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Norway acts as others drag feet on carbon emissions

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Issue date: 
May 13, 2012
Publisher Name: 
The National
April Yee
Author e-Mail: 
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Advocates of burying the world's carbon emissions underground have long pushed for a global price on greenhouse gases.

But their goal appears ever more elusive as nations fail year after year to agree on putting a price to carbon worldwide.

So now the industry is going for the next best thing - single-country carbon prices. Moves such as those by Norway, which has slapped a US$40 (Dh146.91) per tonne tax on carbon emissions and is considering raising it to $70, have helped to spur carbon-burial projects while the wait drags on for a global carbon-trading scheme.

"There's been a lot of disappointment. We have not seen the … global agreements forthcoming," said Bjørn-Erik Haugan, the chief executive of Gassnova, the Norway government's carbon-capture enterprise.

"So that's not happening. The encouraging news is that there are a lot of local and regional initiatives that provide the same type of incentives … So while we're waiting on the ultimate carbon price, we can still move ahead at a fast pace."

The industry is banking on country-specific conditions, such as a need for carbon dioxide for oil recovery in the United States or government support in China, to drive projects and technology innovation in the years ahead.

The idea of going solo when it comes to the quest to bury carbon emissions underground reflects a growing sentiment among nations that they are alone when it comes to the fight against global warming.

Twenty years ago, nations met in Rio de Janeiro to lay the foundations for the Kyoto Protocol, the binding treaty that 37 developed and emerging countries would eventually sign to cut down on emissions. The treaty embodied a philosophy that the fight against global warming - and the tools to combat it from solar panels to CCS the capturing and storing of carbon - could be fought together.

Since then, Canada has withdrawn from Kyoto, while major polluters such as the US, China and India, have never signed it, and the treaty's expiry date is nearing at the end of this year. There is no immediate replacement.

Next month the Rio participants meet again but hopes for progress on international cooperation on sustainability are slim.

In response, nations from the UAE to South Korea have embraced a philosophy called "nationally appropriate mitigation action", in which each country acts alone.

While such independent action has enabled the creation of ambitious targets, such as the European Union's goal to cut its emissions by 20 per cent by 2020, it has not always translated into concrete results. Because of oversupply fears and pessimism about the economy, the price of European carbon credits has dropped to €3.6 (Dh17.07) a tonne from €13.69 a year ago.

A price of nearly $100 a tonne is needed to make projects economical, say experts.

"A single country or a single company cannot carry forward these changes on its own," Jens Stoltenberg, the Norwegian prime minister, cautioned at the opening of a carbon-capture test centre in Norway last week.

Even in Abu Dhabi, which laid out ambitious plans for a UAE-wide carbon-capture network from industrial sites to ageing fields where the gas would be needed to coax oil from the ground, only one connection within the proposed network has seen progress, although others remain in the pipeline.

The uncertainty about the future of a carbon price is somewhat like that of oil exploration and has not dissuaded Norway's Statoil from pursuing carbon burial, said Helge Lund, the chief executive.

"If you anticipate by moving forward that the C02 price will rise over time, there is actually value protection," said Mr Lund. "I think I can put the case to the shareholders because, as in other areas of the industry, you need to sometimes invest in something that is uncertain."



Extpub | by Dr. Radut