Is Norway on the pathway to green growth? Evidence on decoupling between GDP and environmental footprints
Abstract
Proponents of green growth argue that technological advancements and price signals can decouple economic growth from environmental impact through resource substitution and enhanced efficiency. In this research, we investigate the extent to which economic growth in Norway is decoupling from three key indicators of environmental pressure: energy use, greenhouse gas (GHG) emissions, and material consumption. Our findings show efficiency improvements across all of these indicators, but no absolute decoupling for any of them, and less so, a sufficient absolute decoupling to meet global sustainability targets. Despite the prevalent discourse surrounding a purported ‘green shift’, the overall environmental pressure within Norway is still on an upward trajectory. Mounting evidence regarding the absence of sufficient absolute decoupling suggests that the time may be ripe for high-income nations like Norway to transcend policy focus on green growth and engage in transitions towards a post-growth economy.
Short Abstract
The study examines whether Norway's economic growth is decoupling from three environmental indicators (energy use, greenhouse gas emissions, and material consumption). Despite efficiency gains, the absence of absolute decoupling questions the effectiveness of the green shift, prompting consideration of transitioning to a post-growth economy.
1 INTRODUCTION
Since the so-called Great Acceleration in the mid-twentieth century, the global economy has increased tenfold, followed by exponential increases in resource extraction, pollution levels and biodiversity loss (Steffen, Broadgate, et al., 2015). Earth system scientists claim that six of the nine planetary boundaries identified by Rockström et al. (2009), including climate change, biochemical flows, novel entities, water consumption, land-system change and biosphere integrity, have been breached (Richardson et al., 2023; Steffen, Richardson, et al., 2015).
The concept of green growth gained traction after the Rio + 20 conference in 2012 as a policy response to climate and environmental breakdown (Bina, 2013). The core idea of green growth is that technological and organisational advancements will improve resource efficiency and substitution, decoupling economic growth from environmental harm (Bowen & Hepburn, 2013; Jacobs, 2012). Many governments and international organisations, such as the United Nations Environmental Program (UNEP), the World Bank, and the Organization for Economic Cooperation and Development (OECD), have endorsed this approach to sustainability (OECD, 2019; UNEP, 2011; World Bank, 2012).
However, the feasibility of green growth as a pathway to reach global sustainability targets is debated, with critics viewing it as ‘greenwashing’ that upholds conventional growth models (Bina, 2013; Unmüßig et al., 2012). Furthermore, empirical evidence shows that while a degree of decoupling between GDP growth and environmental harm is experienced in some high-income countries for specific periods (Ritchie, 2021; Vadén et al., 2020), trends in efficiency remain far from achieving absolute decoupling at the pace and scale needed to stay within planetary boundaries (Haberl et al., 2020; Hickel & Kallis, 2019; Jackson, 2016; Jackson & Victor, 2019; Parrique et al., 2019; Vadén et al., 2020), and those high-income countries that are experiencing absolute decoupling between GDP and carbon have already far exceeded their fair share to carbon budgets (Vogel & Hickel, 2023).
This study focuses on Norway as a case study to explore whether and to what extent the country's economic growth is decoupling from key environmental pressure indicators, thereby contributing to the ongoing debate about the viability of green growth strategies to meet global sustainability targets.
2 BACKGROUND: GREEN GROWTH AND THE DECOUPLING DEBATE
UNEP, OECD and the World Bank agree on a common policy response to climate and environmental breakdown: promoting green growth through technological innovation to enhance ecological efficiency and resource substitution, ultimately decoupling economic growth from resource use and environmental harm (Hickel & Kallis, 2019).
Decoupling debates have long revolved around two main concepts: relative decoupling, where resource use or pollution per unit of GDP decreases, but the overall levels of environmental pressure still rise, and absolute decoupling, where resource use or pollution decreases while GDP grows (Jackson, 2016; Parrique et al., 2019). Recently, authors stressed the urgency to achieve not just absolute decoupling but at a scale and pace significant enough to curb environmental impact to safe levels before reaching critical tipping points (UNEP, 2011), a concept referred to as sufficient absolute decoupling (Fedrigo-Fazio et al., 2016; Raworth, 2017; Vogel & Hickel, 2023).
