Scandinavian Working Papers in Economics

Discussion Paper Series in Economics,
Norwegian School of Economics, Department of Economics

No 12/2021: Resource Rent, Environment and Ethics in Norwegian Petroleum Policy

John A. Hunnes () and Ola Honningdal Grytten ()
Additional contact information
John A. Hunnes: University of Agder
Ola Honningdal Grytten: Dept. of Economics, Norwegian School of Economics and Business Administration, Postal: NHH, Department of Economics, Helleveien 30, N-5045 Bergen, Norway

Abstract: This paper contributes to the understanding of how the environment, ethics, values, and historical contingencies shape public policy. Specifically, it explains the accomplishment of petroleum resource management in Norway. The main argument is that the success of this policy is an understanding of the ethics behind the environmental harvesting of the resource rent of this non-renewable natural resource. The paper firstly describes a model of Ricardian resource rent. Secondly, it investigates the set of values that were in place before the petroleum production started in the 1970s, as described in the influential white paper, “The role of petroleum activities in the Norwegian Society,” published in 1974. In the white paper, the government discussed the future opportunities, challenges, and responsibilities associated with the oil industry and how this would transform society. An important part of the white paper revealed the main ethical vision of the government was to build a “qualitatively better society” for the benefit of the people. Thirdly, the paper traces the historical roots of these values. Finally, the paper concludes that the focus on the natural environment and resource rent management can be attributed to popular values built on historical traditions. According to these, the state and the trust between the state and its citizens played key roles for the formation of the policy.

Keywords: environment; resource rent; ethics; petroleum; oil; public policy.

JEL-codes: L52; N14; N50; Q32; Q38; Q58

21 pages, May 14, 2021

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