“It is typically Norwegian to be good,” said Prime Minister Gro Harlem Brundland in her New Year’s address to the Norwegian nation 1 January 1992, uncharacteristically flirting with self-righteousness.  Let us revisit the idea that that future rents from Norway’s oil and gas – that is, excess profits converted to public revenue – could be devoted to combating climate change in countries that are unable on their own to attain the goals of the Paris Agreement of 2015. This would mean a little more oil money to the world, a little less to the Norwegian people, and better climate for all. Why should Norwegians agree to receive less oil revenues in the future?

The history of Norwegian oil management from its infancy in the early 1960s to date has been a clear and nearly complete success. The Oil Fund, now called the Government Pension Fund Global (GPFG) to reflect its purpose, bears witness. At the beginning of 2023 the fund amounted to NOK 12.4 trillion, corresponding to three times Norway’s annual GDP and making it the world’s largest sovereign wealth fund, equivalent to USD one million for each Norwegian family of four. By law, the people of Norway are the indisputable owner of the fund.

Since the inception of oil production in 1969, Norway has extracted 29 billion barrels of oil, thus contributing to global CO2 emissions. By deciding to no longer deposit earnings from the sale of oil and gas in the fund, the Norwegian Parliament can instead decide to use future government revenues from oil and gas to help other countries to satisfy more easily their self-imposed restrictions on CO2 emissions as set out in the Paris Agreement. Thus, the government’s take from oil and gas production in Norway can help finance cleaner technology in other countries.

The rule governing the GPFG dictates that the state can spend three percent of the value of the fund each year, which is equal to the expected return, or USD 30,000 for each Norwegian family of four. Closing the oil fund today Norway can keep on spending the expected return for eternity. In a world confronted by a pending climate catastrophe is it reasonable that this amount should keep increasing?

Legally, there is nothing wrong with economic rent, or super-profit, that nature has produced for millions of years, ending up in the hands of a small group of people, as long as they are the right owners by law and rent-grabbing dictators and oligarchs in their entourage do not deprive ordinary people of their fair share of the rent from resources that belong to the people by law. But what about ethics?

In Norway, we think time has come to say enough is enough and allow the world community to benefit from the future flow of oil money as a tangible contribution to meeting the challenge of climate change, a challenge which Norway, as a significant producer of oil and gas, is partly responsible for. Other oil-producing countries would be welcome to follow suit. The United Nations might consider establishing and implementing a set of internationally agreed principles to foster such a development. After all, the future of our planet is at stake.

Time has come, we think, to regard the current disposition and distribution of oil rents in Norway as unreasonable and to do something to help save the world from a climate catastrophe. Norway could keep extracting fossil fuels and use the super-profit from future oil and gas production to help finance the green transition globally rather than to expand local consumption.

Around the world, oil wealth, which belongs to the people by international covenants on human rights and sometimes also by local laws, has been exploited to enrich the many at the expense of the few. Autocrats can have no reasonable claim to their countries’ oil reserves, especially in view of their handling of the rents in the past. The International Covenant on Civil and Political Rights adopted by the UN General Assembly in 1966 and adopted by 167 countries states that “All people may, for their own ends, freely dispose of their natural wealth and resources.” The provision says people, not states.

Inspired by this legally binding provision of the ICCPR as well as by the EU’s joint supervision of the member countries’ common property resources from the Coal and Steel Community onward, the UN could consider selectively internationalizing oil reserves around the globe in the name of reasonableness, efficiency, and justice.  

Thorvaldur Gylfason is Professor Emeritus of Economics, University of Iceland e Arne Jon Isachsen is Professor Emeritus of Economics, BI Norwegian Business School, Oslo