Notwithstanding the ecological efficiency improvements in many high-income economies, overall pollution and resource use continue to rise globally (Haberl et al., 2020; Hickel & Kallis, 2019; Jackson & Victor, 2019). Overall, global economic growth remains closely tied to carbon emissions and resource use. Furthermore, while a modest relative decoupling is observed between economic growth and carbon emissions, not even relative decoupling is observed in resource use (Hickel & Kallis, 2019). While some relative decoupling was observed from the 1970s to the 2000s, this trend reversed in the past two decades due to material-intensive economic activities, resulting in a recoupling between growth and global material footprints (Bithas & Kalimeris, 2018a; Krausmann et al., 2018; Wiedmann et al., 2015).
Efficiency gains and shifts to cleaner energy in some countries have not been enough to offset the rapid growth of emerging economies, in a persistent rise in global carbon emissions (Mardani et al., 2019; Mathai et al., 2018). A key question in decoupling debates concerns how to allocate the responsibility for carbon dioxide (CO₂) emissions and other environmental pressures (Ferng, 2003). Decoupling debates often distinguish between production-based and consumption-based environmental accounting. Production-based approaches account for pressures from production within a nation's borders. It is a widely used approach and the one used for Intergovernmental Panel on Climate Change (IPCC) reporting because the data required for the calculations are typically easily obtainable, but it is often criticised for ignoring pressures connected to offshore production and imported products (Peters et al., 2011). Consumption-based approaches account for emissions from all consumed goods within a nation's territorial boundaries, including imports but subtracting export-related emissions (Duus-Otterström & Hjorthen, 2019).
Comparative analysis of production-based and consumption-based indicators reveals that reduced carbon emissions and resource use in some high-income countries result to some extent from outsourcing production to low-income countries, whereby some nations achieve decoupling at the cost of increasing resource-intensive production elsewhere (Bithas & Kalimeris, 2018b; Moreau et al., 2019; Moreau & Vuille, 2018; Peters et al., 2011; Wiedmann et al., 2015).
3 THE CASE STUDY OF NORWAY
Following the discovery of oil and gas reserves within the Norwegian continental shelf during the 1960s, fossil fuels became a major driver of Norway's economic expansion. This economic windfall has served as a vital source of funding for the Norwegian welfare state (Skancke et al., 2014), enabling the realisation of an array of reputed societal accomplishments across diverse domains, including education, income, employment and life satisfaction (Fanning et al., 2021).
3.1 Reputation as green country
Common narratives depict Norway as a model of environmental responsibility, where economic prosperity coexists with advanced climate and environmental policies (Sverdrup et al., 2020; Torvanger & Pillay, 2016), and a recent study situates Norway at the top of the Ranking of Europe's Greenest Countries due to high renewable energy share (Smith, 2024).
Norway was among the first countries to introduce a carbon tax, and its dedication to addressing climate change is evident through substantial contributions to the UN-REDD+ Program, surpassing the European Union's contributions by more than tenfold (Watson et al., 2022). Norway's pioneering ban on fossil oil heating from 2020 also underscores its climate commitment (European Commission, 2017).
In the context of efforts to decarbonise transportation, Norway has promoted an electric vehicle policy since 1990, encouraging the use of electric vehicles through incentives like tax reductions, subsidised charging infrastructure, and toll fee waivers (Kristensen et al., 2018). Additionally, the public transport company from Oslo, Ruter, aims for emission-free services by 2028 (Ruter, 2019).
Before the 2015 UN Climate Convention, Norway pledged for an ambitious 40% greenhouse gas (GHG) reduction by 2030 compared with 1990 (Regjeringen, 2015). In 2020, they raised the goal to at least a 50% reduction, with aspirations for 55% (Regjeringen, 2020).
