheme that was proposed but not implemented. Energy delivered to the heating market must be included.

9 Encouraging climate-friendly public procurement through comprehensive motivation and trai-ning programmes for relevant groups of employees and stricter enforcement of the rules for public procurement.

10 Preparing sectoral action plans and proposals for policy instruments to achieve the goal of making Norway climate-friendly (a task for the ministries).

11 Working actively for further development of the EU emissions trading scheme and emissions tra-ding under the Kyoto Protocol, and encouraging more countries and sectors to accept binding emission commitments.


The overall solution proposed by the Commissionconsists of 15 measures, which are listed intable 3.3.

The Commission also recommended that somemeasures should be implemented in the currentparliamentary period, i.e. before 2009. These nec-essary first steps are listed in table 3.4.

The economic costs of carrying out the Com-mission’s recommendations have been calculated,and it is estimated that the overall effect on GDPand private consumption in 2050 will be less than+/-0.5 % relative to the levels in the reference sce-nario. This estimate is uncertain, among otherthings because the Commission has not specifiedwhich policy instruments will be necessary, buthas to a large extent assumed that the necessaryemission reductions will be achieved by makinguse of new technology.

The Government has already taken initiativesin line with several of the necessary first stepslisted by the Commission. The sectoral climateaction plans are presented in this white paper. TheGovernment will use economic instruments andstrengthen the promotion of new technology tomake sure that new licences for gas-fired powerplants are based on carbon capture and storage, asset out in the budget proposal for 2006. Conditions

laid down in the discharge permit issued by theMinistry of the Environment on 12 October 2006and the agreement between the State and Statoilon carbon capture and storage at Mongstad pro-vide a basis for construction of a carbon capturefacility at the Mongstad power plant. The Govern-ment has also started to restructure vehicle taxesto improve their environmental profile and hasintroduced stricter energy use requirements underthe Planning and Building Act. Furthermore, NOK10 billion has been allocated to a fund for the pro-motion of renewable energy and energy efficiencymeasures, and from 1 January 2008, there will befeed-in arrangements for renewable electricityinstead of the green certificate scheme that waspreviously proposed. The Government will launchan action plan for environmentally sound publicprocurement, and last spring a climate awarenesscampaign (Klimaløftet) was launched. The nationalclimate research initiative mentioned in point 2 oftable 3.4 is further discussed in Chapter 5. Chapter6 describes the Government’s proposals for newmeasures in various sectors of society. Internation-ally, Norway is working actively to initiate the pro-cess towards further emission cuts and a morecomprehensive climate change regime after 2012.


4 Following up the Government’s climate targets and climate action plans

The Government intends to make five-yearlyreviews of progress and how the use of policyinstruments at national level should be furtherdeveloped. As part of the review process, the Gov-ernment will commission independent expert anal-yses of Norwegian climate policy from institutionsand/or people with wide experience and knowl-edge of the development and implementation of cli-mate policy. These analyses will consider Norway’sclimate targets and the progress that has beenmade towards achieving them. They should alsoconsider the application of policy instruments, themeasures taken in response to these, and theircosts. The analyses should also recommend waysof improving climate policy and making it moreeffective. In the Government’s view, a good modelfor this process may be to ask institutions in othercountries to carry out peer reviews, since satisfac-tory results have previously been obtained

through peer reviews of both environmental andother issues.

The Government proposes that an evaluation ofclimate policy and how policy instruments shouldbe modified should be submitted to the Stortingmidway through the first Kyoto period (in 2010).Furthermore, the Government will ensure thatwhenever matters are being prepared for consider-ation by the Storting or the Government, evalua-tion of any impacts on the climate is given higherpriority than at present. This should be viewed inconnection with the Government’s intention thatthere should generally be more awareness of theeffects of policy measures on sustainable develop-ment.

Moreover, the Government will report ontrends in emissions and the implementation of cli-mate policy in connection with the ordinary bud-getary processes, for example when following upthe sustainable development strategy.


5 Research and monitoring

The Government will:– intensify the climate-related research effort in

the years ahead as part of its research policy– give priority to monitoring of climate pro-

cesses and the impacts of climate change inthe High North.

5.1 Climate research and the development of technology

5.1.1 Strengthening climate-related research

In its policy platform, the present Governmentannounced that it would strengthen climate-relatedresearch and the development of environmentallysound energy technology. In addition, a broad-based climate related research initiative was one ofthe measures recommended by the Low EmissionCommission. By focusing on knowledge genera-tion and the development of new technology, wecan give our national efforts importance farbeyond Norway’s borders. Moreover, as a richenergy producer, Norway has a special responsibil-ity for seeking to achieve advances in knowledgeand technology that will help to mitigate climatechange. The issue of climate change is so complexthat new knowledge is needed in many areas. Wealso need to generate knowledge that could beused to find solutions to future problems. Betterknowledge of the causes and impacts of climatechange will form an important basis for futurenegotiations on climate agreements, and will pro-vide the scientific basis for political decisions onhow much emissions need to be reduced. Further-more, the development of new technology forenergy production and use is a very important ele-ment of efforts to reduce greenhouse gas emis-sions in Norway and internationally. Climate andenvironmental research is also a high priority inother countries and in international cooperationforums. Two of the themes of the EU’s SeventhFramework Research Programme are environ-ment (including climate change) and energy, andthese have a total budget framework equivalent toabout NOK 34 billion for the period 2007–2013.

