Will Norway’s oil fund ban fossil fuel?
Keep Updated with the Latest News and Feeds, Follow Us on Facebook
The two governing parties of Norway have agreed to set up an expert group to investigate whether the oil fund should ban on investments in fossil fuels last month.
The oil fund has already banned tobacco since 2005. The debate about banning fossil fuels was started by the opposition Labor Party in November 2013, proposing that the oil fund should exit all its coal investments. The setting up of the expert group is supported by Christian Democrats (KrF) and Liberals (Venstre), allies of the governing coalition.
According tothe analysis published in the Financial Times, investors will face a difficult choice between to “follow” and “not to follow”. There have been investors taking actions before GPFG. Storebrand, one of the largest investors operating in Norway and Sweden, has excluded ten new coal companies from its portfolio this year. If the GPFG implements the divestment, it is sending message to the world that investing in fossil fuels are facing high risk, which is supporting the theory of carbon bubble. A carbon bubble means that the true costs of carbon dioxide in climate change is not taken into account in a company’s stock market valuation. When the day that people in the world decide to take action to stop consuming carbon reserves, the value of the related assets is going to decline and the bubble will blow out. The financial risk is probably an important reason that experts will back up the divestment of fossil fuel investment.
Nonetheless, Svein Flåtten, spokesman from the Conservative party, told the Financial Times that the expert group may recommend maintaining the status quo.“The expert group shall consider whether the best strategy to address climate questions, as an owner of fossil-fuel related investments, is to make influence through ownership – as we do in many companies now – or by finding responsible criteria for exclusions.”
Disregarding the final decision of the expert group, environmentalists are already cheering for the proposal of divestment. However, some are more critical. Peter Mc Cartney, an environmental journalist, questions if it is hypocrisy. He writes in Epoch Times, “Norway’s financial behemoth of an investment fund is entirely funded by profits from state-run Statoil, after all. Its export of oil and gas resources accounts for 500 million tonnes of emissions each year. Taking its vast oil wealth out of fossil fuel companies does raise some concerns about a national greenwashing.”
A report from the expert group will be given in a year.
Norway’s oil fund, The Government Pension Fund Gloabal (GPFG), is the biggest sovereign wealth fund in the world. The oil fund’s fossil fuel shares takes over 8.4 per cent of its whole assets, around $44 billion, according to the annual report.
Norway’s Prostitution Law Dilemma after Amnesty International’s Decision
Stephen Colbert Invites Everyone to Invade Norway
More Young Drinkers on West Oslo, More Alcohol Problem on East
Norway is One of the Poorest in Finishing High School