3.2 Environmental footprints of Norway
Despite its reputation for environmental commitment, Norway has faced criticism for adopting a double standard, whereby strong environmental policies are applied domestically while environmental impacts are transferred to other nations through oil exports and imports of manufactured goods (Peters & Hertwich, 2008; Reinvang & Peters, 2008; Steen-Olsen et al., 2021). Between 1999 and 2012, Norway experienced a 26% increase in the carbon footprint of households (Steen-Olsen et al., 2016). In 2017, household consumption contributed to 64% of Norway's CO₂ emissions, with 42% originating from foreign production (Steen-Olsen et al., 2021).
As real income grew, household consumption surged, making Norwegians the second-highest consumers per capita in Europe, exceeding the EU average by 25% (Statistics Norway, 2019). The UN list still puts Norway at the top of its Human Development Index (HDI), but when adjusted for environmental pressures like climate change and biodiversity loss, Norway plummets down to 121st place (UNDP, 2021). In the Sustainable Development Index, which retains the base formula of the HDI but places a sufficiency threshold on per capita income, and divides by pressure on climate and resources relative to planetary boundaries (Hickel, 2019), Norway ranks 157th. This low performance reflects Norway's overshooting of most planetary boundaries, surpassing sustainable thresholds for CO₂ emissions, material consumption, ecological footprint, freshwater usage, land-use alteration, as well as phosphorus and nitrogen use (O'Neill et al., 2018; UNDP, 2020).
Norway, a significant energy producer and exporter, plays a major role in the global oil and gas market, being one of the world's leading exporters (BP Global, 2020). The oil and gas sector remains Norway's dominant economic force, contributing significantly to value addition, government revenue, investments and exports (Norsk Petroleum, 2022).
4 METHODS AND DATA
4.1 Indicators
Norway's strong economic reliance on fossil fuels has direct impacts on key environmental indicators of environmental pressures, such as energy consumption, material extraction and GHG emissions. It is noteworthy that these indicators constitute primary variables in the context of decoupling analyses and are among the most frequently reported metrics of environmental stress, both by governmental entities and international agencies (Hickel & Kallis, 2019).
Therefore, this study examines whether Norway's GDP is decoupling from energy consumption, material consumption and GHG emissions. We use production-based indicators, focusing on GHG emissions originating within Norway's jurisdiction, including mainland and offshore areas. While we are aware of the limitations of production-based indicators (Wiedmann et al., 2015), their application in this research is predicated upon the availability of systematically collected data from the Norwegian Statistics Bureau.
Resource usage, measured through domestic material consumption (DMC), combines material imports and domestic extraction while deducting exports (Eurostat, 2021). The materials encompass the categories of biomass, metal ores, non-metallic materials and fossil energy materials (Statistics Norway, 2023).
4.2 Data sources
This study used data from the Norwegian Statistics Bureau, Statistisk sentralbyrå (SSB), to analyse indicators from 1990 to 2022. The selection of this timeframe was contingent upon data availability, as comprehensive data for these specific indicators in Norway were not accessible before 1990. It is important to note that between 1990 and 2005, data for material extraction only covered fossil energy materials and biomass. However, starting in 2006, it included non-metallic minerals and metal ores. Data concerning material flows and extraction for 2022 had not yet been released at the time of concluding this study, hence the DMC analysis was conducted for the period spanning from 2006 to 2021.
Data for Norway's GDP were procured from the World Bank (World Bank, 2023).
4.3 Analytical framework
To evaluate relative decoupling, we adopted a productivity-based approach, recommended by the European Commission, Eurostat, the European Union, OECD and UNEP. Relative decoupling occurs when resource or carbon productivity increases, measured as GDP/resource consumption or emissions (US$/gigawatt-hours [GWh] and US$/tonnes). Absolute decoupling takes place when productivity rises, while total resource consumption or pollution (total GWh and total tonnes) decreases.
In line with recent contributions to the literature (Fedrigo-Fazio et al., 2016; Raworth, 2017), this study defines sufficient absolute decoupling as decoupling at the pace and scale indispensable for maintaining economic activities within planetary boundaries. The quantified biophysical parameters utilised in this context are thus predicated upon prior research on planetary boundaries (Cazassa et al., 2016; Dittrich et al., 2012; O'Neill et al., 2018). Considering the world's population at 8 billion people (UN, 2022), these global parameters have been translated into per capita allocations, signifying the fair share of environmental impact that each individual can exert on the planet (measured in Wh per capita and tonnes per capita), thereby staying within safe and fair operating boundaries. This estimation thereby facilitates a comparative analysis between the environmental impact of the Norwegian lifestyle and the lifestyle deemed sustainable for the global population.
