Norwegian Liberal Party MP Ola Elverstuen announced today that Norway’s four leading political parties have agreed on a ban of gasoline-powered cars by 2025. “After 2025 new private cars, buses and light commercial vehicles will be zero-emission vehicles. By 2030, new heavier vans, 75 percent of new long-distance buses, 50 percent of new trucks will be zero emission vehicles.”
Norway already has a good leg up on this transition. Approximately 24% of its cars are electric. Oslo has debated banning cars completely (including e-vehicles) in downtown, while building 35 miles of bike lanes by 2019 to complement its public transport array of buses and trams. The national government has provided incentives for purchasing e-vehicles for several years, including tax exemptions, extra parking, and bus-lane use. Nudging consumers in this climate neutral direction is made easier by Norway’s copious hydroelectric power (96% of its electricity production energy mix, according to IEA). Consequently, the Tesla or Nissan Leaf has been the country’s top selling vehicle.
Nonetheless, today’s announcement has made car manufacturers see green – kroner, that is. Tesla CEO Elon Musk praised it, calling Norway an “amazingly awesome country.”
A common concern of developed and developing countries has been that breaking up the 19th and 20th century association of economic development and fossil fuels will lead to GDP decline. Referred to as “decoupling,” economists have warned that economic growth would decline as climate change policy made carbon more expensive.
But last year the International Energy Agency (IEA) reported that the global economy grew without increasing CO2 emissions — for two years in a row.
Now, new research from the World Resources Institute (WRI) delves more deeply into the country level dynamic. According to WRI, 21 countries have decoupled their economic growth from carbon emissions since 2000. More specifically, GDP has risen in these countries while carbon pollution has declined over the past 15 years, resulting in about a billion tons of lowered emissions.
Countries on the list are mostly EU members who, as parties to the Kyoto Protocol, legally bound themselves to reduce GHG emissions during the first (2008-12) and second (2013-2020) commitment periods. The more well known examples of France, Germany, Sweden, and the UK are complemented by the less obvious contributions of Bulgaria, Czech Republic, Romania, and Slovakia. Non-EU member but Kyoto Protocol signatory Switzerland also makes the list, as do Ukraine and Uzbekistan. Notably, the U.S. figures among these 21 countries who have decoupled economic growth from CO2 emissions — the only major economy not to join the Kyoto Protocol.
The WRI notes that no “single formula, policy or demographic trend” has brought about this GDP-GHG decoupling. Some of these countries have used policies to tax carbon or rapidly scale up renewable energy, while others have experienced shifts in their economies away from emissions-intensive industries. More than 90% reduced the industrial sector share of their economies (which means that there’s potential for “leakage” of these emissions to other developing/industrializing countries not on this list).
For more detailed analysis at the country level, read here.
Saudi Arabia Deputy Crown Prince Mohammed bin Salman announced that the Kingdom has begun planning for the end of oil.
By developing the world’s largest sovereign wealth fund, partially financed by selling shares of Saudi Aramco, the leading global oil producing company.
This sale of shares to private investors via an initial public offering (IPO) could begin in 2017. “IPOing Aramco and transferring its shares to PIF (the existing, relatively small KSA sovereign wealth fund) will technically make investments the source of Saudi government revenue, not oil,” said the KSA prince. The eventual goal is to be big enough to buy some of the world’s largest players in the financial and industrial sectors. It is estimated that the new sovereign wealth fund would be able to buy Apple, Google parent Alphabet, Microsoft, and Berkshire Hathaway – the world’s four largest publicly traded companies. With the fund estimated to be worth $2 trillion down the road (eclipsing those in Norway and Abu Dhabi), KSA predicts that “within 20 years, we will be an economy or state that doesn’t depend mainly on oil.”
Charlie Kronick of Greenpeace UK, sees KSA’s new strategy as a key post-Paris moment. “The image of Saudi Arabia is so inextricably linked to the oil age that this feels a bit like Switzerland quitting the banking sector. The fact that they’re trying to decouple the country’s wealth from oil revenues will be seen by many as yet another sign that the end of the oil age is approaching fast. If the oil titans are looking for an exit strategy, all cannot be well in the fossil fuel sector.”