This is why the Government is proposing tostrengthen climate-related research and researchand development related to environmentally soundenergy technologies, including the use of renewableenergy sources and carbon capture and storage.

Research on the climate system and climatechange is of key importance for ensuring that wehave a sound knowledge base for predictions offuture climate change and its impacts. However,climate-relevant research includes much morethan this. Other examples of fields that are impor-tant in ensuring that climate policy is knowledgebased are research and development of climate-friendly technology, especially related to renew-able energy and energy efficiency; social scienceresearch on policy instruments and measures; andresearch on the vulnerability of society to climatechange and the need for adaptation. Research onsocial trends (for example population, technologi-cal level and resource consumption) and how thesetrends result in changes in greenhouse gas emis-sions is included as well. It is also important tolearn more about which policy can provide optimalsolutions for dealing with climate change on thescale believed to be inevitable. In addition, moreknowledge is needed about adaptation measuresand vulnerability in developing countries.

To ensure that we can benefit from researchresults, it is essential that they are communicatedto the authorities, politicians, the business sectorand the general public. The Research Council ofNorway, the Norwegian Pollution Control Author-ity, the Center for International Climate and Envi-ronmental Research (CICERO) and other relevantresearch institutions have a key role to play in dis-semination of knowledge relating to the climate.CICERO has been given a national responsibilityfor providing information on climate change issuesand for disseminating research results. Interna-tional efforts, particularly under the UN Intergov-ernmental Panel on Climate Change (IPCC), arealso very important in this context. The Govern-ment emphasises that it will be a key task in thetime ahead to improve communication of informa-tion on climate issues, and that all R&D institutionsworking on climate-relevant topics should give pri-ority to dissemination of their results.


Research on climate, the environment andenergy bridges disciplinary, sectoral and adminis-trative boundaries. It is therefore a joint task for thewhole Government to create momentum in thisarea. The Ministry of Education and Research,which is responsible for coordinating research pol-icy, and the Ministry of the Environment, which isresponsible for coordinating environmental policy,share the responsibility for realising a joint initia-tive for climate-related research. It is also impor-tant to encourage more user-funded research inthis field, in which research areas and opportuni-ties are defined in cooperation with the businesssector, which also has an ambition to put new cli-mate and environmentally friendly technology onthe market.

Norway has a special position in internationalclimate research because of its geographical situa-tion. The Gulf Stream results in a much warmer cli-mate in Norway than would be expected given itsnortherly latitude. Climate processes in the polarregions are of key importance for the global cli-mate system, and thus for climate trends. Ourengagement in the High North gives us a uniqueopportunity to obtain new knowledge and contrib-ute to international research results. Climatechange is taking place more rapidly in the polarregions than in the rest of the world. It is thereforeimportant to obtain better, continuous time seriesof parameters such as temperature, ocean currentsand ice thickness. This can give a deeper under-standing of the scale and speed of climate change.Maintaining long time series properly requires along-term commitment.

Norway has technological advantages that canbe important in efforts to reduce greenhouse gasemissions. We have more than 10 years’ experi-ence of carbon capture and storage on the Sleipnerfield in the North Sea, and thus have importantknowledge that can be used to reduce CO2 emis-sions from the use of fossil fuels. The projects forcarbon capture and storage at the Mongstad powerplant and the Kårstø gas-fired power plant will giveus further experience and help to reduce the costsand risks associated with establishing such facili-ties. Implementation of the Kårstø and Mongstadprojects will play an important role in demonstrat-ing that this technology can play a vital role inreducing greenhouse gas emissions, and at thesame time secure world energy supplies.

As regards renewable energy sources, thedevelopment and testing of offshore wind turbinesis particularly important. Conflicts of interest tendto arise because of the environmental disturbancecaused by wind farms onshore, and this makes it of

interest to move wind power projects offshore,where wind conditions are also better. In the longterm, large-scale development of offshore windfarms may have considerable potential globally asone of several measures to increase supplies ofrenewable energy. In Norway, offshore wind farmscan also help to supply petroleum installations withrenewable electricity. Two important drivers for agreater Norwegian research effort on offshorewind turbines are the large potential for Norwe-gian production of renewable energy on the Nor-wegian continental shelf, and a large internationalmarket where Norwegian-based technology maybe a winner.

5.1.2 Following up the recommendations of the climate research committee

At the request of the Ministry of the Environment,the Research Council of Norway appointed a cli-mate research committee in 2005 to draw up anaction plan for Norwegian climate research.Research institutions, the business sector and thepublic administration were all represented on thecommittee, which presented an action plan inAugust 2006. The action plan gives an overview ofcurrent research activity and reviews knowledgeneeds. It includes the committee’s evaluations andrecommendations as regards strategic manage-ment, meeting knowledge needs, and strengthen-ing competence building and scientific coordina-tion. In drawing up the plan, special emphasis wasgiven to clarifying each ministry’s knowledgeneeds, involvement and responsibilities within cli-mate research. The action plan provides recom-mendations to the Research Council of Norwayand the ministries on scientific and budgetary pri-orities and on coordination, long-term planningand predictability in climate research. One of thepurposes of the plan is to ensure broader involve-ment of the ministries in this research.

