Norway is a nation of great beauty, and an interesting governemnt

Norway is a land of beauty, it is blessed with spectacular scenery, and yes, beautiful women.

Norway has a lot going for it, sadly, foolish leadership may be willing  to risk throwing that away by their pursuit of carbon neutrality

Yesterday, Norway’s parliament agreed to cut the country’s net greenhouse gas emissions to zero by 2030.

This comes on the heels of the news that the largest oil producer in the European Economic Area could also be the first country in the world to ban the sale of petrol-fuelled cars.

On Friday, Dagens Naeringsliv, a business newspaper headquartered in Oslo, boasted a front page headline claiming that Norway’s four political parties have agreed to: “Stop sales of diesel and gasoline vehicles in 2025”.

The proposal has yet to be passed into law, and some outlets have reported that right-wing representatives have contested its validity.

As it stands, almost a quarter of the 150,000 cars on Norway’s roads are electric, though the oil and gas industry still accounts for one-fifth of the country’s GDP.

In April, Norway’s Petroleum and Energy Ministry released a report establishing targets for energy policy. Øyvind Korsberg, an MP for the Progress Party, explained:

“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.”

It should be noted that 96% of Norway’s electricity does come from Hydropower, which, if it works great. Norway does have the highest standard of living, but as Heritage reports oil is a BIG reason for that standard

Norway has been a member of NATO since 1949. Voters have twice rejected membership in the European Union, but Norway is a party to a European Free Trade Association agreement. Prime Minister Erna Solberg of the Conservative Party was elected in September 2013 and leads a center-right coalition minority government. Norway is one of the world’s most prosperous countries. Fisheries, metal, and oil are the most important commodities. Norway saves a large portion of its petroleum-sector revenues, including dividends from the partially state-owned Statoil and taxes from oil and gas companies operating in Norway, in its Government Pension Fund–Global, valued at $900 billion.

Norway is one of the world’s least corrupt countries, ranked fifth out of 175 countries in Transparency International’s 2014 Corruption Perceptions Index. Well-established anti-corruption measures reinforce a cultural emphasis on government integrity. The judiciary is independent, and the court system operates fairly at the local and national levels. Private property rights are securely protected, and commercial contracts are reliably enforced.

What will a pursuit of carbon neutrality do to Norway’s economy? It already has high taxes, and oil has kept its budget surpluses up.

The top personal income tax rate is 47.8 percent, and the corporate tax rate is 27 percent. Other taxes include a value-added tax, a tax on net wealth, and environmental taxes. The overall tax burden equals 40.8 percent of GDP. Government spending amounts to 44 percent of total domestic output. Public debt remains around 30 percent of GDP. Large oil revenues have preserved budget surpluses.

It will be interesting to see how Norway goes if it does seek carbon neutrality. As a nation, it already has a large public sector employment, high taxes, and very generous benefits. Here is a short list

If you are unlucky enough to lose your job (and it is difficult to get fired here), the state will pick up the tab. New mothers are entitled to 46 weeks off with full-pay or 56 weeks off with 80% pay, plus time off if their child is sick.

Wages are high in Norway, but outside the oil industry it’s only really noticeable at the lower end. You can expect to earn at least £12-15 an hour for even the most basic work – double the UK’s minimum wage. Although there is no legal minimum wage here, trade unions (of which a high proportion of people are members) negotiate these collective deals. Graduates can find starting salaries of at least NOK 300,000, but as you make your way “up the ladder”, your salary is likely to follow set guidelines. The gap between rich and poor is definitely smaller here.

Norwegians are also blessed with 25 days holiday per year in the vast majority of jobs, not including the 8-12 public holidays. Many take at least three weeks off in July, something which is permitted in many employment contracts. Although it’s a myth that all Norwegians own a summer house, mountain cabin or boat, many can afford at least one foreign holiday a year thanks to the strong currency – earning in the Norwegian krone gives you great purchasing power in Spain, Turkey, and pretty much anywhere else in the Med.

So why can’t other countries copy Norway?

It’s really not as simple as that. For two main reasons.

Firstly, oil. Norway struck it lucky in the late 60s by finding huge reserves of oil under the North Sea. Their decision to funnel the profits into a national investment fund has proved wise, as it’s now one of the biggest investment funds in the world. This gives Norway the financial backing that the rest of Europe lacks.

Secondly, people. Norway’s population is growing rapidly, but it’s still only 5 million. Compare that with 65 million in the UK, 350 million in the USA and even 9.5 million in neighbouring Sweden, and you start to understand that Norway has more money than most, with less people needing a share.

Norway is a fascinating study in economics. A nation of just 5 million, with the proper ethics, and commitment can do things larger nations cannot but all the government spending, and entitlements, which are again, largely tied to profits from oil, are a threat to all of that I would think. Going the route of “carbon neutrality” could begin wrecking the economy and structure Norway has. Buying into the culture climate change, could prove to be a bad pursuit for Norway. Thoughts?

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s