Nor­way blazes trail by pulling huge sovereign fund out of coal

The China Post - - INTERNATIONAL -

Nor­way’s par­lia­ment voted Fri­day to pull its sovereign wealth fund — the world’s big­gest — out of coal, in what is seen as a ma­jor victory for en­vi­ron­men­tal­ists.

The par­lia­ment voted unan­i­mously that the fund — worth al­most 7,000 bil­lion kro­ner ($890 bil­lion) — must sell its hold­ings in min­ing and power com­pa­nies that gen­er­ate more than 30 per­cent of their out­put or rev­enue from coal.

The de­ci­sion is ex­pected to af­fect be­tween 50 and 75 in­ter­na­tional com­pa­nies, rep­re­sent­ing hold­ings of 35 to 40 bil­lion kro­ner, ac­cord­ing to fi­nance min­istry cal­cu­la­tions.

How­ever, en­vi­ron­men­tal­ists say the ef­fects could be even more wide-reach­ing, with some es­ti­mates talk­ing of 122 com­pa­nies rep­re­sent­ing 67.2 bil­lion kro­ner.

The stakes will have to be sold by Jan­uary 1, 2016. The names of the com­pa­nies af­fected have not been dis­closed. The fund has shares in more than 9,000 com­pa­nies over­all.

Ac­cord­ing to a study done by a coali­tion of non-gov­ern­men­tal or­ga­ni­za­tions, the mea­sure will af­fect 35 U.S. com­pa­nies, a dozen Chi­nese com­pa­nies, eight from Ja­pan, Ger­man en­ergy gi­ants EON and RWE, the UK’s SSE, In­dia’s Re­liance Power, Italy’s Enel, Spain’s En­desa, Por­tu­gal’s EDP, South Africa’s Sa­sol, South Korea’s Korea Elec­tric Power, Swe­den’s Vat­ten­fall and Den­mark’s Dong.

Given the size of the Nor­we­gian fund, the step is seen a ma­jor victory for the in­ter­na­tional cam­paign to end the use of highly-pol­lut­ing coal, six months ahead of an in­ter­na­tional cli­mate con­fer­ence to be held in Paris in De­cem­ber.

“This could in­flu­ence the way other big in­vestors view coal as an in­vest­ment,” said Mar­i­anne Marthin­sen, an op­po­si­tion Labour mem­ber of par­lia­ment.

“The rest of the world is tak­ing note of this de­ci­sion.”

Nor­we­gian MPs also pointed out that their de­ci­sion was not just a re­sponse to cli­mate change, but also based on fi­nan­cial considerations: coal as­sets are bound to plunge as cli­mate change ef­forts in­creas­ingly call for coal use to be re­duced.

Coal’s Days Num­bered?

For Truls Gu­lowsen, the head of Green­peace Nor­way, the par­lia­ment’s de­ci­sion will “most likely” be fol­lowed by oth­ers.

The Church of Eng­land, fi­nan­cial groups like French in­sur­ance com­pany Axa, and Ox­ford and Stan­ford uni­ver­si­ties have also re­cently an­nounced plans to ei­ther di­vest from coal or re­duce their hold­ings.

“Coal has al­ways posed a prob­lem from a moral point of view be­cause of its ef­fects on the cli­mate. Now, even its prof­itabil­ity is un­der pres­sure,” Gu­lowsen told AFP.

“I think and I hope that coal’s days are num­bered.”

Coal gi­ants An­glo Amer­i­can, BHP Bil­li­ton and Glen­core will how­ever not be af­fected by the Nor­we­gian de­ci­sion, be­cause their other min­ing ac­tiv­i­ties are so mas­sive that their coal busi­nesses rep­re­sent less than 30 per­cent of their over­all rev­enues.

“Col­lec­tively, the big three pro­duced 364 mil­lion tonnes of coal last year, and when burned, this coal gen­er­ates CO2 emis­sions that are over 16 times as high as Nor­way’s to­tal an­nual green­house gas emis­sions,” lamented Heffa Schueck­ing of the Ger­man NGO Urge­wald.

Some peo­ple in Nor­way have called for par­lia­ment to go fur­ther and with­draw the sovereign wealth fund — which is fu­elled by Nor­way’s state oil rev­enues — from all fos­sil fu­els and in­vest more in re­new­able en­er­gies.

The fund has al­ready in re­cent years sold off stakes in dozens of com­pa­nies in­volved in coal min­ing, oil sands, and ce­ment pro­duc­tion, judg­ing that their fi­nan­cial model was un­ten­able be­cause of the en­vi­ron­men­tal im­pact.

In a para­dox­i­cal de­ci­sion linked to geopo­lit­i­cal considerations, Nor­way’s gov­ern­ment re­cently agreed to res­cue the min­ing com­pany Store Norske, which ex­tracts coal in the pris­tine Sval­bard ar­chi­pel­ago in the Arc­tic, with a cap­i­tal in­jec­tion of 500 mil­lion kro­ner.

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