By Kieran Cooke, Climate News NetworkThis piece first appeared at Climate News Network.

LONDON — Norway is sitting on a huge pot on money – and a new government now being formed in the country is considering investing some of that vast stock of wealth in renewable energy projects around the world.

“If Norway actually does this, it will be an unprecedented shift in the global investment community and also for tangible action on climate change,” says Samantha Smith, head of the global climate and energy initiative at the World Wildlife Fund (WWF), one of the organisations lobbying for Oslo to take a more proactive approach on renewables investment.

At the latest count, Norway had more than $750bn of holdings in its sovereign wealth fund – not a bad nest egg for a country with a population of a little over five million, but which is already one of the richest in the world.

A centre-right coalition government is in the process of being formed in Norway, following elections in September. The new government, headed by Conservative Party leader Erna Solberg, has in recent days proposed using money from the sovereign wealth fund – the world’s largest – to invest in sustainable companies and projects in developing countries, and also to make substantial investments in the renewables sector.

The move is being supported by some of the country’s biggest pension funds and by religious groups, non-governmental organisations and other bodies.

“Norwegian savings could change the world,” says Nina Jensen, head of WWF-Norway.

WWF wants the Norwegian fund to allocate 5% of its portfolio to direct investments in renewable energy infrastructure and projects – and to end its investments in coal and tar sands.

Money through taxes

The fund – officially known as the Norwegian Government Pension Fund Global, which up to 2006 was called the Petroleum Fund of Norway – was formed in 1990 and makes its money through taxes from Norway’s substantial oil and gas sector. It also owns oil fields in the North Sea and elsewhere, and has a 67% stake in Statoil, the Norwegian oil conglomerate.

The fund has considerable influence on financial markets around the world. Under present rules governing investments, the fund can put 60% of its money in stocks, 35% in bonds, and up to 5% in global real estate. The fund owns sizeable chunks of some of Europe’s leading companies, and it is estimated that one in every $80 invested in global equities is owned by Norwegians.

Several large investment funds in Europe are already investing in the renewables sector, including pension funds in Denmark and in the Netherlands.

Climate scientists warn that global average temperatures need to stay within a 2°C rise on pre-industrial levels by mid-century. If not, serious climate change could be inevitable.

In a World Energy Outlook report earlier this year, the International Energy Agency (IEA) said there was little hope of remaining within the 2°C limit based on present levels of greenhouse gas emissions, and called for a $2 trillion renewables investment programme up to 2020.

Call for subsidies cutback

The IEA also called for a cutback on fossil fuel subsidies, which it said were six times the amount of support given to the renewables industry in 2011.

Those lobbying for more renewables investment by Norway say the government in Oslo could act as a trendsetter.

The Norwegian fund, generally considered to be transparent and well run, is often held up as a leading example of how to carefully shepherd money accumulated from oil resources, for the benefit of future generations.

Financial analysts predict that if the Norway fund invests directly in renewables, then other sovereign wealth funds around the world are likely to follow suit.