Norway, environmental trailblazer and fossil fuel dinosaur

Norway is an environmental paradox - a global leader on climate change and one of the countries most reliant on oil and gas, a trailblazer and a dinosaur at the same time - and it seems quite well aware of it.

Norway is the world's eighth biggest exporter of oil, and its third biggest exporter of natural gas. In total, hydrocarbons account for as much as 40% of Norwegian exports. Its aging North Sea oil fields require ever more energy to tap depleting reservoirs, making Norway one of the few Western countries to see a rise in domestic carbon emissions in 2015. 

It has handed out exploration permits to 13 oil companies just this year to drill in a new area of the Norwegian Arctic, one of the most expensive and environmentally sensitive places in the world to produce oil. Arctic oil production requires technology that critics claim is not properly tested, and it also requires hefty state subsidies and tax breaks to make it affordable and marketable.

And yet...

Very little of the fossil fuels Norway produces are used at home. It gets almost all its electricity from clean hydropower. In June this year, Norway became one of the first countries to ratify last year's Paris Agreement on climate change, and Norwegian lawmakers forced through a commitment for the country to become completely carbon neutral by 2030 (some 20 years ahead of schedule). It has poured rich subsidies into the electric car market, and 29% of new cars sold in Norway are already electric or hybrid, with a government-mandated target of 100% by 2025. 

It is also one of the most generous donors to international initiatives to maintain rainforests (which help fight climate change by absorbing some of the heat-trapping carbon dioxide released by the burning of fossil fuels). It has already spent $1 billion saving trees in Brazil, and is committed to spend up to $350 million a year preserving trees in places like Indonesia and Guyana.

So, how does Norway reconcile these apparent contradictions?

Critics have accused Norway of environmental hypocrisy and "green-wash", grandstanding overseas with environmental projects while allowing its domestic oil and gas industry to pump ever larger quantities of carbon into the atmosphere. But the Norwegian government cheerfully justifies its policies as a consistent and reasonable use of the same kind of carbon trading that many other countries use in their cap-and-trade programs for carbon reduction. Essentially, it is buying carbon credits in developing countries overseas to allow it to continue polluting at home. As Vidar Helgesen, Norway's climate and energy minister, says: "We want to play a part, whether it is in electrification, bio-energy, hydropower, or any other green energy. But Norway has the cleanest hydrocarbons anywhere in the world. And as long as the world needs oil and gas, we will provide it."

Bold words and, technically, it is not wrong. Plus, it can afford it - over the decades, Norway has used its oil and gas productions to carefully and prudently accumulate the world's largest sovereign wealth fund (an estimated $875 billion).
Whether its policies are within the spirit, as opposed to the letter, of the Paris Agreement is less clear. But perhaps it is a moot point anyway.