Norway

Norway is a northern European country with a small population of 5.4 million people; about 80% live in urban areas, less than 10 km from the sea. Due to harsh climatic conditions, a large part of the country is unsuitable for settlement. Norway’s northern areas are sparsely populated and are notably the traditional home of the Sami minority (about 20 500 registered Sami voters). Norway’s population is growing slowly but steadily. It is expected to reach close to 6 million people by 2050. Norway has the second lowest population density in Europe.

Norway is one of the world’s northernmost countries; the mainland reaches beyond the Arctic Circle. Despite being dominated by forests and mountains, Norway has a rich landscape diversity, particularly in the southern regions. It contains the largest and most pristine representations of many European landscape types. Arable land represents less than 3% of the total land area.

While not a member of the European Union, Norway is part of the EU internal market through the Agreement on the European Economic Area. As such, it implements large parts of EU environment and climate policies. The country also has a long tradition of applying a wide range of economic instruments to green its economy. Norway has a well-functioning environmental governance and management system with a high level of co-operation, vibrant civic engagement in decision making and strong advisory bodies. Citizens have generally free, open access to high-quality environmental information.

Norway has decoupled greenhouse gas (GHG) emissions from GDP growth. After peaking in 2007, domestic GHG emissions have declined, albeit more consistently in the second half of the 2010s. In 2020, they were about 10% lower than in 2010, but only about 4% lower than in 1990. The starting point for emissions reductions in Norway was low because its energy mix was already largely decarbonised, leaving few remaining quick wins. Norway is a small GHG emitter with absolute emission levels similar to other Nordic countries. Norway’s emission level per capita remained below the OECD average in 2020. Per unit of GDP, Norway recorded one of the lowest emission intensity in the OECD area. However, when emissions embedded in imported goods and services (footprint) are included, the CO₂ emission intensity per capita is almost double and well above the OECD average.

Similar to other OECD countries, energy industries, dominated by oil and gas production, are the largest emitting sector. They contribute to nearly a third of the country’s GHG emissions. Despite targeted climate action, the transport sector contributes about a quarter of Norway’s emissions. It is followed by industrial processes and product use, agriculture, residential and other sectors and fugitive emissions from fuel. The structure of emissions is expected to remain substantially unaltered by 2030.

Norway has one of the most decarbonised power sectors of Europe and of the OECD area, thanks to the widespread use of electricity from renewables – primarily hydropower. Oil, natural gas and coal together represented only about half of total energy supply (TES) in 2020. Norway has reduced the share of fossil fuels since 2013 with a view to cutting GHG emissions. Coal made up about 3% of TES for the past few decades. In 2021, the government announced the closure of its only coal-fired power plant in Svalbard. Norway does not use any nuclear power in its energy supply.

Following Iceland, Norway has the second largest share of renewables, representing more than half of its energy mix and 99% of its electricity output. It is the largest hydropower producer in Europe and among the top 10 worldwide. The share of wind power is rapidly increasing. Norway is energy self-sufficient with a surplus of renewable electricity in normal years. It has become Europe’s largest energy exporter.

Norway’s emissions and intensities of fine particulate matter (PM_2.5), nitrogen oxide (NO_x), sulphur oxide (SO_x) and black carbon have all decreased over the past decade. With the exception of ammonia (NH₃) and a recent increase in non-methane volatile organic compounds (NMVOC) emissions due to increased use of disinfectants during the pandemic, Norway reached its air emission targets for 2020. The largest emissions of black carbon originate from the transport sector and wood combustion in residential heating; both emission sources have been considerably reduced. While Norway had failed to meet the Gothenburg Protocol target on NO_x emissions in 2010, the country has reduced its NO_x emissions by nearly a third since 2005. The NO_x tax and the Business Sector’s NO_x Fund contributed to reducing NO_x emissions in the business sector, including shipping, while supporting the phasing-in of new technology. Both measures helped Norway meet the 2020 Gothenburg Protocol target. The country also reached its 2020 Gothenburg Protocol objectives for sulphur dioxide (SO₂) and non-methane volatile organic compounds (NMVOCs) but not for ammonia (NH₃) emissions.

Norwegians enjoy good overall air quality. Premature death attributed to fine particles (PM_2.5) exposure in Norway is less than one-third the OECD average. Average population exposure to PM_2.5 in large Norwegian regions remains above the 2021 guideline value of 5 µg/m³ recommended by the World Health Organization, but western and northern regions are close to achieving it.

