A green shift in the Arctic

Speech given by Vidar Helgesen,  Minister of Climate and Environment, at Artic Frontiers, Tromsø, 26. Januar 2016. (Check against delivery)

Thank you very much for the invitation to speak at this forum which might feature illustrious speakers, but it is an illustrious forum. It is a forum that brings together politics, business and science in dynamic and important ways. And the theme before us today, industry and environment, is indeed a theme that requires science, business and politics to work together.

Science tells us that climate change and environmental degradation is faster and more furious in the Artic than elsewhere on the globe. We also know that the business and technological development and the technological shifts are fast and furious everywhere.

Politics is often furious, but not always fast. But we need politics to lead, we need politics to catch up and we need politics to enable the technological and industrial development to combat climate change.

What happened in Paris last month was also an exciting, innovative and productive meeting of science, business and politics. That interplay paved the way for Paris. It did not happen only in Paris, it happened in the run up to Paris, and it happened on the basis of some developments that have been paving the way.

During the last three years, the growth in global carbon emissions has almost stalled. At the same time the world economy has been growing by three percent a year demonstrating that decoupling of carbon emissions and economic growth is possible.

Another significant development is that the volume of solar energy production is increasing, and the price of solar power is decreasing steeply, making renewable energy much more competitive. A similar evolution is underway for wind.

Investments in renewable energy have exploded. They are soon competitive in many markets to other sources of energy. 

At the same time, droughts, floods and storms has ravaged parts of the globe to an extent that has made most world leaders realize – and populations calling on their leaders to realize -- that unchecked climate change will be detrimental not only to our natural environment, but to our economies and to  security worldwide. 

The ultimate goal of the Paris agreement is to limit global emissions to levels that will hold the increase in global temperature well below 2 degrees Celcius. That is an ambitious target in itself. But Paris went beyond that, seeking to pursue efforts to limit the temperature rise to 1.5 degree. 

This requires no less than a complete transformation of the world's energy systems and a global transition to a low-carbon economy. 

The agreement – and the national objectives that fed into the agreement, will not solve global warming in itself. At best, the current commitments will cut global greenhouse gas emissions by half what is necessary to avoid an increase in temperatures of 2 degrees. But the ambitions in Paris, and the mechanisms put in place to raise ambitions every five years is promising. 

Therefore the agreement is sending a powerful signal to the world that we are increasingly committed to a low carbon future. It is also a signal to financial and energy markets, which could trigger a faster shift toward low-carbon energy sources and energy efficiency. 

What will "A green shift" and stronger climate policies mean for the High North?

And more specific: How will this affect industrial and economic development in the Arctic?

First, all parties to the Paris Agreement now need to focus on implementing current commitments and preparing to scale up commitments going forward. We do not all have the same commitments, but we all go in the same direction. 

This will mean new efforts to curb emissions, through measures such as carbon taxes, new and tighter schemes for cap and trade, stricter regulations and standards, and more investment in renewable energy and low carbon technologies and solutions. 

And we see, low-carbon technologies will evolve faster, lowering their costs, improving their performance and speeding up the transition. 

It is – as I said – already happening fast for solar and wind power, and for battery technology. And if you couple this with digitalization, with robotics, with the internet of things, you can in the coming years see exciting things happen in the way we produce, manage and consume energy. 

The effect of this global development will be the same in the High North as everywhere else: Industries and other economic activity with a high "carbon footprint" will become increasingly less profitable, loosing market shares. Low carbon solutions will benefit in all sectors of the economy. 

And that is why for any country, for any government, innovation and development of low carbon technologies and solutions is critical in order to stay  competitive and build competitiveness for the future.  

If we indeed succeed in pursuing effective climate policies, we'll also see the demand for fossil fuels leveling off, and thereafter enter a decline. Coal will be hardest hit, we are seeing that already, but the demand for oil will also be reduced in the longer term.  

Lower demand will suppress prices, pushing the most expensive production out of the marked. 

Resources such as oil and gas are likely to be important for northern economies also in the forseeable future. But still, the recent fall in oil prices illustrate what many of us have said for many years: There is a risk of being to dependant on individual, natural resources with high production costs. The need for the Norwegian economy, for example, to diversify, the need to build green competitiveness for the future is evermore important.  

So therefore we need to mitigate the risks, not only for climate change, but the risks to our economy. We need to develope industrial projects that will be robust and economically viable even at prices consistent with a two degree scenario and an economy that uses energy and rawmaterials more effectively. 

So, we need to transform our economies. The key challenge to Norway is to transform it in a way that builds profitable, green jobs in profitable green companies exposed to international competition. 

We have a strong industrial heritage to build on --  including in the Artic part of Norway, in the maritime field, in energy, in metals and in materials. And from these areas we draw expertice for development of hydropower, solar- and wind energy, carbon capture and storage, and environmentally friendly vessel technology. 

And while there are many things that causes uncertainty today when it comes to global developments: In Norway we can be certain of one thing. When it comes to future competitiveness, green is blue and blue is green. We are exploring how the ocean can form basis for new businesses with a new bioeconomy. Due to good management, our fish stocks are in a healthy conditions.  An ecology in balance can be a solid basis for jobs, production and export value in the High North far into the future. 

The potential for "blue growth" through sustainable use of our abundant marine resources is of particular importance to the economy of the High North. It is not only food for our stomachs, but it is also food for thought that today the value of a five kilo salmon or cod equals the value of a barrel of oil. 

The ocean is not only a food chamber, it is also the worlds biggest medical kit. The biotechnology of oceans provides us with enormous opportunities, as does industrial opportunies. 

This blue growth must of course take place within sustainable limits. For Norways part we have set ourself high ambitions and we will pursue them in the coming years. 

We have also identified five priority areas where Norway can play a part in developing low-carbon solutions for use in Norway and in other countries. These areas are: renewable energy, development of low-emission industrial technology, carbon capture and storage, environmentally sound shipping and transportation. 

In these areas we are hoping that developments will contribute to the profound transformation that Norway's economy will go through in the coming decades. We will contribute to the building of green competitiveness for Norway. 

To aid us in that effort, we established a two person commission that in October this year will present a proposal for a strategy for Norway's green competitiveness going forward. We have been a winner in so many phases of this country's history. We were a winner in hydropower, a winner in turning hydropower into an industrial adventure, we were a winner in shipping, a winner in oil and gas and industrialization on land. 

We need also to be a winner in the green reindustrialization, and that is the ambition that we are pursuing with energy. 

Thank You!