What Norway’s election tells us about change
When it comes to elections across the world, Norway would not be top of the list of countries that South Africans believe they should keep a close eye on. If the average South African were asked to list interesting bits of information about the Scandinavian country of just more than 5-million people, they probably would not think much past oil, fjords and skiing. Its politics would not get a look-in, unlike a big country’s such as the US, whose internal policies have wide effects way beyond its borders.
It is unlikely that many people outside Scandinavia would be able to name the Norwegian prime minister of the past eight years, or which parties emerged victorious in the parliamentary elections held on Monday. Conservative Prime Minister Erna Solberg lost after serving two terms and is most likely to be replaced by Labour Party leader Jonas Gahr Støre, who was in the process of forming a coalition on Tuesday.
The result may not matter for SA but the issue that dominated the campaign is instructive and may go a long way towards explaining why some countries remain competitive in the face of potentially ruinous change.
Norway has done well out of fossil fuels — it has the biggest petroleum industry in Western world, which has turned it into one of the richest places on earth on a per capita basis. The 5million Norwegians have the world’s largest sovereign wealth fund, worth about $1.4-trillion. The next biggest belongs to China, the world’s most populous nation at about 1.4-billion people.
It may therefore seem counterintuitive that the question of further exploration for oil should have been a dominant feature of the election debates. But it was, and got extra momentum with the release in August of the latest report by the Intergovernmental Panel on Climate Change (IPCC), whose findings were described as “code red for humanity” by UN secretary-general António Guterres.
Despite its abundant oil, Norway has hardly sat on its laurels and has been among world leaders in the transition to the use of cleaner energy. It set itself the goal of becoming the first nation to end the sale of petrol and diesel cars by 2025. It exempted electric vehicles from taxes imposed on those relying on fossil fuels, and in 2020 they overtook the sale of cars running on petrol, diesel and hybrid engines.
That is a lesson on where the market is going for SA’s automotive producers and policymakers. The sooner we adapt, the better; otherwise an industry that exports more than 60% of what it produces could be in serious trouble. Norway’s wealth fund has been at the forefront of shunning polluting companies. In 2020, it sold out of Anglo American, which was probably instrumental in spurring the latter to spin off its thermal coal business.
A more complicated issue has been whether to continue exploring for oil and exporting it to other nations — contributing to climate change in that manner rather than through consumption. The problem is that the industry accounts for about half of the country’s revenue.
It is a question that cut across the traditional left-right divides. On the left, the Labour Party was seeking to form a coalition party with the Socialist Left, which favours an end to exploration, a similar stance as that of the Liberals, whom the Conservatives were counting on. As expected, the Greens, who did not do well, advocated an immediate end to oil and gas exploration and an end to all production after 2035.
The results stopped such an outcome and Labour will be able to continue with its gradualist policy towards an industry that employs 7% of the total workforce. Even for wealthy Norway, the issue brings up similar debates about jobs and a just transition for communities. With no suggestion that demand for oil will disappear overnight, the very fact that a serious discussion is being had about stopping supply might surprise outside observers.
For SA, the lesson is simple: change is inevitable and acting fast towards transition is not, as mineral resources & energy minister Gwede Mantashe asserts, “economic suicide”. It is the only viable strategy for survival.
DESPITE ABUNDANT OIL, NORWAY IS AMONG WORLD LEADERS IN THE TRANSITION TO CLEANER ENERGY