Date: 18-Feb-10

Country: NORWAY

Author: Alister Doyle, Environment Correspondent

OSLO - Norway laid out ways to reach one of the world's toughest climate goals on Wednesday with measures to clean up sectors from oil to transport that it said would trim just 0.25 percent from the economy by 2020.

The "Climate Cure," outlined by state-run agencies to guide deep cuts in greenhouse gas emissions, said costs would range up to 1,100 to 1,500 crowns ($188-$256) per tonne of avoided carbon dioxide emissions.

That is way above a current price of about 13 euros ($17.85) per tonne in the European Union market. Even so, one main scenario in the 300-page report projected only a 0.25 percent cut in the projected size of the oil-dependent economy by 2020.

"It means we'd be as rich by Easter in 2020 than we would otherwise be at Christmas" in 2019, Environment Minister Erik Solheim said of the small cut.

The impact on growth would be modest partly because penalties for emitting carbon would bring in tax revenues that could boost growth in cleaner sectors. The report also assumed technological advances that would spur the economy.

"Let's start with the measures that are cheapest and simplest," Solheim said of the report, which will help design legislation for fighting climate change.

Using different assumptions, the U.N. panel of climate scientists projected in a 2007 report that tough measures to combat global warming could cost 3 percent of world economic growth by 2030.

Norway has set a unilateral goal of cutting emissions by 30 percent by 2020 from 1990 levels, and by 40 percent if other nations sign up for deep cuts as part of a new U.N. treaty to slow desertification, heatwaves, flooding and rising sea levels.

The targets are among the toughest in the world.

CARBON CAPTURE

The report assessed measures such as capturing and storing greenhouse gas emissions from oil and gas installations, biofuels, more electric cars and energy efficiency in buildings. Among cost-effective measures were building cycle paths in cities to discourage car use.

Norway wants at least two-thirds of its cuts to be achieved domestically, rather than by a cheaper option of buying quotas on foreign markets or by investing abroad, for instance by protecting the Amazon rainforests or building wind farms.

Emissions have grown to 54 million tonnes from about 50 million in 1990. The report examined ways to cut between 15 and 17 million tonnes a year by 2020, including three million absorbed by pine forests.

Norway has no real economic problem in buying quotas if it wants -- it has a fund totaling $450 billion invested in foreign stocks and bonds built up from oil and gas revenues.

Deep cuts in Norway are likely to be more costly than in many other nations, Ellen Hambro, head of the Climate and Pollution Agency, told Reuters.

"We don't have coal-fired power plants to close," she said. Almost all of Norway's electricity comes from clean hydropower.

(Editing by Janet Lawrence)

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