Norway’s wealth fund, and renewable energy

Norway wealth fund to ramp up renewable energy investments,

* Government says fund should invest more in renewable energy

* Says sum should rise to between $5-8.3 billion

* Critics say ramp-up is inadequate

* Plans to get rid of fund’s independent ethics council

* Government may struggle to win consensus on ethics reforms (Adds reactions)

By Camilla Knudsen and Gwladys Fouche

Fri Apr 4, 2014 OSLO, April 4 (Reuters) – Norway’s $860 billion oil fund should scale up its investments in renewable energy and weigh the risk to future returns posed by climate change, the financeministry said on Friday, a shift green groups said was insufficient.

The switch is part of government reforms of the fund – the biggest of its kind in the world – that also include changes to its ethical guidelines and a review of its activities in emerging markets.

It has undershot its 4-percent return-on-investment target since it was established in its current form in 1998.

“The increased scope we give on green investments will help the fund’s ability to actively manage investments in this area,” Finance Minister Siv Jensen told reporters.

But critics said the rise in renewables investments – to a range of between $5-$8.3 billion from $3.3-$5 billion currently – was insufficient. “It’s incredibly disappointing,” Samantha Smith, head of the WWF conservation group’s global energy and climate initiative, told Reuters. “It’s peanuts relative to the overall size of the fund.”

She said the government, a coalition of the centre-right Conservatives and the populist Progress Party, had raised expectations by putting investments in renewables on its joint political platform.

Critics also question a second planned change that would see the fund take over responsibility from an independent ethics council for excluding firms that break its investment mandate, which they argue might undermine its ethical commitments.

“I am very sceptical about the closing down of the ethics council,” Christian Democrat Hans Olav Syversen, who heads the legislature’s finance committee, told Reuters.

That suggests the government, which announced the reform of the fund when it took office in October, may struggle to win consensus support for its proposals in parliament, where it has a minority and relies on the support of the Christian Democrats and a second small centrist party, the Liberals.

FUZZY MANDATE’

The finance ministry decides the mandate of the fund, which invests Norway’s surplus tax revenues from oil and gas production and is managed by a division of the central bank……….http://www.reuters.com/article/2014/04/04/norway-oilfund-idUSL5N0MW0TW20140404