The Government will consider the action planfor climate research in conjunction with steps tofollow up the long-term climate targets and the sec-toral climate action plans. The Ministry of the Envi-ronment will attach importance to the sectoralresponsibilities of the various ministries for climateresearch. In addition to the specific climateresearch initiative, the broad-based effort toimprove recruitment of researchers and upgradeequipment and infrastructure at the universitiesand colleges will help to strengthen climate-rele-vant research in Norway.

I 2001, a national technology strategy, OG21,was drawn up for the oil and gas industry in Nor-


Box 5.1 Climate research

The key initiatives in the climate field at presentare as follows:

NORKLIMA

The main climate research programme of theResearch Council of Norway. The programme isintended to generate new knowledge on the cli-mate system, climate change and the impacts ofclimate change on the natural environment andsociety, and knowledge to be used as a basis foradaptation measures by society.

RENERGI

A Research Council of Norway programmecalled Clean Energy for the Future. It is directedtowards research on energy use and energy effi-ciency, and the structural and technologicalframework for this. RENERGI also includesresearch on international climate agreements.

CLIMIT

Public funding for the development of CO2 cap-ture and storage technologies is channelledthrough the Natural Gas Power programme,CLIMIT, which is administered jointly by Gass-nova and the Research Council of Norway.

Environment 2015

A major environmental research programmestarting in 2007. The social science thematicarea of Environment 2015 includes research ondrivers and conditions for sustainable develop-ment, including climate change.

International Polar Year (IPY)

A large scientific programme for the period2007–2009, intended to generate new knowledgeof fundamental processes and key natural phe-nomena in the polar regions.

Area- and Nature-based Industrial Development (AREAL) and the Wood R&D Programme

These are both Research Council of Norway pro-grammes. AREAL aims to advance area- andnature-based economic development in Norway.The Wood R&D Programme is intended to pro-mote generation of value added throughresearch and development in forestry and wood-based industries. Bioenergy is an important ele-ment of both programmes.

Energi21The Ministry of Petroleum and Energy hastaken the initiative for the development of anoverall strategy for research and development inthe energy sector, modelled on the process inthe oil and gas sector (OG21).

OG21

The OG21 Task Force is seeking to reduce CO2emissions from the Norwegian continental shelf,and one of the technology target areas in its strat-egy is environmental technology for the future.OG21 is also working on carbon capture andstorage and the use of CO2 for enhanced oilrecovery. OG21 was involved in initiating theHalten CO2 project, in which Statoil and Shell areevaluating the use of CO2 for enhanced oil recov-ery on the Draugen and Heidrun fields.

Education for Sustainable Development

The Education for Sustainable Developmentplan provides a scientific and educational frame-work for following up broad-based climateawareness and information campaigns. In coop-eration with relevant experts, including the envi-ronmental authorities, a web-based tool calledthe Environmental Education Network(www.miljolare.no) has been developed, whichprovides guidance on activities dealing with top-ics such as air and water pollution and energyand resources. Schools can achieve real reduc-tions in energy use by taking part in these activ-ities. The Education for Sustainable Develop-ment plan can also be used as a basis for informa-tion and campaigns to bring about changes in thebehaviour of pupils and their families.

Strategy for joint promotion of mathematics, science and technology

Climate-relevant research is heavily dependenton scientific knowledge. The current strategy forjoint promotion of mathematics, science andtechnology is intended to promote interest inand recruitment to disciplines that are relevantto climate research. As the strategy is imple-mented, greater weight will be given to the chal-lenges of climate change in order to increaseinterest in and understanding of these problemsamong children and young people.


way. Its main aim is to increase value creation onthe Norwegian continental shelf and to increaseexports of Norwegian oil and gas technology.Eight technology target areas have been estab-lished as part of the strategy, one of which is envi-ronmental technology for the future. In addition,the Minister of Petroleum and Energy recently ini-tiated a process (Energi21) to establish a broad-based, unified research and development strategyfor the energy sector. The purpose of the strategyis to ensure the growth of sustainable economicactivity and supply-side security in the energy sec-tor by promoting and coordinating research, devel-opment, demonstration and commercialisation ofnew technology.

The Government will consider whether toestablish a forum for strategic cooperation on cli-mate and environmental research modelled onOG21 and Energi21, and will involve actors in cli-mate and environmental research, includingresearch institutions, environmental organisa-tions, public authorities and the private sector, inthis cooperation process.

5.1.3 The Research Council’s national action plan for climate research

According to the action plan for climate researchdrawn up by the Research Council of Norway, atotal of NOK 1012 million was spent on climateresearch in Norway in 2005. The main emphasis ofNorwegian climate research is on the natural sci-ences, followed by technological research andsocial science research. Climate research has beenstrengthened since the coordinating committee forclimate research appointed by the Research Coun-cil submitted its report in 2000. The climateresearch committee appointed in 2005 concludesthat the natural science initiative for climate-related research has been successful, and notesthat Norway has internationally recognisedresearch communities working on the climate sys-tem, climate trends and the impacts of climatechange on ecosystems. Moreover, the committeenotes that Norway has a leading position in techno-logical climate-related research, especially carboncapture and storage, and that there has been a con-siderable expansion in energy research in recentyears. The committee stresses the importance oflinking technological research closely to social sci-ence research on prerequisites and instrumentsfor promoting the use of new technology. However,according to the committee, research on theimpacts of and adaptation to climate change does

not cover all sectors and aspects of society that willbe affected by climate change. In addition, thecommittee considers social science research to besomewhat fragmentary and split between a num-ber of institutions. This field includes research onnational and international climate policy, the frame-work conditions and opportunities for implementa-tion of technological solutions, vulnerability andadaptation, and the links between social develop-ment trends and emissions trends.

