The Norwegian parliament on Wednesday approved a plan that will see the country take on a target to reduce carbon emissions at least 40% below 1990 levels, pending a bilateral agreement with the EU, and implement a national climate law.
The decision means Norway will go through with its plan to pledge a minimum cut of 40% from 1990 levels in its INDC, which will be submitted to the UN before the end of the month, but make the target dependent on reaching a deal with the EU next year on bilateral cooperation.
“Within the emissions trading sectors Norway will contribute to achieving a 43 percent cut in emissions compared to 2005 within the EU Emissions Trading System,” the bill said.
The country’s power and heavy industrial sectors are already linked to the EU ETS, but Norway’s bilateral negotiation also foresees Norway linking regulation under remaining non-ETS sectors such as transport, agriculture and buildings.
“The target will likely be to cut emissions in the sectors outside the EU ETS with 40 percent by 2030 compared to the 2005 level,” said Stig Schjolset, an Oslo-based analyst with Thomson Reuters Point Carbon.
“Norway will buy a substantial, but not yet defined, amount of CERs to comply with the 2020 target under the Kyoto Protocol, while it will have access to flexible mechanisms at EU level to ensure compliance with the 2030 target,” he said.
EU CARBON TRADE
Under the enhanced EU cooperation, Norway would not be able to use any additional CERs beyond its 2020 requirement to meet its 2030 goal, unless that target was eventually deepened.
But, it would be able to take advantage of the yet-to-be defined ‘flexibility instruments’ agreed by EU leaders last October that allow EU nations to meet their non-ETS targets by investing in emissions reduction initiatives in other member states.
Under the same arrangement, it also would be able to take advantage of a “limited, one-off reduction of ETS allowances” to meet non-ETS goals.
The European Commission is expected later this year to publish legislative proposals to extend beyond 2020 the EU laws governing both ETS and non-ETS targets, which will serve as the basis for Norway’s negotiations on enhanced cooperation using the flexibility mechanisms.
In an article earlier this month Bloomberg News reported Norway might need to buy as much as 195 million tonnes of emission reductions from the EU under the cooperation. Schjolset has said Norway is only likely to require a maximum of 90 million tonnes, and is unlikely to be allowed to import that much under the arrangements.
Norway, whose emissions-intensive fossil fuel industry dominates the economy, saw greenhouse gas output rise 3.7% from 1990 to 2013. The government is a major CER buyer.
CLIMATE LAW
At 3AM, parliament also adopted a proposal requiring the government to set up a committee, which will draft a new climate law that must be adopted before the next general elections, slated for Sep. 2017, MP Rasmus Hansson said on Twitter.
The decision was backed by all parties except the right-wing Progress Party, one of the ruling coalition partners.
The law will make Norway’s emission targets for 2020, 2030 and 2050 legally binding and ensure the government delivers annual progress reports, but a move to include future sector carbon budgets in the legislation was not supported.
“At the moment, Norwegian climate politics and legislation is fragmented and without a firm direction. Despite having set long-term targets, Norwegian CO2 emissions have increased since 1990,” said Ragnhild Elisabeth Waagaard with WWF Norway.
“Within the coming decades, Norway will need to move from its dependence on fossil fuel industry, which has had a big influence on both energy and climate politics.”
“A climate law will give clear national climate goals, a trajectory and a structure to follow up the climate goals. This will be a very helpful tool as Norway transitions into a low carbon society before 2050,” she said.
By Stian Reklev – stian@carbon-pulse.com