As the central premise of green growth is that efficiency improvements and resource substitution will lead to reduced environmental impact overall, this study considered that absolute decoupling signals a greening of the economy, while sufficient absolute decoupling signals a green or sustainable economy.
4.4 Measuring sufficient absolute decoupling
Concerning sufficient absolute decoupling of GHG emissions, our calculations are aligned with the goals of the Paris Agreement, aiming to limit global warming to 1.5°C above 1990 levels (UNFCCC, 2015). To stand an 80% chance of meeting this target, emissions should be maintained between 25 and 30 gigatonnes of CO₂-equivalents annually until 2030 (Rogelj et al., 2018). For the current global population of 8 billion, this translates to a per capita emission allowance of approximately 3.1–3.8 kg of CO₂-equivalents yearly, averaging at around 3.5 kg. Achieving the 1.5°C goal by 2100, even in the event of a transient temperature overshoot, might require significant carbon dioxide removal (CDR) measures, which come with uncertainties and risks (IPCC, 2023).
Recent research has situated energy consumption within a framework of planetary boundaries (Cazassa et al., 2016; Dimitriev, 2013). However, what constitutes a sustainable level of energy consumption is debated. Some authors suggest that staying within the limits of net primary production (NPP), the biosphere's energy foundation, requires an annual energy consumption not exceeding 7.50 × 1013 watts (W) (Cazassa et al., 2016). Others argue that global thermodynamic equilibrium and technological capabilities could support a consumption rate of up to 1014 W (Dimitriev, 2013). Translated to per capita values, sustainable energy consumption levels considered in this research range from 9375 to 12,500 W, averaging at around 11,000 W. However, this estimate exceeds by far the estimations of more stringent proposals, which have situated sustainable energy use down at 2000 W (Stulz et al., 2011) or even 1200 W per capita (Vettese & Pendergrass, 2022). Pending a stronger consensus in the specialized scholarship, here we adopt an intermediate threshold value for sustainable energy consumption, situated at 4000–6000 W per capita.
In terms of material consumption, alternative studies have established varying thresholds, including a range of 6–8 tonnes per capita by 2050 (UNEP, 2014), 7.2 tonnes (O'Neill et al., 2018), and a more conservative 5 tonnes per capita per annum, a parameter accounting for higher population growth (Bringezu, 2015). A recent study on Research suggests that global material extraction should stay below 50 gigatonnes annually (Dittrich et al., 2012). On a per capita basis, this implies a consumption limit of 6.25 tonnes of raw materials per capita per year, which is the one adopted in our study. This consumption level is also consistent with recent research on material requirements of decent living standards, where required material footprints have been estimated at 6 tonnes per capita per year, with a lower and upper bound between 3 and 14 tonnes per capita per year (Vélez-Henao & Pauliuk, 2023).
Table 1 summarises the global planetary boundaries and the planetary boundaries per capita calculated for conducting the analysis.
| Energy | DMC | GHG emissions (CO₂ eq) | |
|---|---|---|---|
| Global planetary boundary (per year) | Between 7.50 × 1013 and 1014 W | 50 gigatonnes | Between 25 and 30 gigatonnes |
| Planetary boundary per capita (per year) | Between 9375 and 12,500 W | 6.25 tonnes | Between 3.12 and 3.75 tonnes |
- Abbreviations: DMC, domestic material consumption; GHG, greenhouse gas.
5 RESULTS
5.1 Energy use
Throughout the study period (1990–2022), Norway significantly improved energy efficiency, experiencing a 43% enhancement. In 1990, a US$1 increase in GDP resulted in a rise of 108 Wh in energy consumption. By 2022, the same US$1 contributed to a 62 Wh increase in consumption. This indicates a form of decoupling between energy consumption and the Norwegian GDP, specifically relative decoupling. However, that total energy consumption increased by approximately 18% during this period, rising from 185,042 GWh in 1990 to 218,210 GWh in 2022 (see Figure 1). Consequently, no absolute decoupling is observed.