The action plan describes the main features ofthe involvement of various sectors and bodies inNorwegian climate research. The committee con-siders that several ministries are not sufficientlycommitted to climate research. This applies bothto the provision of funding for climate-relatedresearch and to the ministries’ understanding andcommunication of knowledge needs relating to thesignificance of climate change for their own sec-tors and the responsibility of these sectors forgreenhouse gas emissions. The scope of private-sector involvement in climate research is consid-ered to be too narrow. The committee also pointsout that there is insufficient high performancecomputing capacity and important infrastructurefor collecting the monitoring data needed for cli-mate research, and that knowledge and dissemina-tion of the results of climate research is too frag-mented to contribute constructively to the publicdebate.

The committee recommends steps tostrengthen Norwegian climate research, andpoints particularly to the need to strengthen,increase involvement in and build up competencein social science research. The committee alsoidentifies a need for Norwegian research in areaswhere Norway has special national interests thatother nations cannot be expected to follow up: forexample, Norway as an energy nation, andresearch needs relating to geographical location,industrial structure and ecosystems in transitionalzones. In the committee’s opinion, Norway’s exper-tise and financial resources mean that we shouldtake a special global responsibility for research insuch fields.

The committee’s recommendations include thecontinuation and strengthening of government-funded research in the following fields:– Understanding of the climate system and cli-

mate trends: this can reduce uncertainty andimprove our ability to predict future climatechange.

– Technological opportunities for reducinggreenhouse gas emissions: will involve con-tinuing the focus on carbon storage and renew-


able energy and energy efficiency, andopenings for other research on climate-relatedtechnology.

– Understanding of the social constraints on andinstruments for introducing technology; theimplementation of climate policy at nationaland international level.

– Knowledge about the ecological impacts of cli-mate change, focusing on understanding ofprocesses and systems: this is also a basis forunderstanding the impacts of climate changeon industries based on natural resources.

– Social consequences of climate change, vulner-ability and adaptation to climate change.

– Climate change and its impacts in the Arcticand the Barents Sea, where there is a particu-lar need for knowledge.

The climate research committee emphasises thatthere is a special need to ensure the continuation of

long time series, which is something that requirespredictable long-term funding. The committee rec-ommends a substantial increase in the funding pro-vided by the ministries. In the committee’s view,several ministries are showing less commitment toclimate research than they should, given the com-mittee’s interpretation of their sectoral responsibil-ities in this field. Moreover, the committee consid-ers it necessary to improve interministerial coordi-nation of climate research, and recommends theestablishment of a permanent arrangement,headed by the Ministry of Education and Research.

According to the committee, climate researchis underfunded. The existing research pro-grammes are not fully financed according to thefunding needs set out in their programme plans. Inaddition, the budgetary framework needs to beexpanded to address knowledge gaps that havebeen identified and to allow for new proposedresearch initiatives.

Box 5.2 Limiting CO2 emissions from activities in Svalbard

In 2006, the University Centre in Svalbard, withthe support of experts in the SINTEF Groupand the Norwegian University of Science andTechnology, started a local initiative to makeSvalbard «CO2-free» by 2025. A report on thisinitiative describes a number of measures thereare plans to phase in. They include the use ofbiodiesel in electricity production and in vehi-cles in Svalbard. In addition, the possibility ofcarbon capture and storage at the coal-firedpower plant in Longyearbyen will be conside-red.

Although Svalbard accounts for only amodest proportion of Norway’s total greenho-use gas emissions, the ambitious environmentaltargets that have been set for the archipelagoimply that activities and settlements, both Nor-way’s and those of other parties to the SvalbardTreaty, should be based on solutions that haveas little impact as possible on the climate andthe environment. This is also in accordance withthe principles underlying the Svalbard Environ-mental Protection Act.

The Government will continue its efforts tomake the Svalbard community more climate-fri-endly. The goal will be to identify and implementcost-effective measures to achieve substantialcuts in greenhouse gas emissions from activitiesin Svalbard.

The Government will encourage the choice ofclimate-friendly solutions, for example throughthe framework it sets for electricity productionand other activities in Svalbard. This frameworkand requirements that are laid down will bedesigned to ensure that future energy suppliesare based on solutions and technology that mini-mise greenhouse gas emissions.

However, in Svalbard as in other areas, thecosts of climate measures must be in reasonableproportion to the reductions in emissions thatcan be achieved.

Carbon capture and storage is a very costlyprocess. Efforts in this area must thereforefocus on measures and projects that will provideconsiderable benefits in the form of emissionreductions and technological advances. TheGovernment will concentrate efforts in this areaon the combined heat and power plant at Mong-stad and Naturkraft’s gas-fired power plant atKårstø, and on the CLIMIT research pro-gramme administered by Gassnova. Govern-ment funding towards the development andestablishment of carbon capture and storagecannot therefore be expected if a new coal-firedpower plant is constructed in Longyearbyen.


