Norway will accelerate its reductions of carbon dioxide emissions to be completely carbon neutral by 2030—20 years ahead of the original target. The climate policy underlying this is the result of an agreement between the government of Prime Minister Jens Stoltenberg and the three large opposition parties.
The government will use a combination of domestic funding to develop renewable energy sources and carbon capture and storage technology; strengthen public transport; and implement measures to reduce emissions from the transport sector. At the same time, taxes on diesel fuel and gasoline will be increased. The plan also relies on large annual purchases (approaching US$550 million) of carbon offsets through international emission trading systems.
The parties believe that it is realistic to assume that Norway’s annual greenhouse gas emissions can be reduced by 15–17 million tonnes of CO2 equivalents by 2020 when forest carbon uptake is included. About two thirds of Norway’s total emissions reductions will need to be made nationally, the remainder coming from emission trading. Transportation accounts for 38% of Norway’s greenhouse gas emissions.
Among the planned immediate actions are:
The government will set aside an additional NOK 70 million (US$12.8 million) for research on renewable energy and carbon capture and storage. In 2009 this additional allocation will increase to NOK 300 million (US$54.8 million). By 2010 public support for research on renewable energy and carbon capture and storage will amount to at least NOK 600 million (US$110 million).
NOK 150 million (US$27.4 million) will be set aside for a development and demonstration program for offshore wind turbines and other immature energy technologies. The Government has also improved tax conditions for small-scale power plants for which a concession application had been submitted by 5 October 2007.
The funds allocated to the incentive scheme to encourage larger urban areas to improve public transport will be doubled, but this is contingent on binding agreements on measures to reduce road traffic being reached.
The allocations for railway investments will be increased by NOK 250 million (US$45.7 million) next year.
The diesel fuel tax will be increased by NOK 0.10 per liter ($0.07 per gallon US), and the gasoline tax will correspondingly be increased by NOK 0.05 ($0.035 per gallon US). The purpose is to step up efforts to reduce greenhouse gas emissions, and the proposal must be seen in connection with the increased allocation for public transport.
In the 2009 government budget, NOK 50 million (US$9.1 million) will be allocated to Transnova, a pilot project aimed at reducing greenhouse gas emissions from the transport sector through the use of alternative fuels including biofuels and hydrogen.
The government intends to present a separate action plan for switching from fossil fuels to renewable energy sources for heating. Public buildings will be required to have flexible energy systems. Work will be launched to prepare a ban as from 2009 on installing oil-fired heating systems in public buildings and commercial buildings of more than 500 square metres when old oil-fired boilers are replaced or when such buildings undergo major reconstruction that includes their heating systems.
In addition, there are initiatives that have been taken by the Government in parallel with the negotiations as they were in line with proposals made by the three opposition parties. These will involve spending up to NOK 3 billion (US$548 million) each year on reducing CO2 emissions caused by deforestation in developing countries.
The Government will resume negotiations with Sweden on green certificates for renewable energy production. If agreement has not been reached by 1 July 2008, the Government will present a proposal for making adjustments to the arrangement for renewable electricity with a view to facilitating an increase in renewable electricity production to match the increase that would have been achieved under the green certificate scheme.