The Socialist Left and the Green Party in Norway are browbeating the country’s massive wealth fund into divesting billions of dollars of coal assets — and the fund is likely to face other bans in the future on fossil fuels and oil investments.
“We’re not finished, it’s not ‘job done,’” Torstein Tvedt Solberg, who represents Labor on the Finance Committee, said during an interview about the need to impose more rules on the wealth fund. “We see that there are weaknesses and a potential for improvement. Our ambition is to get the fund out of coal, which means we must close all loopholes.”
Tvedt Solberg, the Greens, the Socialist Left, the Liberals and the Christian Democrats are pushing the $850 billion fund to jettison assets of companies that base more than 30 percent of their revenues on thermal coal. These political groups also want to widen the ban to include oil sands and coal transportation.
The country’s largest wealth fund has already drained investments from more than 50 companies after the Norwegian government implemented the new criteria. When the criteria were first created, the fund claimed it would need to divest more than 120 companies valued at $8 billion.
New rules could force the fund to get rid of assets from the world’s largest thermal coal producers, Glencore Plc and BHP Billiton. The fund, at the time of the original rules, refrained from divesting from the two companies because 70 percent of their business came from activities outside coal production.
Norway’s new rules could eat into the efficacy of the country’s claim to be Europe’s largest oil and gas producer. The country will need to be both a primary producer of green energy and oil.
The Green Party is at ease with the contradictions, and perceive them as a helpful tool to further its agenda of peeling back Norway’s reliance on fossil fuels.
“Parliament has set off on a slippery slope and there’s no way back,” Rasmus Hansson, the Greens’ only parliamentarian, told reporters. “There’s no longer any logic in saying yes to some carbon and no to other carbon.”
Analysts claim the closure of coalmines in the U.S. may actually present a significant environmental challenge for many coal-mining areas, which could complicate Norway’s insistence on greening the earth by using divestment to shutter these mines.
Many mines already operate at a loss, analysts say, and there’s simply not enough cash in the coal market to allow owners to clean up the land on their way out.
“It’s sort of a situation where nobody, really, is going to end up looking good,” James Stevenson, director of North American coal for analyst firm IHS. “The states have I think a significant risk – the federal government does as well.”
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