5.1.4 Climate research in Norwegian development cooperation

Norway’s extensive research results and experi-ence of climate research in the Arctic put the coun-try in a special position and open the way for anexpansion of the research dimension of Norwe-gian development cooperation. Knowledge of theimpacts of climate change in the Arctic, obtainedfor example through the 2004 Arctic ClimateImpact Assessment (ACIA), is also widely applica-ble to other regions that are vulnerable to climatechange. As an element of Norwegian developmentcooperation and of Norwegian climate research atinternational level, the Government is providingsupport for two cooperation projects that are usingmethodology, results and experience from ACIA.These projects are investigating the impacts of cli-mate change on the Himalaya region and on smallisland developing states. They are internationalcooperation projects, involving participation by anumber of states in the regions concerned.

International cooperation on climate researchis also a very important element of the Govern-ment’s efforts to achieve emission reductions inthe major developing country emitters. Climateresearch cooperation is therefore being includedin cooperation agreements that are being drawn upor have already been concluded with countriessuch as China, India, Indonesia, Brazil and SouthAfrica. Cooperation on the development of alterna-tive energy sources, energy efficiency and carboncapture and storage is of particular interest in thisconnection.

Like the developed countries, developing coun-tries need to develop knowledge, expertise andcapacity in all disciplines, and through both basicand applied research. They need this to be able tomake use of knowledge and technology developedby others and adapt them to local conditions.Developing countries are among those mostseverely affected by climate change, and they havethe most limited resources for analysing and miti-gating the problems. It is therefore important togive higher priority to research assistance, build-ing up research expertise, building up researchinstitutions and research infrastructure, andresearch cooperation in development cooperation.

5.2 Climate-related monitoring

The Climate Change Convention sets out obliga-tions for the developed countries relating toresearch and monitoring. The Conference of the

Parties in Nairobi in 2006 urged developed coun-tries to expand the scope of climate-related moni-toring.

The Government’s aim is for Norway to be atthe forefront of international efforts to developknowledge in and about the High North, as set outin its High North Policy. Norway’s programme forits chairmanship of the Arctic Council also empha-sises the need to strengthen climate-relatedresearch and monitoring. The temperature is ris-ing about twice as fast in the Arctic as in the rest ofthe world. Heat transport into the Arctic Oceantakes place through the Norwegian part of the Arc-tic. Norway therefore has a special responsibilityfor monitoring climate processes and their impactson the environment, people and society in the Arc-tic. By intensifying research and monitoring in theHigh North, we can gain a unique insight into theongoing process of climate change, and the posi-tive feedback effects climate processes in thisregion have on global warming and the impacts onnature and society.

Norway has well-developed research infra-structure and internationally leading centres ofexcellence in polar research. Norway has alsotaken a leading role in research linked with theInternational Polar Year 2007–2008. However,there have been significant cuts in allocations tocertain monitoring programmes in the last fewyears. Strengthening climate-related monitoringwill be of great strategic importance in furtherefforts to strengthen international agreements. Atpresent, climate-related monitoring programmesin the High North are fragmentary, and there arevery few long time series for climate and climate-related measurements in the Arctic. Climate moni-toring programmes should cover both the atmo-sphere and the oceans. It is particularly importantto monitor the ocean climate, because the greatestimpact of climate change is on the distribution ofsea ice. Closer monitoring of ocean circulation,fresh water and sea ice distribution, for example inthe Fram Strait, will provide a basis for earlierwarnings of change. Furthermore, monitoring ofthe ozone layer in the High North is importantbecause climate change also increases the proba-bility of an «ozone hole» above the polar regions.Ozone measurements in Svalbard were discontin-ued in 2003 as a result of cuts in funding.

Climate change will affect most sectors of soci-ety and most forms of economic activity, and will beparticularly important for developments in theHigh North. Ensuring that there is an integrated,long-term monitoring system is therefore a con-cern for several sectors.


6 Sectoral climate action plans

6.1 Sectoral climate action plans

The Government proposes climate action plansand sectoral targets for the main sectors responsi-ble for greenhouse gas emissions in Norway.Action plans have been drawn up for the followingsectors: petroleum and energy, transport, the man-ufacturing industries, primary industries andwaste management, the municipalities, and func-tions in the state sector.

The main purpose of the action plans is to iden-tify measures that will result in cost-effective emis-sion reductions that are not currently being imple-mented in the sector concerned. This is also thestarting point for the targets set out for each sector.The sectoral targets are based on estimates, andwill have to be reviewed in response to anychanges in projections, costs, technologicaladvances and other relevant factors. The currentestimate for the technical emission reductionpotential for each sector is presented, togetherwith measures the Government intends to initiate.

The Ministry of the Environment commis-sioned the Norwegian Pollution Control Authorityto analyse mitigation options for the period up to2020. This mitigation analysis is further discussedin Chapter 3.5. The analysis focuses mainly ontechnical measures, and does not to any greatextent include options involving major socialchange, changes in production levels, or changesin behaviour. The Government will in particularconsider measures that will be cost effective with aprojected rise in carbon prices over the lifetime ofthe investment, and that will not necessarily beimplemented in response to current policy instru-ments. In this connection, priority will be given tomeasures that promote technological develop-ments. Measures may also be considered toencourage the population as a whole to begin achangeover to a low-emission consumption patternsooner than they would as a result of the projectedrise in carbon prices alone.

The Government’s proposals for sectoral mea-sures and targets are briefly described below. Fur-ther details and a description of climate measuresfor the state sector are only available in Norwe-gian.

6.2 Petroleum and energy

The petroleum sector

In its mitigation analysis, the Norwegian PollutionControl Authority estimated the technical emissionreduction potential for the petroleum sector in2020 at 4.6 million tonnes CO2 equivalents. TheCO2 tax and the emissions trading scheme are themost important policy instruments in the petro-leum sector at present. In addition, the authoritieshave made use of the Petroleum Act to limit emis-sions by introducing a general prohibition againstflaring. The Government will seek continuedprogress in maximising resource recovery on theNorwegian continental shelf, among other thingsthrough an increased recovery rate, additionaldevelopments and new projects. The Governmentwill continue efforts towards the electrification ofthe Norwegian continental shelf by means of tech-nological advances and the use of general policyinstruments.

In addition, the Government proposes the fol-lowing measures:– Intensifying efforts to develop emission-free

energy systems, including research on off-shore wind energy. On the basis of technical, fi-nancial and supply considerations, electricitygenerated onshore or emission-free electricityis to be considered for new developments andmajor development projects.

– The Norwegian Petroleum Directorate, theNorwegian Water Resources and EnergyDirectorate and the Norwegian Pollution Con-trol Authority will produce an updated analysisof electricity generated onshore/emission-freeelectricity for the petroleum industry by 31December 2007.

The energy sector

In its mitigation analysis, the Norwegian PollutionControl Authority estimated the technical emissionreduction potential for the energy sector in 2020 at3.2 million tonnes CO2 equivalents. The CO2 tax,the emissions trading system and Enova SF are themost important policy instruments in the energy


sector at present. In addition, the Planning andBuilding Act can be used. The Governmentassumes that part of the reduction potential will bereleased by means of these instruments.

In addition, the Government proposes the fol-lowing measures:– Increasing the capital of the fund for sustain-

able gas technologies.– Increasing the capital of the fund for the pro-

motion of renewable energy and energy effi-ciency measures by up to NOK 10 billion by2012.

– Establishing a demonstration programme forthe development and introduction of newrenewable energy technologies offshore: thiswill include developing and testing new tech-nologies for offshore wind turbines.

– Establishing a new support scheme underEnova for the conversion of oil-fired boilers torun on renewable fuels. In addition, the intro-duction of a prohibition against replacing oldoil-fired boilers with new ones of the same typein existing buildings is being considered.

– Prohibiting the installation of oil-fired boilersin new buildings under the Planning and Build-ing Act. The prohibition will be effective from1 January 2009. There will be room for the nec-essary exemptions, for example to ensure thatenergy supplies to important institutions aremaintained.

– Continuing efforts to ensure that heating sys-tems are not converted from oil to electricitywhen oil-fired boilers are replaced in existingbuildings.

– Reviewing the tax system with a view tochanges that will encourage environmentallyfriendly behaviour. This is to be done within arevenue-neutral framework. The Governmentwill maintain the same overall tax level as in2004, and raised environmental and climate-related taxes will be offset by reductions inother taxes.

– Ensuring targeted and coordinated use of pol-icy instruments to expand the production ofbioenergy by up to 14 TWh by 2020.

– In addition, the Government will consider:– Further expansion of measures to promote

new renewable energy and greater use ofbioenergy.

– Further efforts to bring about a shift in energyproduction and use and the introduction of nat-ural gas, and assessing whether the position ofthe most environmentally sound forms ofenergy can be strengthened so that they arenot outcompeted.

– Altering the arrangements for interruptibletransmission so that they no longer enableelectricity to outcompete new renewableenergy in the heating market.

Target

The Government’s target is that existing and newpolicy instruments in the petroleum and energysector should result in a reduction in greenhousegas emissions from this sector of three to four mil-lion tonnes CO2 equivalents relative to the refer-ence scenario used as a basis for the NorwegianPollution Control Authority’s mitigation analysis.

The targets for each sector are based on esti-mates, and will have to be reviewed in response toany changes in projections, costs, technologicaladvances and other relevant factors. If trends indi-cate that the targets will not be achieved, the Gov-ernment will consider further measures.

6.3 Transport

Land transport and air traffic

In its mitigation analysis, the Norwegian PollutionControl Authority estimated the technical emissionreduction potential for the land transport and airtraffic sector in 2020 at 4.4 million tonnes CO2equivalents. The CO2 tax, vehicle taxes, grants forpublic transport and footpaths and cycle paths, andland-use policy are the most important policyinstruments in the land transport and air trafficsector at present. The Government assumes thatpart of the reduction potential will be released bymeans of these instruments.

In addition, the Government proposes the fol-lowing measures:– Strengthening incentives for urban areas to im-

prove public transport and curb the growth inpassenger car traffic (known as thebelønningsordning), and giving priority to urbanareas that wish to test road pricing, variable tollrates or other measures to reduce traffic.

– Continuing efforts to reduce congestion prob-lems for public transport and access forcyclists in towns.

