The climate issue is therefore in large part about how poor countries can achieve solid economic growth without a continued rise in greenhouse gas emissions. With the rise in emissions we have seen, the world will have to prepare for and adapt to a warmer climate. At the same time, climate change impacts are becoming increasingly evident. This may lead to abrupt policy shifts. 4 Von der Leyen, U. (2019): Political Guidelines for the next European Commission 2019–2024. 11  The outlook for future oil demand reflects considerable climate and energy uncertainty. Businesses, banks and investors are paying more attention to this risk. The outlook for offshore activities on the Norwegian shelf has also become more uncertain. NORGES BANK ECONOMIC PERSPECTIVES 13 FEBRUARY 2020  The oil price decline in 2014 brought to light once again the important role of the petroleum sector for the economy. Rather than being in a unique position, the Norwegian economy had to restructure and adjust to lower demand in the oil industry. The oil price collapse marked the beginning of the restructuring that we had long known would come, but it started more abruptly than assumed earlier, for example by the Holden III Commission5 (Chart 12). Chart 12 Business sector less dependent on oil. Oil sector demand. 1) Share of mainland GDP.
In Sweden, economic policy has charged the economy with a good deal of stimuli that can help to generate a broader increase in demand now that the stocks cycle is beginning to have a favourable effect and the prospects for the international economy are brightening. As a result of lower taxes and increased transfers, for example, most things suggest that household purchasing power is rising comparatively strongly this year. Seen over a complete economic cycle, the Riksbank’s instrumental rate is comparatively low. Considering the rate of inflation and the signs that activity is picking up, the real repo rate (the repo rate less the rate of inflation) can be said to be low. Then there is the weak exchange rate, which has subdued effects of the international slowdown and is now helping to stimulate the export-oriented sector. All this amounts to not inconsiderable stimuli to general demand in the Swedish economy, stimuli that look like materialising successively. How heavily should we tread on the accelerator? If inflation, even disregarding the temporary effects, is above the target initially, activity is entering an upward phase and economic policy’s impact on the economy is expansionary, then monetary policy ought to contribute to a somewhat lighter foot on the accelerator. But if most of the unduly high inflation stems from transient increases in the price level and if an economic upturn is not yet assured, it may then indeed be advisable to somewhat defer an upward adjustment of the instrumental rate.