Western Europe’s biggest oil producer has decided coal is too dirty to invest in.
Norway’s $890 billion sovereign wealth fund, built on more than four decades of extracting crude from the North Sea, was ordered by lawmakers on Wednesday to limit holdings of companies that produce or burn coal. That could trigger at least $4.5 billion in divestments of stocks such as RWE AG and Duke Energy Corp.
“There’s this incredible logic that coal is the climate problem, and Norway is helping solve the world climate problem by producing gas that can replace coal in Europe and reduce emissions,” Rasmus Hansson, a lawmaker for the Green Party, said in a phone interview.
“That logic has unbelievably been accepted by the Norwegian majority as credible — which it isn’t.”
The cognitive dissonance is on display in Stavanger, Norway’s oil capital. The local Scandic hotel, which charges around $200 a night, tells guests it runs on wind and hydropower. The view is of the North Sea, where Norway — a country that boasts the highest per capita income in Europe after Luxembourg — spends billions extracting its oil.
Such ironies carry over to Norway’s aid programs. The country devotes $385 million a year to saving rain forests in places like Brazil, where it also explores for oil and gas through its ownership of Statoil ASA. The company, in which the state holds a 67 percent stake, is among a list of producers that includes Royal Dutch Shell Plc and BP Plc that on Monday urged governments to replace coal with natural gas, which pollutes less.
The fund is the biggest investor yet to turn its back on coal. Others, including insurer Axa SA, Stanford University as and pension funds such as KLP and the Church of England, have also pledged to reduce or scrap such holdings.
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