Norway has ambitious climate targets…

The 2017 Climate Change Act, the 2020 Nationally Determined Contribution (NDC)
under the Paris Agreement and the Climate Action Plan 2021-30 lay out the
framework of Norway’s climate action. Norway also adopted its Climate Adaptation
Strategy 2021. The government provides annual reporting on both mitigation and
adaptation efforts to Parliament.
Norway has raised ambition on legally binding climate targets. Within its NDC 2020,
Norway aims to reduce GHG emissions by at least 50% and towards 55% by 2030
compared to 1990 levels, including through international emissions trading, such as
the EU Emissions Trading System (EU ETS). The 2017 Climate Change Act sets the
long-term target of becoming a low-emission society by 2050. Moreover, in 2016,
Norway’s Parliament pledged to become climate neutral by 2030 (previously 2050).
This means it must offset remaining emissions through emissions trading systems or
international co-operation.
Norway plans to fulfil its climate commitment in close collaboration with the
European Union. Its objectives are aligned with the enhanced ambition of the new
EU-wide 2030 Climate and Energy Framework under the EU Green Deal. Emission
taxation and participation in the EU ETS are the main elements of the government’s
climate policy. The Climate Action Plan outlines economy-wide and sector-specific
measures for reducing emissions, as well as its policy for increasing CO2
sequestration and reducing emissions from forestry and land use. The government
committed to applying the no-debit rule under the EU Regulation on Land, Land-Use
Change and Forestry and intends to enhance climate sinks.

but reducing domestic emissions will be challenging

Norway is a relatively small GHG emitter with absolute emission levels similar to
other Nordic countries. The country has decoupled emissions from gross domestic
product (GDP) growth. In 2020 energy industries, including oil and gas production,
contributed to 30% of the country’s GHG emissions, followed by transport, industry,
agriculture and buildings. After peaking in 2007, domestic GHG emissions have
declined, albeit more consistently in the second half of the 2010s. In 2020, they were
about 10% lower than in 2010, but only about 4% lower than in 1990 (Statistics
Norway, 2021[1]).
The starting point for emission reductions in Norway is low because its energy mix is
already largely decarbonised, leaving few remaining quick wins. The expansion of
offshore oil and gas resources over the past decades also contributed to increasing
GHG emissions. These emissions have been relatively decoupled from production
since 2016. The Norwegian petroleum industry has comparatively high
environmental and climate standards. Many companies operating on the Norwegian
shelf have set net zero targets.
Norway has decoupled greenhouse gas (GHG) emissions from GDP growth. Since 1990,
emission levels have varied between 47.5 million (1992) and 56.9 million tonnes of CO2-
equivalent (CO2-eq) (2007). Norway is expected to emit around 41.2 million tonnes of CO2-
eq annually by 2030, 20% below the 1990 level. These estimates do not include measures
of the Climate Action Plan 2021-30 or the effects of Norway’s participation in the EU
Emissions Trading System (ETS). Outside of agriculture, climate measures are broad-based
and should bring proportionate reductions in all sectors. As a small and open economy,
Norway’s focus on national GHG emissions provides only a partial picture of its global
carbon footprint

Participation in the labour market is high, and there are abundant natural resources, a skilled
workforce and sound state revenues. Norwegian workforce are generally well-qualified and
productive, This is a good starting point for making use of new knowledge and new technology.

Wealth is more equally distributed in Norway than in most other countries. Most people have the
resources and freedom to plan their lives according to their own views and wishes. The low level of
inequality means that people generally trust each other and the public authorities. This makes
cooperation easier, whether in the business sector, in working life or in the public sector. It also
gives individual people a feeling of security and a sense of belonging, and results in social and
political stability. Welfare schemes provide a safety net that reduces risks for the individual, and can
make people more willing to be creative and innovative. This situation is positive both for general
social development and the Norwegian economy, and is a good starting point for the transition to a
low-emission society

One of the main challenges for Norway in the time ahead will be to adjust to a new situation where
it is more similar to Western economies that do not have oil and gas resources. Growth will have to
take place in sectors where there is no economic resource rent. This means that tax revenues will be
lower and companies cannot expect as high a return on their capital as in the petroleum sector.
Fullfilment of the Paris Agreement , may result in lower demand for energy based on fossil sources
and may thus reduce the value of the remaining oil and gas on the Norwegian continental shelf. The
value of Norway’s oil and gas is also affected by many other factors, including energy demand and
the relative costs of developing new energy resources. The transition to a low-emission society will
alter the conditions for business and industry and will require changes in every country, including
Norway. The Norwegian economy and business sector have been through major restructuring
processes before. The industrial structure has changed radically in the past 40–50 years. Changing
economic conditions, including the development of new technology and alterations in demand and
competitive conditions, mean that some companies and industries will grow while others become
less important. Even though many people will continue in their current line of work, some industries
and workplaces will be vulnerable in a global low-emission future. Adaptability will be essential, and
people and groups in some areas of the economy are likely to find that they need different
qualifications or that there are fewer opportunities for employment.