424
Arctic Yearbook 2015
25
20
15
10
5
0
RUS
USA
DNK
ISL
2005
FIN
NOR
SWE
WLD
2011
Several of the Arctic Council members are exporters of oil and gas. And their CO2 emissions on a per
capita basis are above the world average. However, most of the countries (except Russia) in the Arctic
are experiencing a decrease in the CO2 emissions on a per capita basis, since 2005 (Figure 2). This is
largely due to ambitious emission reduction targets1 and successful renewable policies in the Nordic
countries. In the case of the United States, shale gas has contributed to mitigation progress in the
industrial sector.
The Nordic countries have pioneered energy and carbon taxes, which provide incentives for energysaving and fuel switching to lower carbon energy. Figure 3 illustrates renewable energy share in total
energy supply and net removals of CO2 from LULUCF2 in Nordic countries. Iceland has a high
proportion of renewables in their total en ergy supply. And carbon sequestration such as LULUCF has
resulted in a decrease of net carbon emissions, by 25% lower than in 1990.
Figure 4: Renewable Energy as % of Total Energy Supply (2012) and Net Removals (MT CO2) from LULUCF, (2011).
100
10
80
0
60
-10
40
-20
20
-30
0
-40
Denmark
Finland
Greenland
LULUCF (RIGHT)
Iceland
Norway
Sweden
RENEWABLE (LEFT)
Climate change is not a regional issue, but rather part of a global agenda. Without support from
developing countries, the synergy effects of national policies in leading countries will be limited. In
this regard, carbon financing can be a catalyst to promote investments towards a low-carbon economy.
The European Union Emissions Trading Scheme (EU-ETS) has served climate policy using market
instruments, providing price signals for abatement technology since 2005. It allows firms to choose
abatement technologies based on market price of CO2 permits, so that market price reflects
information regarding demand and supply for the carbon permits. As such, market efficiency is a key
The New Nexus of Climate & Energy Security