Møre og Romsdal county

Emission of greenhouse gases drives climate change. Without reducing emissions, we will not be able to slow down climate change and thus minimize the physical climate risk that results from climate change.

The transition to a low-emission society requires a sharp reduction in greenhouse gas emissions, also in Norway. We will likely experience more taxes, carbon pricing and bans on high-emitting technologies. This represent transitional risk for municipalities and counties. The local authority's own emissions may fall under the scope of new regulation and thus impose costs on the municipality or county. Carbon-intensive businesses that are important to the local community may experience that demand, revenues and company value are affected, which again may affect tax revenues. You can read more about how the local business community can be exposed to climate risk under the tab «business».

The extent to which a municipality or county controls the emissions in its area varies. For example, it will be easier to influence emissions from industry and own activities (through instruments such as permits and tenders) than emissions from large thoroughfares such as the E6. This is also reflected in the risk: Large emission sources over which the municipality has little influence usually do not represent great climate risk for the municipality.

Large emissions from land-based industry are considered to be a relevant proxy for transition risk. This is because it's likely that high-emitting businesses will be required to reduce their emissions in the future, and that some will face a decrease in demand for their products.

If these businesses also employ a large proportion of the local workforce, the risk is amplified as the local community may experience the loss of many jobs at the same time (a "cornerstone effect"). This can have dramatic effects on budgets as tax revenue is reduced.

The greenhouse gas accounts include emissions from three different greenhouse gases. To compare the global warming potential (GWP) of these, tonnes of CO2 equivalents is used as the common unit of measurement. Carbon dioxide (CO2) has GWP = 1, nitrous oxide (N2O) has GWP = 298 and methane (CH4) has GWP = 25. The factors are taken from the IPCC's fourth main report, and are the same as used in the national emission accounts and in international reporting. Source: the methodology note accompying the Norwegian Environment Agency's municipality distributed emission statistics (in Norwegian).

For coastal municipalities, sea level rise can be a source of climate risk. Roads, buildings and infrastructure can be flooded, especially during high tides or storm surges. This can lead to a reduction in the value of privately and publicly owned buildings, as well as an increase in the cost of carrying out maintenance. Insurance premiums in vulnerable areas may also increase. Liability risk can manifest in recourse claims against a municipality that against better knowledge allows development in areas that are vulnerable to sea level rise.

Tax revenues from inhabitants make an important contribution to the municipality's budget. Therefore, the municipalities are dependent on the business community being affected as little as possible by climate change (physical climate risk) and at the same time succeeding in the transition to a low-emission society (transition risk), so that employment is upheld.