Opening speech at conference on sustainable growth

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Energy Secretary Rudd, Ambassadors, Ladies and Gentlemen,

The English language has five times as many words as Norwegian, I am told. Nevertheless you have added some Norwegian words to your already rich vocabulary – the words ombudsman, fjord and skiing are examples that spring to mind. We also gave you the words Tuesday, Wednesday, Thursday and Friday – named after the Norse gods. Today, I would like to offer you another Norwegian word that could be useful in English: dugnad.

Not easily translated, we use the word dugnad when people agree that there’s a job to be done, and that it can best be done through joint effort. Everyone is expected to pitch in, no one is paid for their contribution and no one can pay their way out of it, but in the end, everyone benefits.

The dugnad is a strong tradition in local communities across my country. But the concept can also be applied to national, or even global, priorities and should, I believe, be applied to one of the urgent tasks ahead of us today – that of bringing about a green transition in the face of climate change. This means transforming our societies into climate neutral societies by 2050.  We need a true dugnad, with the participation of everyone – from individual to global level – if we are to succeed in this. 

The active participation of business and industry will be crucial. I am sure my British counterpart David Cameron agrees, since he has appointed a former businesswoman and investment banker as Secretary of State for Energy and Climate Change.

The ongoing global climate negotiations are of crucial importance, and achieving a strong, binding climate agreement in Paris in December is a top priority for my Government. Research and innovation is another key area. In addition, the active engagement of civil society and consumers will be vital for making the green transition. No approach on its own, however, will be enough to reach our goals.

So, how do we strike the right balance between the various approaches needed for this complex task? 

A guiding principle for my Government is to seek cost-effective solutions. We have more faith in the role of businesses and markets as drivers of change, than in extensive regulation and government intervention.

That is not to say that industry and business will be left to solve the problems. The Government should, and will, be a partner and active facilitator. But, as with a traditional dugnad, we all have different roles to play. In our view, the main role of the Government in the green transition is to ensure a predictable framework and a level playing field for innovation, industry and enterprise. And, most importantly, to provide clear direction.

The main instruments of Norwegian climate policy are green taxes and our participation in the EU emissions trading system. Norway introduced a carbon tax back in 1991, and as of now more than 80 per cent of our emissions are either in the ETS sector or subject to the carbon tax. This policy puts a price on carbon, which in turn affects the demand and supply for goods and services, and encourages the development of climate-friendly technology.

Environmental taxes are a cost-effective environmental policy instrument. A green tax shift means that taxes on environmentally harmful activities are increased.

To address this issue, my Government last year established a new Green Tax Commission. The Commission is to make proposals regarding how environmental taxes can be designed to improve the use of instruments in the climate, energy and environmental fields and provide additional incentives to engage in environmentally friendly practices.  

In addition to general policies, we also focus on some specific areas, where we have introduced incentives. I would like to highlight the massive growth in the market for electric cars in Norway, thanks to government incentives. The number of electric cars on the roads in Norway has made us an important testing ground for the car industry. The incentives have not only lowered emissions in Norway; they can also be seen as a contribution to the global dugnad to bring about a green transition in transport.

In general, our position on the green transition is one of optimism: we believe it will give opportunities for economic growth, better productivity, healthier towns and cities, and the development of a low-emission economy.

Our starting point may seem ideal. We are Europe’s largest producer of hydropower. We are very close to achieving our goal of a 67.5 per cent share of renewables in our energy mix by 2020. And we have cutting-edge technology and leading expertise in several areas that are key to the green transition.

However, the Norwegian economy also faces challenges. Reduced activity in the petroleum sector has resulted in a greater increase in unemployment than we anticipated, especially in southern and western parts of the country. The key challenge for Norway is to create new, profitable jobs in the private sector, which are open to international competition.  

A major topic for debate is how we can best use our experience, skills and knowledge from fields such as marine management, the maritime industry and offshore oil and gas in making the green transition. Let me underline that Norway will continue to be a stable and reliable supplier of gas to European markets, including the United Kingdom, for many years to come. But, like you, we also need to diversify and plan for the long term.

Norway has a relatively flat business structure, with a high level of participation by the various actors. This gives us a competitive edge in an environment where innovation is a top priority. Our research institutions, industries and suppliers work together to develop new technologies, methods and solutions. There is a close and dynamic relationship between the private sector, the Government, research institutions, investors and civil society. This has proven fruitful, particularly in times of transition. The Government provides funding for research and innovation programmes in support of the green transition.

The public enterprise Enova plays a key role in supporting innovation for the green transition. Enova supports initiatives to make energy consumption and production more sustainable, and to develop energy and climate technology for the future. It has funded a number of visionary projects that may also have benefits outside Norway. My Government will continue to increase its funding for the simple reason that we want even more green innovation.

Our domestic market is relatively small, and so Norwegian companies often need to team up with companies from other countries to commercialise new technologies, products and services. The Norwegian–British cooperation on offshore wind projects is a good example of how partnerships like this can benefit all those involved.  As mentioned, we already have a high share of renewable energy in our energy mix. This means it is difficult to provide cost-effective incentives to develop offshore wind in Norway. The UK is spearheading this development – in partnership with leading Norwegian companies, among others. This partnership means that we can offer top-notch expertise from our offshore operations, and we can gain experience from large-scale projects that would be a lot more costly in our own country. Over time, I believe successful projects like these will help bring down the costs of offshore wind parks in both our countries, and indeed, in many others.

It would be remiss of me not to also mention the subsea power cable that will be built between Norway and the UK over the next few years. This is another project of great benefit to both our countries – in support of the green transition.

Norway needs to pay special attention to European policy development. It is vital for us to be an active partner of the EU, through the European Economic Area (EEA) Agreement and by taking part in important schemes such as the Emissions Trading Scheme. This also helps to secure a level playing field for our industry.

Norway, like the EU, has committed to a target of reducing greenhouse gas emissions by at least 40 per cent by 2030, compared to 1990 levels. Our aim is to participate in the collective delivery of this commitment, together with the EU.

As mentioned, Norway has had a carbon tax in place for a long time. This has not slowed down industrial development. Rather, it has encouraged innovation and the development of solutions that reduce emissions and bring down operating costs.

On a global level, if there was ever a time when we should put a price on carbon emissions and phase out fossil fuel subsidies, it is now.

Nationally, we have identified a number of areas that will receive special attention in our climate policy in the years ahead. These areas include:

- developing low-emission industrial technologies;

- promoting renewable energy;

- carbon capture and storage;

- green shipping and green transport.

Let me briefly return to the concept of ‘dugnad’. I have presented a few of the tools and contributions my Government brings to its joint effort with industry and innovators. My meetings with business leaders on my travels in Norway have made me optimistic. Companies are grasping the new opportunities. And the green transition is no longer just being discussed around kitchen tables, it is also a topic for boardroom decision-makers.

It is only by joining forces that we will succeed in meeting our common goals. We are moving from visions to action, but we need to move more quickly. Our job is to provide a predictable framework for business and to ensure sustainable development. Investment decisions can only be made by companies themselves. So roll up your sleeves and join the ‘dugnad’. It will benefit us all.

Thank you.