Per capita energy consumption in Norway has declined since 2010, as shown in Figure 2. This decrease can be primarily attributed to population growth compared with the increase in total energy consumption. However, both total consumption and population continue to rise and there is no absolute decoupling over the studied period, far less so sufficient absolute decoupling. By the end of the study period, energy consumption per capita was 40,221 kWh, which is equivalent to a continuous consumption of 4591 W, falling within the 4000–6000 W sustainable consumption threshold adopted in this study.
5.2 Domestic material consumption
The performance of DMC showed efficiency fluctuations between 2006 and 2021, with the overall trend indicating relative decoupling. This trend can be mainly attributed to a significant increase in Norway's GDP, which doubled during the study period. In 2006, a US$1 increase in GDP resulted in a rise of 0.0624 kg in material consumption. By 2021, the same US$1 contributed to a 0.0346 kg increase in consumption, marking a 45% improvement in efficiency.
The total DMC exhibited an upward trajectory over the study period (see Figure 1), with minor declines observed in 2020 and 2021, coinciding with the COVID-19 pandemic. The decrease in total DMC was 8% in 2020 compared with 2019, and it subsequently decreased by 5% in 2021 compared with 2020. However, these declines, occurring in a relatively short time frame due to exceptional global economic conditions, do not yet indicate a clear trend of absolute decoupling. How material consumption will evolve after the economic recession and the impacts caused by the pandemic subside, remains uncertain.
During the analysed period, DMC per capita has experienced fluctuations, reaching its highest point in 2015, exceeding 32 tonnes per capita. However, it generally remained within a range of 22–25 tonnes per capita (see Figure 2). The average DMC in Norway from 2006 to 2021 was 25.4 tonnes per capita per year.
The 26% increase in Norway's population since 1990 has coincided with a general rise in material consumption, leading to the stabilisation of DMC per capita at elevated levels, which are currently about four times the established sustainable per capita threshold of 6.25 tonnes. Therefore, no evidence suggests that sufficient absolute decoupling is likely to occur in the foreseeable future.
5.3 GHG emissions
Norway's carbon emissions over the study period have been stable, but the Norwegian economy has undergone major improvements in emissions efficiency. In 1990, a US$1 increase in GDP resulted in a rise of 0.0387 kg of CO₂ eq emissions, while in 2022, the same US$1 contributed to increasing emissions by 0.0182 kg of CO₂ eq. This indicates a relative decoupling.
The total GHG emissions stemming from the Norwegian economy (see Figure 1) have exhibited oscillations, including both increases (1992–1997, 1999–2001, 2009–2014) and decreases (1997–1999, 2006–2009, 2018–2020), with fluctuations observed during other periods (2014–2018, 2001–2006). Although there has been a steady decline in total GHG emissions since 2018, this decrease may have been accentuated by the global COVID-19 pandemic. Given the entire 32-year study period, GHG emissions have remained relatively stable, with GHG declining only by 4% between 1990 and 2022, a very modest decline compared with Norway's pledge to reduce emissions by 40% by 2030. Consequently, the data concerning GHG emissions from 1990 onward do not reflect any clear or sustained trend of absolute decoupling.
Despite GHG emissions having essentially remained constant, per capita GHG emissions in Norway have declined from 15.6 to 11.7 tonnes per year due to population growth over the same period (see Figure 2). As of 2022, per capita emissions in Norway were approximately 3.5 times higher than the global boundary. Therefore, given the lack of consistent reductions in total GHG emissions and the disproportionate per capita emissions relative to global standards, Norway is far from experiencing sufficient absolute decoupling for GHG emissions.
