Magne Mogstad, a renowned economics professor at the University of Chicago, has issued a stark warning to Norwegian politicians about the potential misuse of taxpayer money on green subsidies for new industrial ventures.
“No technology of great significance will be developed in Norway,” Mogstad stated in a recent interview with NRK. He argues that Norway lacks the necessary expertise and large enough professional environments to foster major technological innovations, suggesting that such breakthroughs are more likely to occur in countries like the United States and China.
Mogstad, at just 43 years old, is considered one of Norway’s most internationally recognized economists. His critique comes at a time when Norwegian politicians have been increasingly willing to sponsor the green transition with public funds. Billions of kroner have been earmarked for projects such as offshore wind farms, battery factories, and industrial decarbonization efforts.
The economist is particularly critical of the government’s attempts to pick winning industries, citing the example of battery production subsidies. “The idea that the Minister of Trade and Industry should decide that batteries are something we should focus on and provide extra support for is completely crazy,” Mogstad remarked.
He also expressed skepticism about the massive investment in offshore wind, which he believes will be extremely expensive. Mogstad suggests that purchasing emission quotas abroad would provide a much greater environmental impact per krone spent.
Furthermore, Mogstad criticizes what he calls a “rent-seeking mentality” in Norwegian business, particularly targeting the country’s largest business organization, NHO, for actively seeking state support for its members.
In response to these criticisms, Minister of Trade and Industry Cecilie Myrseth defended the government’s approach, stating that Norway has “fantastic environments” that excel in technology development.
As the debate continues, Mogstad’s warnings raise important questions about the efficacy and cost-effectiveness of Norway’s green transition strategies.
