Lesson from Norway: Energy Insecurity = High Prices and Inflation

At COP15 I met with the Norway delegation. Their economy is based on hydro, but the cost of hydro went up ten-fold this summer.

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Canada is often compared to Norway because we both export oil and gas, but did you know that 91% of Norway’s economy is powered by hydro?

Parts of Canada are blessed with hydro (Quebec and BC for example) but many regions don’t have much hydro power (Alberta).

Hydro isn’t a magical solution, however, as Norwegians recently found out.

Consumers and businesses in energy-secure Norway, which exports both hydro power and oil and gas, experienced hydro prices that multiplied tenfold this summer. Some consumers were shielded with a government subsidy, but many businesses went bankrupt.

In a world of energy insecurity, domestic hydro power is not immune to skyrocketing increases. Lesson learned! Energy scarcity equals higher costs and inflation.

My report on my meeting with the Norwegians at COP15: