Press release

Date: 22.03.02

The Norwegian Government presents plans for a more proactive policy on climate change

The Norwegian Government proposes ratification of the Kyoto Protocol – more action on climate change before 2008

The Government intends Norway to be one of the first industrialised countries to ratify the Kyoto Protocol on greenhouse gas emissions. Today, the Government is submitting a proposition on ratification of the protocol to the Storting (Norwegian parliament). At the same time, it presents a supplementary white paper on Norwegian climate policy containing plans for reductions of Norwegian greenhouse gas emissions in the period up to 2008. These include continued use of the CO ₂ tax and the introduction of a domestic emissions trading system from 2005 for greenhouse gas emissions from sources that are not subject to the CO ₂ tax. The white paper also proposes a number of other actions, and lays the basis for substantial reductions in Norwegian emissions.

“The coalition Government has announced a more proactive climate policy. The ratification of the Kyoto Protocol and the supplementary white paper on Norwegian climate policy ( Report No. 15 (2001-2002) to the Storting) are important steps in the right direction,” says Minister of the Environment, Børge Brende.

Kyoto Protocol in force by the World Summit in Johannesburg?

The Kyoto Protocol under the Climate Change Convention is the first legally binding agreement that contains quantified commitments by industrialised countries to reduce their emissions of greenhouse gases. However, the protocol will not enter into force until at least 55 countries that accounted for at least 55 per cent of total CO ₂ emissions from the industrialised countries in 1990 have ratified it. Until now, only two industrialised countries, Romania and the Czech Republic, have ratified the protocol. “By ratifying the Kyoto Protocol at an early date, Norway will be doing what it can to ensure that it enters into force by the World Summit on Sustainable Development in Johannesburg in August. Although Norway is only responsible for a small proportion of total emissions from industrialised countries, this should be an important signal for other industrialised countries,” says Mr Brende.

The entry into force of the Kyoto Protocol is vital to ensure that the industrialised countries take the necessary steps to implement their commitments. On the other hand, this is by no means enough to solve the problem of climate change in the long term. The new white paper supplements last year’s white paper on climate policy from the previous government. It states that Norway intends to take an active part in initiating negotiations on more extensive commitments after 2012, which should also include the USA and developing countries with large and fast growing emissions.

Quota-based emissions trading

The Government considers it to be in Norway’s interests to reduce its own greenhouse gas emissions. By starting the adjustment process now, we will be in a better position to meet tougher restrictions on emissions later. The Government plans a series of climate-related measures in the period up to 2008. These will include continuing to levy the CO ₂ tax at the current level and introducing a quota-based domestic emissions trading system for enterprises that are not currently subject to the CO ₂ tax. By continuing to levy the CO ₂ tax up to 2008, it should be possible to avoid increases in emissions from sectors that are subject to the tax even if prices for emission quotas are low. Combining these two policy instruments is thus a more effective way of ensuring cuts in Norwegian emissions. Almost all sectors will be regulated by climate policy instruments. This will help to meet the requirement to make “demonstrable progress” by 2005, as set out in the Kyoto Protocol.

“The main reason for introducing a quota-based emissions trading system at this early date is to stimulate further cost-effective action in Norway. It will ensure that we really achieve cuts in emissions and give industries and the authorities useful experience of emissions trading,” says Minister of the Environment Børge Brende.

It is important for the Government to devise policy instruments that does not unduly hamper the competitiveness of industry. Closure of industrial enterprises because of excessive climate-related costs before 2008 should be avoided, if the companies will be profitable when paying the international quota price during the first commitment period under the Kyoto Protocol. It therefore proposes to issue quotas free of charge in the period 2005-2007 (a process known as grandfathering), but at the same time ensure that an overall reduction in emissions is achieved. Businesses will thus have incentives to reduce their emissions, but the total costs will not be unreasonably high.

From 2008, the plan is to link the emissions trading system to the Kyoto Protocol and expand it to include all sectors where this is possible in practice. The system will become the main policy instrument for fulfilling Norway’s Kyoto commitments for the period 2008-2012. This is in accordance with the proposals in last year’s white paper on climate policy (Report No. 54 (2000-2001) to the Storting).

Other proposals

In addition to the CO ₂ tax and the quota-based emissions trading system, the white paper proposes a series of steps to cut Norway’s emissions in accordance with the 2001 Sem Declaration describing the political platform of the present Government:

• Greater use of waste as a source of energy to replace fossil fuels. A prohibition on all landfilling of biodegradable waste will be considered. The tax on final waste treatment will be reorganized and adapted to Norway’s climate policy.
• Reduction of the use of mineral oils for heating by at least 25 per cent in the period 2008-2012 compared with the average for the period 1996-2000. As one step in this direction, an action plan is to be drawn up for conversion from oil-fired heating to new renewable energy sources.
• Steps to strengthen research into the development of environmentally-friendly technology.
• Establishment of a framework that will make it possible to establish gas-fired power plants with CO ₂ reduction technology.
• Steps to facilitate power supplies from land to more oil installations: the Government will evaluate various ways of doing this.
• Evaluation of further measures to reduce emissions from flaring on the continental shelf.
• Steps to ensure that transport policy effectively helps to reduce greenhouse gas emissions. For example, the Government will give environmental impacts considerable weight in decisions on purchases of transport services and vehicles for the central government administration. Steps will also be taken to facilitate the use of biofuels.
• Taxation of imports of HFCs and PFCs. The tax rate should be similar to the CO ₂ tax on fuel oils.
• Agreement on reductions in SF ₆ emissions with relevant branches of industry (electrical and electronic equipment). This has already been achieved.