– Intensifying efforts to make transport moreenvironmentally friendly. The Government willconsider the establishment of a separate bodyfor this purpose (Transnova) and other instru-ments.

– Continuing efforts to improve rail transport.


– Reviewing whether part or all of the transportsector should be included in the emissionstrading scheme.

– Reviewing the tax system with a view tochanges that will encourage environmentallyfriendly behaviour. This is to be done within arevenue-neutral framework. The Governmentwill maintain the same overall tax level as in2004, and raised environmental and climate-related taxes will be offset by reductions inother taxes.

– In cooperation with relevant actors, taking theinitiative for a strategy for expanding R&D onsecond-generation biofuels, including evaluat-ing support schemes for demonstration facili-ties. The possibility of Nordic and internationalcooperation will be considered.

– Working towards the inclusion of internationalair traffic in future climate agreements.

– Working towards taxation of international airtraffic, the revenues from such taxation to beused towards funding of the UN.

– Holding a public consultation on proposals toamend the regulations to require biofuels toaccount for at least 2 % by volume of annualsales of road traffic fuels from 2008, rising to5 % by volume from 2009. The Government willcontinue to work towards the goal that biofuelsshould account for about 7 % by volume ofsales from 2010.

– Evaluating wider use of road tolls and roadpricing. In autumn 2007, the Government willpresent a white paper proposing that revenuesfrom road tolls may be used for public trans-port. This is also discussed in the white paperon the Oslo region, which makes it clear thatthis is something that will continue to bedecided locally.

– Playing a leading role in European efforts tointroduce stricter standards for vehicles,including seeking to ensure that new vehiclessold after 2015 can use a substantial proportionof climate-neutral or emission-free fuel.

In addition, the Government will consider:– Further measures to reduce the environmental

impact of the Norwegian vehicle population.– Seeking to ensure that all local and central gov-

ernment vehicles run on CO2-free or CO2-neu-tral fuel by 2020.

– Giving higher priority to road-related mea-sures that have positive effects on the climate.

– On the basis of the results of the feasibilitystudy that has been started, considering

whether to start a planning process for high-speed trains.

Shipping

In its mitigation analysis, the Norwegian PollutionControl Authority estimated the technical emissionreduction potential for the shipping sector in 2020at 300 000 tonnes CO2 equivalents. The CO2 tax isthe most important policy instrument in the ship-ping sector at present. The Government assumesthat part of the reduction potential will be releasedby means of this instrument.

In addition, the Government proposes the fol-lowing measures:– Building up infrastructure for the distribution

of natural gas, among other things to facilitatethe introduction of ferries powered by naturalgas.

– Drawing up and presenting an overview of alltaxes and fees that apply to maritime transportand comparing them with those that apply toother types of transport, in order to promote ashift in goods transport from road to sea.

– Working to promote the inclusion of interna-tional shipping in future international agree-ments on climate change.

In addition, the Government will consider:– Drawing up a mitigation analysis dealing with

costs and the CO2 emission reduction potentialin the shipping sector, and reviewing the possi-bility of using alternative energy carriers.

– Promoting and facilitating greater energy effi-ciency and technological advances in the ship-ping sector.

– Introducing stricter environmental require-ments for central government procurement ofshipping services.

Target

The Government’s target is that existing and newpolicy instruments in the transport sector shouldresult in a reduction in greenhouse gas emissionsfrom this sector of 2.5–4 million tonnes CO2 equiv-alents relative to the reference scenario used as abasis for the Norwegian Pollution Control Author-ity’s mitigation analysis. The targets for each sec-tor are based on estimates, and will have to bereviewed in response to any changes in projec-tions, costs, technological advances and other rele-vant factors. If trends indicate that the targets willnot be achieved, the Government will consider fur-ther measures.


6.4 Manufacturing industries

In its mitigation analysis, the Norwegian PollutionControl Authority estimated the technical emissionreduction potential for the manufacturing sector in2020 at 5.8 million tonnes CO2 equivalents.

The emissions trading scheme and voluntaryagreements that run until 2007 are the most impor-tant policy instruments in the manufacturing sec-tor at present. In addition, the Pollution Control Actis applicable. The Government assumes that partof the reduction potential will be released bymeans of these instruments.

In addition, the Government proposes the fol-lowing measures:– Continuing to consider which policy instru-

ments should apply to industries that are notcovered by the emissions trading scheme orsubject to the carbon tax, including whether torequire some or all of these industries to takepart in the emissions trading scheme, and/orvoluntary agreements. This process will be car-ried out in a dialogue with the manufacturingsector.

– A new investment fund has been establishedand will give priority to the environment,energy, tourism, marine and maritime sectors,in line with the Government’s policy platform.It will focus particularly on climate and envi-ronmental measures in all five areas.

In addition, the Government will consider:– The technical opportunities for and costs of ap-

plying carbon capture and storage to processemissions.

The Government’s target is that existing and newpolicy instruments in the manufacturing sectorshould result in a reduction in greenhouse gasemissions from this sector of two to four milliontonnes CO2 equivalents relative to the referencescenario used as a basis for the Norwegian Pollu-tion Control Authority’s mitigation analysis.

The targets for each sector are based on esti-mates, and will have to be reviewed in response toany changes in projections, costs, technologicaladvances and other relevant factors. If trends indi-cate that the targets will not be achieved, the Gov-ernment will consider further measures.

