The fossil fuel industry hurts the climate – and the economy. In Norway, environmentalists and labour union activists have formed a new alliance, and published a book on how to wean the country off oil.
Last Friday, the Intergovernmental Panel on Climate Change went public with their Fifth Assessment report in Stockholm. The report supplied us with more reasons to dread the coming effects of global warming, and even more reasons to urge politicians to act.
One of the key new features in the IPCC report is the global accumulative “carbon budget”. The IPCC confirms earlier findings that there is an allowence for less than 1000 gigatons of CO2 in the atmosphere for the rest of the century, if we are to avoid dangerous climate change above two degrees warming. This is less than a third of proven fossil reserves, and will be consumed in less than 30 years at current emission levels.
In neighbouring Norway, often described as a “world-leader in the combat against climate change”, a population of just over 5 million reap the profits in being the world’s second largest gas exporter and the sixth largest oil exporter. The investments in the sector are growing year by year.
Along with the rest of the world, we are debating how to manage a limited resource and how to achieve the necessary emission cuts to avoid disastrous global warming.
Along with the rest of the world, we live in a carbon bubble, in which, despite increasingly urgent warnings from scientists and environmentalists, we keep pumping up fossil fuels at record speed, pushing greener industry aside as we do so. In Norway the fossil fuels industry is by far the country’s largest, and our reliance on this industry is not just a threat to the green industry, but to our entire economy, as has lately been pointed out by various individuals and organizations, including the IMF.
Our goal is not to get rid of the oil industry tomorrow. Nor is it to set a date for when the last oil worker will be out of a job. On the contrary, we want to keep the industry going for generations, but at a significantly lower level than we see today. To achieve this in a way that does not lead to mass unemployment (an estimated 250,000 people – or one in twenty Norwegians – are involved in the fossil fuel industry) we need a plan that combines both environmental policy and the oil workers’ interests. That was the starting point when labour unions and environmental NGOs sat down to draft a plan on how we might realistically deflate Norway’s inflated oil industry in a way that also retains the interests of the industry’s employees.
As the plan was conceived in and for a Norwegian context, a central premise is the suggestion that the government makes use of its position as majority share holder in Statoil, operator on nearly all the Norwegian fossil fuel fields, and pull the company out of its hazardous projects abroad, such as the Canadian tar sands and the scramble for oil and gas in the Arctic. Likewise, the government’s sovereign wealth fund should extract all investments in the fossil fuel industry.
However, some further simple steps we suggest that would start deflating the carbon bubble could be worthy of consideration by other fossil fuel producing nations.
If we are to limit global warming to two degrees Celsius, we have to leave at least two thirds of all proven fossil fuel reserves unburned, according to the International Energy Agency, and now also confirmend by the IPCC. This means, that we must stop looking for more oil, coal and gas, which are by default additional fuels that we cannot afford to burn.
Also, in order to reduce the level of carbon investments, we have to halt plans to develop newly discovered fields. Simultaneously we should assess what fossil fuel fields are most suited for permanent or temporary closure. Cost considerations could play a major role in selecting these.
Areas with unconventional resources are a good place to start; these are often riskier, less cost-effective and more harmful to the climate. Such areas include oil in the Arctic, tar sands in Canada, as well as Swedish company Vattenfall’s planned brown coal (lignite) mines in Germany, to mention a few examples.
If we are to reduce both the levels of investment and fossil fuel extraction, limiting the number of licenses offered to the industry is an effective long-term measure.
Adjusting the tax system for the fossil fuel industry, in order to make fossil fuel exploration and extraction less attractive, is another way to help regulate extraction levels.
Yet another measure is postponing the development of new fields, something that would cause neither an overheated economy, greenhouse gas emissions nor unemployment. Fields from which extraction is considered cost-effective can be postponed for future employment and profit.
One of the reasons why Norway was able to establish a successful oil industry was because the experiences of sailors, shipyard workers and dam construction workers were put to good use on Norwegian oil platforms. Today oil workers and engineers could play a similar role in the readjustment to a sustainable society. But that means we can’t keep directing all the largest investments and the brightest minds toward the fossil fuel industry.
It is vital for both the climate and the industry workers that we start deflating the carbon bubble now. The risk is that this carbon bubble will burst in the near future, and the more we allow the fossil fuel industry to expand, the greater the risk that we are forced to deal with a sudden reduction, with the massive consequences this will have for millions of workers and the economy of any country currently relying on the fossil fuel industry.
On the other hand, if we imagine the climate challenge and the fossil fuel industry workers together, we could secure a limited resource for future generations, ensure predictability and long-term security for today’s fossil fuel industry workers, facilitate the creation of a new green industry, and ensure desperately needed cuts in greenhouse gas emissions.
(The book this article is based on was authored by Helge Ryggvik, professor in economic history at the University of Oslo and long time labor union activist, in collaboration with Gulowsen and an alliance of churches, labour unions and environmental organizations.)