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Norway Government "Threatened" by CO2 Tax Row

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Ends Environmental Daily
March 19, 1998

Norwegian politicians and civil servants are suggesting that the country's shaky three-party governing coalition is in jeopardy due to differences over climate change policy, as debate within the government sharpens before key legislative proposals on green taxation are made later this month.


Industry minister Lars Sponheim, who is also chairman of the pro-environment Liberal (Venstre) Party, is in favour of tough measures on big industrial energy users. According to widespread reports, he has threatened to resign if his coalition partners fail to support him when the government publishes wide-ranging green tax proposals in conjunction with a White Paper on energy strategy after Kyoto. His departure would almost certainly bring down the government.

Norway's substantial energy intensive industry sector is lobbying hard to avert carbon dioxide (CO2) emissions taxes, which are expected to be a key element in the strategy. At a joint press conference on Tuesday, the Federation of Norwegian Process Industries (PIL) and the National Union of Chemical Industrial Workers (NKIF) warned that CO2 taxes would cut jobs and force Norwegian businesses abroad.

The organisations called for voluntary approaches instead along the lines of a long-standing commitment by the aluminium industry to reduce greenhouse gas emissions by 55% between 1990 and 2005.

Signals from the government are confusing. Quoted in the Norwegian press today, finance minister Gudmund Restad said that all CO2 emissions would be taxed, but that some industries might qualify for "compensation" during a "transition period". Opponents argue that the distinction between "compensation" and "exemption" is fine indeed.

Even Norway's green tax commission, which prepared a 1996 policy paper on which the forthcoming legislative proposals are to be based, appears to be split. In its report, the commission concluded that there was "no reason to recommend the use of policy instruments other than taxes to help reduce CO2 emissions". However, some commission members disassociated themselves from the majority view and said that CO2 taxes should not be imposed on energy intensive industries.

The green tax proposals may also have implications for controversial plans to build two gas-fired power plants, which are opposed by the government but probably supported by a parliamentary majority. Naturkraft, which will run the plants, has suggested that the new taxes under consideration could make the entire project unprofitable.


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FAIR USE NOTICE: This page contains copyrighted material the use of which has not been specifically authorized by the copyright owner. Global Policy Forum distributes this material without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes. We believe this constitutes a fair use of any such copyrighted material as provided for in 17 U.S.C § 107. If you wish to use copyrighted material from this site for purposes of your own that go beyond fair use, you must obtain permission from the copyright owner.