In a significant move, five mayors hailing from industrial municipalities in Norway have voiced their apprehension over the government's plan to slash the CO2 compensation scheme in the upcoming 2024 state budget. The mayors argue that this move could be detrimental to both the country's industrial and climate policies.
The Crucial Role of the CO2 Compensation Scheme
The CO2 compensation scheme, a brainchild of the Stoltenberg government introduced in 2012, has played a pivotal role in maintaining competitive power prices for the Norwegian industry, which predominantly relies on renewable energy sources. The scheme was designed to counterbalance the fact that Norway incorporates European CO2 prices into its power prices via interconnected power supplies with Europe.
Implications of Cutting the CO2 Compensation Scheme
A reduction in the scheme is feared to negatively impact investments and industrial jobs. The mayors are advocating for the government and the Labour Party to revert to an industrial policy that is familiar and sustainable. They point out a stark contrast with other European nations like Germany and France, which are fortifying their CO2 compensation schemes while Norway contemplates cuts.
Norway's Industry and Emission Reduction Efforts
The industry in Norway has been a pioneer in terms of reducing emissions, achieving a 40% reduction compared to the levels in 1990. This significant feat was partly accomplished due to the EU's quota system. However, the proposed slashes to the CO2 compensation scheme could destabilize the equilibrium between climate action and job preservation in the industry.
Mayors Propose a Solution
The mayors underscore the necessity for a solution that protects the climate while fostering an environment conducive to investment and job creation in the industry. They propose a solution that not only reinstates an effective CO2 compensation scheme but also allocates funds specifically for climate and energy measures in companies that receive support.