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ENERGIX-Stort program energi

Norway in the European green transition - Strategies and policy measures combining cost-effective emission reduction with high acceptability

Alternative title: Noreg i den grøne omstillinga i Europa - Strategiar og politikk som kombinerer kostnadseffektive klimagasskutt med høg aksept

Awarded: NOK 12.0 mill.

Project Number:

335878

Application Type:

Project Period:

2023 - 2026

Funding received from:

Location:

Green transformation of Europe requires efficient and socially acceptable strategies and policies. Norway must balance national interests with EU’s interests and international co-operation on climate policies. Three sectors are chosen due to their importance for Norway and exposure to climate and energy policies, as well as extensive collaboration with EU. 1. More renewable energy production is needed to oust fossil fuels from Europe’s power sector. More low-carbon power production is needed when wind and solar energy production is low, in addition to more energy storage and higher energy efficiency. We use an energy model to analyze the interplay between energy alternatives, land use and cost across regions, and an economic model to compare economic consequences across regions, sectors, and social groups. A survey aimed at citizens and interviews with stakeholder are added to investigate acceptance. 2. Norway has a potential to produce hydrogen from natural gas combined with carbon capture and storage, which EU might be interested in. We assess the competitiveness of this hydrogen compared to hydrogen produced from renewable power in EU, adding economic analysis and assessment of stakeholder acceptance with the help of interviews. 3. Energy-intensive industries in Norway compete on international markets and cannot increase prices due to cost increases from carbon policies. EU is proposing a border tax on imports of four industrial products and power to Europe, to harmonize prices with companies outside Europe. We analyze economic impacts of this border tax across sectors and households in Norway and examine whether the distributional consequences are acceptable. The project will advance a broader and more comprehensive understanding of the energy-climate-economics-acceptance space in Europe, enabling more efficient and feasible energy and climate polices with a sizeable green job creation potential in Norway, and in fruitful collaboration with EU.

The green transition of society and economy in Europe and meeting climate goals is challening and therefore depends on strategies and policy measures that are cost-effective as well as socially acceptable. In this project we combine macro-economic and energy system models and analyses of green transition scenarios with a comprehensive examination of social acceptance. We focus on Norway's choices, both in close collaboration with EU in its climate and energy policies, but also reflecting Norway's differing interests due to differences in energy resources and industry structure. Norway emphasizes developement of new green industries and jobs. Three energy and industrial cases are chosen due to their exposure to climate and energy policies, Norway's energy and trade connections with EU, and importance for Norway. These are the power sector, export of gas-based (blue) hydrogen to EU, and introduction of the 'Carbon Border Adjustment Mechanism (CBAM)'. The analysis is founded on an innovative combination of economic, climate policy and energy modeling with a thorough investigation of social acceptability by means of interviews with stakeholders and a survey across citizens, applied to the three key sectors afflicted by the green transition. The analyses are based on a comprehensive understanding of current and planned climate, energy and industry policies within EU. This research will contribute to increased energy security in Norway and Europe, support the ability to meet climate policy goals, reduce the risk for investments in blue hydrogen, and reduce the climate policy risk for industry and afflicted regions in Norway.

Funding scheme:

ENERGIX-Stort program energi

Thematic Areas and Topics

No thematic area or topic related to the project