Viking Economics (24 page)

I asked Truls what he thought about Norway’s growth in this global game of oil production. He told me with a rueful smile that he found it alarming and wrongheaded. He went on to describe the Arctic situation, which is even more problematic than conditions in the North Sea. While it is
legal
for Norway to drill in the Arctic, the consequences would be terrible if an accident happened, given how fragile the ecology is and how tough it would be to clean up a spill.

Truls told me he was part of the crew on a Greenpeace ship that sailed close enough to a Norwegian drilling rig in the Arctic to hinder the drilling. He acknowledged that the Greenpeace crew was taking a risk, but said its mission is to create enough drama so people will take a fresh look at the situation. “We understand we may be arrested for that, but we need to take strong nonviolent action to make the point,” he said.

Few would say that Norway’s oil drilling has been irresponsible. The earlier finds of oil and natural gas were in the North Sea, which is extremely deep and also does not have a robust ecosystem. The Norwegian firm Statoil therefore invested in an additional fall-back safety mechanism on its oil rigs which, had BP done the same
on its rigs in the United States, might have prevented the disaster in the Gulf of Mexico.

In the hearings in the United States after that BP spill, the corporation revealed that it had decided against installing an additional fall-back safety mechanism in order to save money. Statoil, by contrast, is largely owned by a democratic and accountable government, so cutting corners on safety and environmental impact is not an acceptable option.

Still, Truls believes that the bottom line belongs to nature. Climate scientists have determined that the amount of oil and natural gas reserves that have
already
been identified by Norwegians and others will, if burned, take humankind over the brink.

Norway’s most widely known literary writer, Karl Ove Knausgaard, helped to lead a resurgent effort in 2015 to end Arctic drilling. Knausgaard calls the drilling “shortsighted and stupid.”
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Anyone might ask why hardworking and productive Norwegians should still support further oil exploration if no one wants the climate outcome that will result?

Norwegians were among the first in the world to raise the alarm about climate change. Gro Brundtland, the doctor twice elected prime minister in the 1980s, whom Norwegians called “mother,” pushed the United Nations to take climate change seriously. She led the UN’s Brundtland Commission and laid the groundwork for the Kyoto conference.
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Through visionaries like her, Norwegian political culture became so sensitive to environmental issues that a government actually
fell in 2000 over the question of whether additional energy should be generated by waterfalls or natural gas.

After Norwegians’ head start, it’s easy to see how environmentalists might now feel disappointed. I sought out a professor of environmental policy in her office at the University of Oslo. Karen O’Brien started studying climate change twenty-five years ago as a graduate student at the University of Wisconsin. She believes that Norway is not giving the exemplary leadership to the world that we might expect, given its legacy. “I see Swedes and Danes moving ahead of Norway in recycling, subsidizing public transport, promoting bicycling, and setting ambitious goals for reducing carbon emissions,” she told me.

Thinking about the small population of Norway, living amidst mountains, I asked her how worried Norwegians really are about the impact of climate change at home. Professor O’Brien said that Norwegian leaders underestimate the impact within Norway itself, and therefore implement halfhearted policies and operate internationally in a “fix-it” mode that plays on their image as do-gooders and peacemakers.

An example of global “fixing” is Norway’s $1.5 billion rainforest fund. Knowing that some countries in the developing world are financially pressured to destroy their forests for profit, Norway gives grants to governments to set aside vast tracts of forest as national parks.
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In 2011, the Ministry set goals to exceed its Kyoto commitment by 10 percent in the first period and to cut emissions in 2020 to only 30 percent of Norway’s 1990-level emissions. Its carbonneutrality goal is 2050. Norway is not currently on track to achieve that goal, but in 2013, carbon emissions dropped to their lowest level since 1995.

Norway’s largest private pension fund, KLP, divested from coal in 2014. In the same year, its public Government Pension Fund Global (GPFG) divested from fifty-two coal companies, including the two primary U.S. mountaintop-removal companies in Appalachia, reducing its coal company holdings by one-third. Truls Gulowsen immediately criticized the GPFG for not dropping coal completely. Norway’s largest environmental organization, Future in Our Hands, agreed. Arild Hermstad said, “The GPFG’s coal investments are tiny in relationship to its total holdings, but the problems they cause around the world are huge.”
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In May 2015, the Storting decided to divest all the fund’s holdings in coal, making it the largest fund ever to make a fossil fuel divestment.
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Considering the activist role that Sweden has played in the UN, it’s not surprising that the Swedish pension fund AP4 catalyzed the portfolio decarbonization coalition through the UN’s environmental program. By 2015, the coalition had gathered large institutional investors with over $600 billion of assets to commit to substantial divestment of their carbon assets. To set a strong example, the pension fund began to reduce its U.S. carbon assets by 50 to 80 percent in the short run, aiming toward 100 percent as soon as possible.
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Sweden has also been paying attention to grassroots-level cuts in carbon emissions. It has been choosing sites as laboratories; for example, the city of Kalmar, population 60,000, has its own carbonneutrality goal with national experts helping it out.
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A larger urban laboratory is in Sweden’s capital city of Stockholm: the Hammarby Sjøstad waterfront district. The neighborhood uses biogas derived from wastewater to run kitchen stoves in 1,000 residences and has enough left over to help fuel public transportation. The district’s full, integrated model is expected to be completed by 2016, but has already in 2007 won the World Clean Energy Award for innovative, practical projects that move renewable energy into the mainstream.

