Canadian fossil fuel industry shills try to explain away the Norway experience as some sort of anomaly that is impossible to duplicate elsewhere. That’s hog wash.
Years ago, Norway made a choice. They decided that when the country’s non-renewable resources were removed, the public deserved a significant share and most of that value should be set aside for future generations. Politicians created a holding fund and invested it internationally to avoid Dutch disease.
The term Dutch disease was coined by The Economist magazine in 1977. The magazine was analyzing a crisis that occurred in the Netherlands following discoveries of vast natural gas deposits in the North Sea in 1959. The newfound wealth and massive exports of oil caused the value of the Dutch guilder to rise sharply making exports of all non-oil products less competitive on the world market. Unemployment rose from 1.1% to 5.1%, and capital investment in the country dropped.
Dutch disease became widely used in economics to describe the paradoxical situation where seemingly good news, such as the discovery of large oil reserves, has a negative impact on a country’s broader economy.
Producers of Norway’s petroleum resources face substantial taxes. When these were imposed, international oil and gas companies asserted the industry would be destroyed because all fossil fuel companies would close operations and depart.
They didn’t. Smaller profits were better than no profits.
Taking a large share of resource wealth allowed Norway to build a national wealth fund that is valued this week at C$1.37 trillion. The country has prepared better than most for a decarbonized economy.
These charts show the relative values of government’s oil and gas revenues, compared to total GDP. In Norway, with 5.3 million people, upstream petroleum companies are subject to a 27% petro tax plus a special tax of 51%. Alberta petroleum tax is less than 4%. BC’s is near zero.
Sorry, BC’s public share of petroleum revenues is too small for my chart maker to pull it out of the main pie.