Norway complies with EU directives on air quality standards. In addition, the country has set more ambitious local and national targets, supported by excellent nationwide air quality monitoring services. In 2021, Norway’s four major cities all ranked in the top 20 of the European City Air Quality Index. Nevertheless, nearly all larger cities in Norway face localised air pollution problems and periodic worsening of air quality with high peak PM₁₀ concentrations during winter and into spring.

Norway has abundant water resources and is endowed with a large number of lakes and river habitats. Intensity of water use (withdrawal as a percentage of available resources) continues to be among the lowest in the OECD area. However, total freshwater withdrawal has increased, notably due to higher consumption by households and significant water losses. Leakage from the drinking water supply system is estimated at 30% (Environment Norway, 2021). This represents not only a significant loss of water resources but also a potential risk for microbiological contamination in drinking water. Nevertheless, the supply of drinking water is good: Nearly 90% of Norwegians have access to treated drinking water from waterworks with high quality standards. Surface water provides 90% of drinking water.

Most people are connected to public wastewater treatment. However, less than two-thirds of Norway’s population is connected to at least secondary wastewater treatment, which is one of the lowest shares in the OECD area. The share of primary wastewater treatment is particularly high in remote areas. Some 350 000 treatment plants deal with wastewater from about 800 000 people who live in sparsely populated areas. New independent treatment systems are also being built for individual houses and cabins, while other buildings are connected to the public sewerage system. The country’s ageing sewage and drinking water infrastructure requires urgent upgrades. It also needs to adjust to new climate challenges, such as increased precipitation, floods and rising sea levels.

The average Norwegian produces among the highest amounts of municipal waste in Europe, due to a high level of consumption and the inclusion of some waste from the service and industry sectors in the definition. The definition of municipal waste has been changing over the years, which makes it difficult to compare data over time. The decrease in 2020 is due to the COVID-19 pandemic and associated restrictions, which led to an increase of waste generated by households, but also to a decrease of municipal waste from other sources (in particular services). Separate collection of municipal waste is well advanced; bio-waste collection in Norway was introduced in the 1990s. Today, about 70% of Norwegians live in municipalities with source separation of bio-waste and door-to-door collection of food waste.

Norway’s waste treatment profile is similar to its Scandinavian neighbours; nearly half of municipal waste is treated by incineration with energy recovery, while landfilling has almost disappeared following a ban established in 2009. The country has excellent waste treatment facilities, with cutting edge technology for waste sorting. In 2022, the government introduced a tax on CO₂ emissions from waste incinerators.

Norway has one of the world's highest material consumption rates, a high material footprint per capita and low material productivity. More than half of the materials extracted are exported, in particular fossil energy. The government released its first strategy for developing a green, circular economy in July 2021. The strategy has broad scope and largely applies the EU Circular Economy Action Plan 2020.

Norway contains representations of a wide range of climatic conditions, landscapes, vegetation and land use in close proximity, making it one of the most diverse landscapes in Europe. More than one-third of the bioclimatic variation in all of Europe and North Africa is represented within mainland Norway. In addition, it contains the largest and most pristine representations of many European landscape types. Consequently, Norway plays an important role in landscape and species conservation for the whole continent. Although land take is relatively low compared to other European countries, land-use changes in forestry and in agriculture, as well as changes in built-up areas for housing and road purposes, are important drivers of habitat loss in Norway.

A large proportion of Norway’s red-listed species has declining populations, generally because of habitat loss, degradation or fragmentation as a result of human activity. Of the nearly 3 000 threatened species in the Red List 2021, nearly 10% are critically endangered, about one third are endangered and half of them are vulnerable. In 2021, about one quarter of mammals, bird species, mosses and plants were threatened. The share of threatened species in all four of these categories has increased since 2015. The total number of assessed species has also increased.

Norway’s profile is overall similar to its Nordic neighbours, with a comparatively large share of threatened birds. Most threatened species are associated with forest, cultural landscapes (semi-natural areas or open land used for agriculture) and mountains, and to a lesser extent with wetlands and marine and coastal waters. Threatened species are found mainly in the southern regions where species diversity is high and human activity widespread.

Protected areas make up just over 17% of Norway's mainland area. This is in line with the 2020 Aichi target and above the OECD average. Considerably larger portions of land area in Svalbard (65%) and Jan Mayen (nearly all) have been protected for several decades. However, protected areas are not entirely representative of all landscape types, and forest protection is about half the national target of 10%. Moreover, nearly one third of protected areas are at risk of degradation and require additional action to secure their conservation values.