A summary of decoupling trends between GDP and selected indicators is provided in Table 2.
| Energy | DMC | GHG emissions | |
|---|---|---|---|
| Relative decoupling | Yes: The Norwegian economy is displaying a trend towards increased efficiency | Yes: The Norwegian economy is displaying a trend towards increased efficiency | Yes: The Norwegian economy is displaying a trend towards increased efficiency |
| Absolute decoupling | No: Total energy consumption has exhibited a continuous upward trajectory | No: While DMC exhibited fluctuations, it did not undergo a substantial decrease | No: Total GHG emissions displayed fluctuations but failed to register a substantial decline |
| Planetary boundary (2022) | Between 4000 and 6000 W per capita | 6.25 tonnes per capita | Between 3.12 and 3.75 tonnes per capita |
| Norwegian impact per capita (2022) | Per capita energy consumption of 4591 W falls within the defined boundary | The recorded material consumption of 22.5 tonnes per capita surpasses the established threshold times 4 | Per capita GHG emissions at 11.7 tonnes exceed by more than three times the planetary boundary |
| Sufficient absolute decoupling | No: Despite current energy consumption levels aligning with sustainability, the data illustrate an upward trend in tandem with population growth | No: Per capita DMC in 2021 was nearly four times higher than the planetary boundary | No: Per capita GHG emissions in 2020 exceeded the planetary boundary by almost fourfold |
- Abbreviations: DMC, domestic material consumption; GHG, greenhouse gas.
6 DISCUSSION
Our analysis indicates that along with economic growth and high levels of development and human well-being, Norway's overall environmental impact has increased during the study period. In the past decades, various policies have been implemented to reduce Norway's ecological impact, but they proved insufficient to keep pace with global sustainability targets.
This observation is consistent with previous research indicating that no nation has managed to meet the essential needs of its population without overshooting planetary boundaries (Fanning et al., 2021; O'Neill et al., 2018).
While progress has been made in enhancing efficiency across all analysed indicators, no absolute or sufficient absolute decoupling has been observed for energy use, resource use or carbon emissions. This could be partly explained by the rebound effect (also known as the ‘Jevons paradox’), where efficiency improvements decrease production costs, often leading to increased demand and offsetting gains in resource use and pollution reduction (Missemer, 2012). Consequently, some researchers argue that efficiency improvements alone may not be enough to reduce environmental impact, as they stimulate economic growth and intensify resource demands (Alcott, 2008).
Total GHG emissions plateaued at 1990 levels. Reductions in one sector were counterbalanced by increases in others, resulting in a mere 4% reduction in emissions in 2022 compared with 1990. Therefore, achieving the pledged target of a 40% reduction in emissions by 2030 seems unlikely.
Efforts to decarbonise transport and heating have seen limited success. Heating emissions decreased by 77% due to the shift towards cleaner energy sources. Motor vehicle emissions declined by 62%, driven by policies supporting electric vehicles. However, vehicles represent a small fraction of Norway's total emissions, and reductions in this sector are counteracted by increases in ocean and other land transportation.
Furthermore, oil and gas extraction emerged as the leading source of emissions, and the country's heavy reliance on petroleum exploration poses challenges for transitioning to a green economy. Following the 2008 economic crisis, gas production increased, countering the decline in oil exploration and resulting in increased GHG emissions in the sector. A recent study asserts that all Nordic countries, except Norway, have achieved absolute decoupling from GHG emissions, attributing Norway's lack of progress to offshore operations in oil and gas (Stoknes and Rockström, 2018).
From 1990 to 2022, Norway's primary energy production surged by 82%, with 95% of oil and gas output exported. Although this export-driven growth provides financial benefits to Norway (recently bolstered as it became Europe's main supplier due to the war in Ukraine), it raises concerns about emissions accountability in countries importing the oil.
This phenomenon, known as carbon leakage, stems from differences between production-based and consumption-based approaches. The former emphasises producer responsibility, considering benefits like job creation and economic growth—that could be, however, achieved through less polluting activities. Conversely, the consumption-based approach places responsibility on consumers, who benefit from pollution creation through private gains but shared costs. Additionally, this approach highlights how citizens in affluent countries consume a disproportionate share of natural resources, making this lifestyle unsustainable for all (Tilsted et al., 2021).
