How we know carbon pricing really works

Statoil has for some years called for a price on carbon because we know that carbon pricing actually works. If more governments put a price on carbon, other businesses will follow suit and quickly.

Statoil’s position as a leader in carbon efficiency can be traced back to the Norwegian carbon tax, which is more than 20 years old. In Norway, we pay more than US$65 per ton of carbon emissions. This has helped us to prioritize investments into carbon capture and other emissions reduction technologies. It informs our decision making for investment and is a cost we add to our calculations to see if a new oil and gas project is a viable investment.

So carbon pricing is the most efficient and effective way to stimulate investments in technology, to drive a fuel switch from coal to gas, and to cut the emissions that cause global warming.

What is also important now is to put in place a framework that enables the different carbon trading systems that already exist to be linked and to create momentum towards a more harmonized global carbon price in the future.

Statoil is considered to be a leader in CCS, which is short for carbon capture and storage. We have broad experience from capture and storage projects in Norway and Algeria, and a technology center in Norway where we host testing facilities for CCS technologies. These projects have given us very good insight into the opportunities and challenges that CCS represents. In 2013, Statoil captured approximately 1.5 million tons of CO2. This is the same quantity of emissions as was emitted by all the cars in Norway’s largest cities Oslo, Stavanger, and Bergen.

The expertise and experience we have gained has proved that CO2 storage in large scale is possible and enabled us to establish methods to monitor the CO2 behavior in various reservoirs over time. To date, we have injected 20 million tons of CO2.

Statoil will continue to capture and store CO2, share our expertise, and work with CCS going forward. It will require a strong effort from many, both the private sector and governments, to demonstrate and develop CCS technology.”

This article was first published by The World Bank’s Development in a Changing Climate blog. Publication does not imply endorsement of views by the World Economic Forum.

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Author: Eldar Sætre is the President and CEO of Statoil.

Image: The sun is seen behind smoke billowing from a chimney of a heating plant in Taiyuan, Shanxi province December 9, 2013. REUTERS/Stringer.