Norway is well below the OECD average for marine protected areas and failed to meet the Aichi target. Only a small share of territorial waters is protected, though Norway has committed to preserving 30% of marine areas as protected spaces. The large majority of Svalbard’s and all of Jan Mayen’s territorial waters are protected areas.

Only about 0.35 % of the country’s land is covered by protected areas that have had management effectiveness assessments and the same is true for 0.01% of the EEZ. Protected Area Management Effectiveness (PAME) evaluations, can be defined as: “the assessment of how well protected areas are being managed – primarily the extent to which management is protecting values and achieving goals and objectives" (Hockings et al. 2006).

Norway is a pioneer in using economic instruments for environmental protection to encourage innovation and internalise some of the environmental costs of harmful activities. It was among the first countries to introduce a carbon tax in 1991. Since then, the country has introduced many other environment-related taxes.

As in other OECD countries, energy-related taxes, including taxes on road transport energy, make up the bulk of environment-related taxes (close to two-thirds), followed by transport taxes (about one-third); only a small portion comes from waste and other pollution and resource taxes.

Norway’s share of environment-related taxes in total tax revenue and GDP is below the OECD Europe average and has decreased over time. This decrease is partly due to the fact that taxes effectively contributed to reducing environmental harmful activities, and thereby undermined their own tax base as illustrated in the example of forgone tax revenues in relation to zero emission vehicles (ZEVs).

While energy and pollution-related taxes have increased since 2012, transport-related taxes have declined since 2004 due to Norway’s generous support for ZEVs. The related tax revenue losses represented close to a third of environmental tax revenue. Moreover, the estimated tax expenditure does not include the full economic advantage given to low- and zero-emission vehicles for many years. The overall advantage is nearly three times higher than the VAT-related tax expenditure (estimated at NOK 30 billion (USD 3.5 billion) in 2021).

Norway’s fossil fuel support, including both forgone tax revenue and direct budgetary transfers, declined over the past decade thanks to the gradual phase-out of several energy and carbon tax exemptions and reduced consumption of transport fuels with the uptake of electric vehicles. Total fossil fuel support represents about 0.2% of tax revenue. In 2020, the lion’s share supports petroleum and the rest natural gas.

Norway aims to provide a long-term perspective on carbon pricing; it thereby provides a strong price signal to encourage increased investments in renewable energy and low-carbon technologies. Norway’s Climate Action Plan 2021-30 proposes to raise gradually the carbon tax on non-ETS emissions from NOK 590 (USD 69) per tonne of CO₂-eq in 2021 to NOK 2 000 (about USD 233) by 2030. A first step was taken in 2022, when the general tax rate was increased by 28% (in real value).

Norway’s nominal carbon tax rate is among the highest in Europe covering over 80% of national emissions. Effective tax rates are relatively high compared to other European OECD countries, especially outside the road transport sector. Norway has also introduced a carbon tax on waste incineration and abolished the exemption for the use of natural gas and LPG in the greenhouse industry in 2022. The country has fully taken part in the EU ETS since 2008, which covers about half of Norwegian emissions.

The total amount of Norway’s public support for business R&D has increased by over 50% between 2015 and 2020 (Statistics Norway, 2021). Spending for environmental objectives represented about 3% of total public R&D. Public funding in renewables has been increasing. It notably targets the development of energy and climate technology with a view to supporting lasting climate-friendly market changes. The state-owned enterprise Enova provides funding for new technology development, supporting nearly 4 000 projects. Moreover, a Green Platform encourages investment and innovation in all sectors. The platform aims to stimulate bigger and more rapid investments from companies in green sustainable solutions and products. The initiative is cross-cutting and involves participation of five ministries. Other measures funded investments in key infrastructure sectors such as green maritime transport.

Norway is among the most generous Development Assistance Committee (DAC) providers of official development assistance (ODA) as a share of its gross national income (GNI). Its development programme focuses on health, education, and climate and the environment (see development co-operation profile).

Norway also supports developing countries and emerging economies with respect to both climate mitigation and adaptation. So far, the large majority of climate financing has been channelled into climate change mitigation. This includes support for the International Climate and Forest Initiative, which is the largest single element in Norway’s public climate finance. The government intends to double its total climate finance by 2026 at the latest, including a stronger focus on climate adaptation. Norway is also one of the largest donors to the Green Climate Fund.