6.5 Primary industries and waste management

Agriculture

In its mitigation analysis, the Norwegian PollutionControl Authority estimated the technical emissionreduction potential for the agricultural sector in2020 at 1.1 million tonnes CO2 equivalents. TheGovernment assumes that part of the reductionpotential will be released by means of existinginstruments such as requirements for fertiliserplans and regulation of the spread and storage ofmanure.

In addition, the Government proposes the fol-lowing measures:– Encouraging tree planting and active use of sil-

viculture to increase forest production, usingexisting policy instruments as a basis and insuch a way that priority is given to measuresthat contribute both to mitigation of climatechange and to conservation of biodiversity andother environmental assets.

– Establishing a development programme for cli-mate measures in the agricultural sectorfunded through the Agricultural Agreement,including measures to reduce N2O emissionsand to build up knowledge about biogas pro-duction.

In addition, the Government will consider:– Encouraging greater production of biogas.– Policy instruments to encourage action to

reduce N2O and methane emissions from theagricultural sector.

– Encouraging measures that will result in a con-tinued high annual increment and large netuptake of CO2 in forests, and increasing sup-port for research and competence-building infields relating to forestry, forest products,bioenergy and the impacts of climate changeon the agricultural sector, including buildingup knowledge on the protection of existing car-bon sinks in forest.

Fisheries

In its mitigation analysis, the Norwegian PollutionControl Authority estimated the technical emissionreduction potential for the fisheries sector in 2020at 50 000 tonnes CO2 equivalents. The Governmentassumes that part of the reduction potential will bereleased by means of current policy instruments.

In addition, the Government proposes the fol-lowing measures:


– Promoting and facilitating greater energy effi-ciency and technological advances in the fish-ing fleet, and reviewing the possibility ofswitching to alternative energy carriers.

– Encouraging the inclusion of requirements forlow CO2 emissions when new investments aremade in the fishing fleet.

Waste management

In its mitigation analysis, the Norwegian PollutionControl Authority estimated the technical emissionreduction potential for the waste management sec-tor in 2020 at 0.4 million tonnes CO2 equivalents.

Requirements relating to waste management,the tax on final waste disposal and producerresponsibility schemes are the most important pol-icy instruments in the waste management sector atpresent. The Government assumes that part of thereduction potential will be released by means ofthese instruments.

In addition, the Government proposes the fol-lowing measures:– Prohibiting landfilling of biodegradable waste

from 2009. The landfill tax will continue to applyto waste, including biodegradable waste, that islandfilled. The Norwegian Pollution ControlAuthority has drawn up a proposal for amend-ments to the regulations relating to the recov-ery and treatment of waste, including a prohibi-tion against landfilling of biodegradable waste,and a public consultation will be held on thisproposal. The Government will make a final de-cision on how the prohibition is to be wordedafter the consultation.

– Increasing methane recovery from existinglandfills. This involves installing recovery sys-tems at landfills where organic material hasbeen deposited. The methane can either beflared or used in energy production. In eithercase, emissions are reduced.

In addition, the Government will consider:– Measures to increase energy recovery from or-

ganic waste, including production of biogas,electricity, biofuels, and construction of infra-structure for using waste for industrial heatingand/or district heating of residential buildings.

Target

The Government’s target is that existing and newpolicy instruments in the primary industries andwaste management sector should result in a reduc-tion in greenhouse gas emissions from this sectorof 1–1.5 million tonnes CO2 equivalents relative tothe reference scenario used as a basis for the Nor-wegian Pollution Control Authority’s mitigationanalysis. The targets for each sector are based onestimates, and will have to be reviewed in responseto any changes in projections, costs, technologicaladvances and other relevant factors. If trends indi-cate that the targets will not be achieved, the Gov-ernment will consider further measures.

6.6 Climate-related efforts at municipal level

The Planning and Building Act is one of the mostimportant policy instruments in the municipal sec-tor at present. The Government assumes thatemission reductions will be achieved through useof this instrument in climate-related efforts atmunicipal level. Many of the instruments that arerelevant to the municipal sector are discussed inthe sections on specific sectors, including theenergy sector and the transport sector.

In addition, the Government proposes the fol-lowing measure:– Developing a programme for «Towns of the Fu-

ture». Norway’s largest towns will be invited tojoin in a cooperative effort to identify measuresthat can be implemented, what effect they willhave on greenhouse gas emissions, the costsfor various actors, and how different actors cancontribute. The Ministry of the Environmentwill coordinate this work.

In addition, the Government will consider:– National policy guidelines for climate-related

efforts at municipal level

The Government’s aim is for municipal policyinstruments to make a greater contribution toreducing greenhouse gas emissions in Norwaythan they do at present.

Published by:Norwegian Ministry of the Environment

Internet adress: www.government.no

Coverillustration: Thomas Bickhardt, Scanpix

Printed by: 07 Gruppen AS 04/2008 – Impression 1000

Summary in English: Report No. 34 (2006–2007) to the Storting

Norwegian climate policy

MILJØMERKET

241 379 Trykksak

omslag.indd 1 04.04.2008 10:57:29

Date post:	09-Feb-2022
Category:	Documents
Upload:	others
View:	1 times
Download:	0 times

Summary in English: Report No. 34 (2006–2007) to the Storting

Documents