The Norwegian sovereign wealth fund is the largest in the world at around $750 billion, and a new government is currently being formed in Oslo that is considering investing some of the wealth in renewable energy projects across the world.
Formed in 1990, the fund generates money from taxes on Norway’s oil and gas industry, as well as owning several fields in the North Sea, and a 67% stake in Statoil. It also owns large shares in many of Europe’s largest companies, and it has been calculated that one in every $80 invested in equities around the world is owned by Norway, giving the fund massive influence over the global financial market.
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Samantha Smith, the head of global climate and energy initiative at the World Wildlife Fund (WWF), explained that “if Norway actually does this, it will be an unprecedented shift in the global investment community and also for tangible action on climate change.”
After the elections that took place in September, truthdig reports that a centre-right coalition government is being formed by Erna Solberg, the leader of the Conservative party. One of the first proposals that they have talked about is to use the sovereign wealth fund, officially known as the Norwegian Government Pension Fund Global, to invest in renewable energy projects in developing countries, and the global renewables sector.
The WWF is asking the Norwegian government to give 5% of its investment portfolio to invest in renewable energy infrastructure, and end all investment in coal and tar sands.
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The common argument given by climate scientists is that, if we don’t keep global average temperature rises to less than 2°C by 2050, then we will suffer from a dangerous change to the climate. Earlier in the year the International Energy Agency (IEA) said that there is little hope of keeping the temperature rise to less than 2°C, without around $2 trillion of investment in renewable energy by 2020.
It is thought by some that Norway could act as a trend setter if they decide to invest their wealth fund in renewable energy projects. If Norway invests the fund directly, then other sovereign wealth funds around the world may begin to do the same.
By. Joao Peixe of Oilprice.com