Written by Erika Sobelman, ESLLC 2016-2017
Compared to other countries, Norway has been a leader in environmental economics for years after taking various steps committing them to an eco-friendly regiment that has put them at the forefront of sustainable development. To combat pollution, the Norwegian government has introduced various policies that ration the resources of Norway to its citizens while limiting emissions that arise from use. Norway is on the forefront when it comes to combatting climate change as they are involved in vigorous policy where they have committed to “to reduc[ing] global greenhouse gas emissions by the equivalent of 30 percent of 1990 emissions by 2020.”
The Norwegian government has been using a Norwegian carbon credit procurement program since 2007 that helps satisfy the requirements that they promised to uphold at the Kyoto Protocol, which was a treaty signed in 1992 at the United Nations Framework Convention on Climate Change. Norway enacted this program to satisfy the first commitment period from 2008 to 2012. During this period of time, 23 million credits were procured. Norway plans to accomplish their reduction by 30 percent during the second term which is from 2013-2020. Their end goal is to be carbon neutral by 2050.
The deliveries of carbon credits help to distribute carbon where it is needed most and efficiently reduces carbon emissions by helping to transition to a low carbon economy. The opportunity costs of carbon credits are rather obvious as there will be necessary limits on carbon consumption. Work will need to be resourced elsewhere especially in research in alternative energy to help sustain Norwegian life. The capital of Norway, Oslo, incinerates garbage to power the half of the city and they also import waste from neighboring countries since the rubbish produced by their citizens is not enough to completely power the city. This import of trash may be considered an opportunity cost as it likely increases taxes but in the end, Oslo is powered mainly without the use of greenhouse gas producing resources.
Norway is also home to an abundance of natural resources that they could use to power their country, but they have decided to go “green.” This may be considered productive inefficiency but in the long-run should be looked at as efficient. Perhaps not economically, but environmentally as there will be a wealth of natural resources remaining but the effects that those resources may produce will be eliminated when the country uses “clean” energy.
Norway is famous for its incentives when it comes to electric cars. Formerly, value added tax and purchase tax was removed which would otherwise have added approximately 50 percent to the cost of a vehicle. Now, Norwegians buying electric cars must pay half of the taxes after there was a huge increase in sales of electric vehicles. These incentives have allowed Norwegians to convert to cleaner energy sources as shown in their purchases.
The Norwegian Government is by far a leader when it comes to sustainable development and environmental economics as they have gone through combatting climate change and transferring to clean energy rather easily and efficiently. The governments of the world should look to follow the lead of all of Scandinavia, especially with their use of carbon credits and they help to delegate the emissions of carbon where they are needed.