This leads to questions in the public debate about who should bear the responsibility for mitigating the environmental impacts of the economy. Should it be affluent countries that have offshored much of their industrial production and are implementing policies to internalise pollution costs through for example carbon taxes, or developing nations implementing policies to green their production? The allocation of monetary costs for reducing emissions is also a critical consideration. Whereas national accounting and IPCC reporting have been dominated by production-based accounts, a growing body of literature has emphasised the importance of collecting consumption-based data to account for industrial outsourcing and pressures exported or imported through trade (Wiedmann et al., 2015).
Yet another body of literature suggests ‘hybrid’ approaches that combine production and consumption-based accounts, allocating responsibility between producers and consumers in line with the UNFCCC (United Nations Framework Convention on Climate Change) principle of ‘common but differentiated responsibilities and respective capabilities’ (Csutora & Mózner, 2014).
The profitability of the petroleum sector played a pivotal role in Norway's deindustrialisation. The surge in oil prices between 1973 and 1985 led to increased wages in the oil industry, causing wage inflation in other sectors. This wage increase rendered Norwegian goods comparatively expensive to produce, eroding the country's competitiveness and resulting in a rapid decline in its industrial base relative to trading partners (Grytten, 2008). For the past decades, Norway functioned primarily as an importer of semi-manufactured and finished products while exporting raw materials, particularly petroleum.
Until 2004, Norway's economic growth closely paralleled the extraction of fossil energy materials. Subsequently, GDP continued to rise even as fossil material extraction stabilised. However, the Norwegian government persists in granting new petroleum exploration licences annually, providing incentives such as a 2020 tax cut totalling NOK 100 billion for investments in petroleum exploration until 2024 (Stortinget, 2020). Yet, investing in new oil projects risks prolonging carbon lock-in and diverting funds from green transition initiatives.
Historically, the fossil fuels sector has received the largest share of investments in research and development in Norway, later overtaken by energy efficiency in 2014 and renewables in 2019 (IEA, 2023). Yet, these developments faced setbacks during the COVID-19 pandemic, with a resurgence in oil production and a drop in investments in renewables (ibid.). This goes in the opposite direction of the green growth and green economy approach, which makes a case for supporting renewables and other green technologies while reducing subsidies to fossil fuels.
Critics argue that Norway's climate policy is contradictory, providing a cost-effective means to address climate change in Global South countries while avoiding impactful actions domestically (Benjaminsen & Svarstad, 2021). For instance, it is more economical to pay developing countries to preserve their forests through REDD+ than to cease or drastically reduce oil production.
Adding to all the above-mentioned challenges is the projected global population growth, expected to reach 10 billion by 2050 (UN, 2022). This demographic expansion implies that per capita environmental thresholds will continue to shrink, as each individual's capacity to consume and generate pollution without surpassing critical ecological boundaries diminishes.
The green growth approach that dominates Norwegian sustainability policies has faced criticism as a technocratic solution that sidesteps essential discussions on justice and equity that underpin numerous contemporary social and environmental challenges (Brockington, 2012; Hoffman, 2016; Kallis, 2018), but also because research suggests it is unlikely to be compatible with the resource use and carbon reduction required to stay within planetary boundaries (Hickel & Kallis, 2019; Vogel & Hickel, 2023).
A mounting body of research suggests that staying within planetary boundaries may require public policy aimed at reducing production and consumption in high-consuming nations, which may lead to a decrease in the size of the economy measured by GDP. Achieving necessary reductions in resource use and emissions without economic growth may be more feasible, as suggested by the degrowth theory (Hickel & Kallis, 2019; Parrique et al., 2019).
Prominent among these views is the idea of degrowth, which contends that endless economic growth is both unsustainable and undesirable, given its role in environmental degradation and social inequality. It calls for an overhaul of the economic system to enhance social and environmental conditions while reducing material throughput, consequently resulting in a smaller, steady-state economy (Kallis, 2018). Long marginalised as politically feasible, degrowth is gaining growing traction as science-policy organisations under the auspices of the UN, like IPCC and IPBES (Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services), are encouraging the examination of degrowth scenarios as a possible pathway to reverse climate change and biodiversity loss (Martin et al., 2022). Furthermore, recent research has found that degrowth-oriented or degrowth-compatible policy proposals already receive support among members of the European Parliament (Kallis et al., 2024). It has been suggested that a green recovery from the pandemic may present an opportunity for Norway and other countries to explore post-growth scenarios and halt the escalation of its environmental footprint and potentially pursue further reductions of environmental pressures (Gómez-Baggethun et al., 2021; Sandbrook et al., 2022).