Swedish spokesperson Josefin Wangel commented about their work, “Most of the technical solutions aren’t that hi-tech or sci-fi or special. What is special is the overall eco-model approach.”
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Sweden, Denmark, and Norway were early adopters of carbon taxes in 1991; Iceland followed in 2009. Norway had some of the highest carbon taxes in the world, which raised the cost of energy production significantly. That made carbon capture economically feasible, at least in principle.

In May 2012, Norway inaugurated a facility that tests carbon capture and sequestration technologies. Skeptics claim such technology is impossible. Norway has invested more than $1 billion in the “impossible technology,” however, and claims that it is on the verge of becoming viable. If the Norwegian plant proves successful, the technology could be used around the world, further benefiting Norway’s economy.

In the meantime, its Environmental Ministry became dissatisfied with the results of its carbon tax, calculating that the years between 1991 and 1999 show a carbon-emissions drop of only 2.3 percent. Norwegians often call themselves stubborn, and their next step reinforced that image in my mind. In 2012, they decided to go for a critical impact, and doubled down on their carbon taxes.

One hot-button issue in Norway’s oil extraction has been Statoil’s decision to invest in the Canadian tar sands, which produce far more emissions in the extraction process than Norway’s own North Sea oil. Environmental groups bitterly fought the decision. Despite the pressure, the government refused to dictate Statoil’s investments. Greenpeace went to the Statoil shareholders’ meeting and directly urged divesting from tar sands. In 2012, Statoil increased its production from tar sands by 60 percent.

More Norwegians joined the fight against tar-sands investment. In 2013, Norway’s second largest insurance company,
Storebrand
, voted to exclude thirteen coal and six tar-sands companies from their investments. The reasons they gave were not just mitigation of environmental damage, but hard-headed financial priorities as well. Storebrand’s head of sustainable investments explained, “If global ambitions to limit global warming to less than 2 degrees Celsius become a reality, many fossil fuel resources will become unburnable and their financial value will be dramatically reduced.”

Finally, in 2014, Statoil pulled out.
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Then in February 2015, the 800-pound gorilla spoke: the largest sovereign wealth fund in the world, Norway’s pension fund (GPFG), announced that it had dropped its tar-sands investments because of both carbon emissions and destruction of water. The fund also divested palm oil and other climate change–related holdings, a total of 114 corporations. The practical Norwegians acknowledged in their statement that most fossil-fuel reserves must be left in the ground anyway, which from an investment point of view means stranded assets.
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Because the small population of Norway is widely scattered across an area the size of Great Britain, transportation poses a continuing difficulty in reducing emissions. One useful tool has been the policy of maintaining the highest car taxes in Europe—an SUV in Norway costs four times what it costs in the United States.

Another step is to encourage the use of electric and hybrid vehicles. Very high taxes on gas are helpful, and so is developing the infrastructure to support electric cars, trucks, and buses. Norwegians plan to put battery-charging stands around the country; electric cars will be charged in twenty minutes instead of seven hours.

More plug-ins require more electricity, but increasing the use of water power is opposed by Norwegians who defend their pristine mountains and waterways. That tension in turn puts more pressure on wind power to step into the gap.

People who own fully electric cars in Norway get free public parking and are allowed to use bus and taxi lanes. They don’t need to pay tolls. They are exempt from sales tax, taxation as company cars, the annual road tax, and non-recurring vehicle fees.
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While reducing the carbon impact of cars, Norway continues its fundamental reliance on public transportation. The 1999 ban on sprawl, including large shopping malls outside city centers, helps.

Within the framework of that national law, most land-use decisions are made on the level of the municipal government, whether that government is in a city as large as Oslo or in a small
village. The decision-making is democratic rather than largely influenced by corporate interests, another power question that was settled by the outcome of the class struggle in the 1920s and ’30s.

Land use and public transportation are two more energy-efficient ways that Norwegians express the values of both equality and freedom. Placing stores in centers of population density means more people have a chance to shop near their homes. More gain the freedom not to own a car. Norwegians also have many places to hike, ski, and enjoy other aspects of nature. Their individual freedom is enhanced at the same time, as nature itself is preserved through reduction of harmful pollutants.

Land-use and public-transportation policies support strong communities and also, for individuals, better health by increasing exercise and encouraging less time in cars eating fast food. Vital communities and better health reduce health-care costs for Norway as a whole, an economic matter of some consequence, as in any society.

Of course, equality and freedom are not the only values that the Nordics hold dear. The descendants of the Vikings do care about community, solidarity, and nature for their own sake. These countries demonstrate is that, when democracy is securely in place, it becomes possible to create an economic design that supports all five of those values while moving toward a sustainable energy future.

In each of the countries, the debate continues: are we moving toward sustainability fast enough?

On returning home from research trips to the Nordic countries, I have given lectures to diverse groups, including hip urban young adults, suburban soccer moms, retirement communities, and even a small-town Rotary Club and a college faculty.

Listeners peppered me with questions and challenges about the Nordic model’s relevance to the United States. Many emphasized ways that the Nordics are different from the United States, like small size, homogeneity, culture. Other listeners wondered whether Americans could mobilize enough power to make changes as significant as those that the Nordics achieved.

In this chapter, I’ll share my responses to the most frequent questions.

I agree that our country is unique, with its own history and mix of traditions. I also agree that no system offers a blueprint for others
to copy. As we learn from the best practices of others, we still need to craft our version.

It is possible, however, to exaggerate cultural barriers to innovation. Consider some of the successes other countries have sometimes had in borrowing from us. Ken Burns described on PBS one of the standouts: national parks on a grand scale were invented in the United States and then picked up by
two hundred
other countries.
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The United States pioneered voluntary service abroad, leading to its best-known example, the Peace Corps.
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A number of other countries borrowed the idea.