7 CONCLUSIONS
Our analysis indicates that Norway is not moving towards a green economy. Despite sustained economic growth and high human development levels, Norway's environmental footprint increased steadily during the study period. Efficiency improved across all three analysed indicators (energy consumption, resource use and carbon emissions), indicating relative decoupling, but no absolute decoupling was observed, far less so sufficient absolute decoupling to stay within planetary boundaries. GHG emissions and DMC slightly declined in 2020 and 2021 during the height of the economic impact of the COVID-19 pandemic, but the sustainability of these trends in the coming years remains uncertain.
Norway's image as an environmentally responsible nation faces scrutiny due to a perceived double standard, whereas string environmental policies are applied domestically while environmental costs are offshored. The increase in total energy consumption poses challenges for asserting absolute decoupling. Similar trends emerge in material consumption, with per capita levels far exceeding sustainable thresholds. Despite commendable domestic policies and efforts to decarbonise, the nation's reliance on oil and gas exports hinders a swift transition to a green economy. The absence of a clear trajectory towards absolute or sufficient absolute decoupling raises questions about the effectiveness of green growth strategies.
Evidence from this study reinforces research questioning green growth as a feasible approach to meeting global sustainability targets, its efficacy in addressing climate change, environmental degradation, and broader issues of environmental justice and fair access to the world's remaining resource and carbon budgets. Rather than retaining a narrow focus on green growth, the time may be ripe for public policy in Norway to explore scenarios for decoupling human prosperity from economic growth and that are oriented to achieve an absolute reduction in energy and resource use. High-income nations with high consumption like Norway are the ones that are better positioned to face a transition towards a post-growth economy.
To make rapid progress towards a sustainable economy, it is critical to implement a broad set of policies aimed at transformative change, including divestment from fossil fuel, robust green taxation and subsidy reforms, reductions in working hours, and the adoption of alternative progress indicators beyond GDP.
Insights from the degrowth theory suggest that a more comprehensive perspective, one that extends beyond mere technological and efficiency considerations, may be pivotal in navigating the intricate interplay between economic activity and environmental sustainability. The exploration of degrowth and post-growth perspectives opens avenues for contemplating alternative economic models that prioritise social and environmental well-being over perpetual growth.
ACKNOWLEDGEMENTS
This article stems from the research conducted in the master's program for International Environmental Studies at the Norwegian University of Life Sciences. We extend our gratitude to Dr. Brototi Roy, Dr. Helmut Haberl, Dr. Federico de Maria, Dr. Giacomo D'Alisa and Dr. Giorgos Kallis for their valuable feedback,and Prof. Darren Smith from The Geographical Journal for reviewing this article. Their contributions played a pivotal role in improving the quality of the manuscript. Special thanks to the Norwegian University of Life Sciences Sustainability Arena, specifically the ‘Embedding Planetary Boundaries in Science, Policy, and Education’ initiative, for partially funding this research.
Open Research
DATA AVAILABILITY STATEMENT
The data supporting the findings of this study are available in Statistics Norway at https://www.ssb.no/en and in The World Bank at https://data.worldbank.org/.
- Economy-wide material flow accounts (Material imports, exports and extraction). Available at: https://www.ssb.no/en/natur-og-miljo/miljoregnskap/statistikk/materialstromsregnskap.
- Production and consumption of energy, energy accounts (Final energy consumption). Available at: https://www.ssb.no/en/energiregnskap.
- Emissions from Norwegian economic activity. Available at: https://www.ssb.no/en/natur-og-miljo/statistikker/nrmiljo.
- Norwegian population. Available at: https://www.ssb.no/en/statbank/list/folkemengde.
- Norwegian GDP. World Development Indicators Database. Available at: https://data.worldbank.org/country/NO.
