Green growth?

Climate change is considered one of the most important issues of our time in Finnish society. Both public opinion and political leaders strongly support climate protection. Several studies in recent years have shown that around 85% of Finnish people consider climate change a real and extremely serious threat, and that action should be taken immediately (Helsingin sanomat 2007, 2008 and Demos 2008). In addition, four out of five people are also willing to make personal changes to protect the climate. The differences in attitudes between age, sex, education and political views are only minor. In this light it is not surprising that all political parties have placed climate protection high on their agendas.

Finland and other Nordic countries can be seen as one of the forerunners in climate protection. Finland has reduced its C02 equivalent emissions from 1990 level by 10% with voluntary action and Finland was the first country to enact a carbon tax in 1990. In addition to national action, many municipalities have adopted extremely strict climate strategies. However, Finland still has high annual emissions and due to its energy-intensive industry, heavy use of timber and need for heating due to cold temperature, Finland’s carbon footprint ranked third heaviest in the world in WWF’s report in 2006.

Like the Czech Republic, Finland’s economy is strongly dominated by industry. Industry makes 40 % of GDP and employs 20% of the workforce in Finland. Especially the forest and metal refining industries are extremely energy-intensive and so create a lot of emissions. In fact, approximately 80% of emissions in Finland come from the energy sector, and industry causes approximately half of all emissions. On the other hand, some of the industries are much more efficient than on European average (steel industry, mining).

The need to make huge changes in the energy sector in Finland is evident, but at the same time the competitiveness of the industrial sector should be maintained. The need for changes has evolved into new ideas of a green growth and a carbon-free society. In autumn 2009, the Finnish government published a foresight report on long-term climate and energy policy “Towards a Low-Carbon Finland”. By dedicating the ones in four years published foresight report to climate and energy policy, the government proved its concern on climate change.
The purpose of the foresight report was to mark out the way to a thriving low-carbon Finland through several models of green growth. The main ideas of the report are that economical prosperity and growth don’t have to be sacrificed for climate protection, but on the contrary carbon neutrality should be seen as a possibility to improve the competitiveness of companies, well-being of people and prove that a small country can take a leading role in climate protection.

According to the green growth models, harnessing human inventiveness and new technology, public policies and measures, and citizen’s participation could be the way towards carbon free societies. Increasing energy effectiveness raises competitiveness, new technology offers possibilities for exports and brings advantage in the growing market of low-carbon technology and renewable energy creates lots of news jobs. According to the Technical Research Centre of Finland the additional costs of cutting emissions in Finland by 60% would be only 0,6% of GDP in 2050. The most positive scenarios even estimate an economic growth of 3% annually.

In order to meet the challenge of climate change, Finland has committed to reducing CO2 emissions by 80 % (from 1990 level) by year 2050. This means that the emissions will be around 14 million tons CO2 equivalent in year 2050, which is as much as is produced by only transport today. The governments report suggests that this goal is indeed possible, and that several different paths exist to achieve this goal. The report presents four different paths, out of which none is adapted fully, but it can be expected that the best features out of all will be selected. 

In addition to increasing renewable energy, the government has suggested to give permit to two new nuclear power plants. The parliament should vote on the matter in July, but the probable decision is at least one new power plant permit, which would mean that in addition to the existing four reactors and the one being built in Olkiluoto, there would be altogether seven nuclear power plants in Finland. However, even if good ideas and strategies exist, not all of them realize into good policymaking. In order to become a low-carbon society, Finland should make sensible and sustainable decisions in the energy sector and make investors believe in the possibilities of new technology. At the moment 28,5% of Finland’s energy is from renewable sources (out of which two-thirds are produced as a by-product of the forest industry and 10% as hydropower), and in spring 2010 the parliament accepted an energy package for increasing renewable energy’s share up to 38% by 2020 and 60% by 2050. Out of the increase 55% will come from wood, 16 % from bio-fuels, 15 % wind power and 8 % from the use of heat pumps.

If the building of two new reactors should realize, this would risk the credibility of the plans to invest fully in renewable energy and to strive for new solutions and in the end, a carbon-free society. The nuclear decision has evoked a lot of critic toward the government of turning their coats. Only six months ago, the government stated that green growth could be realized with no nuclear power, or maximum with one. The government also indicated that by improving energy-efficiency, 0 to 1 new nuclear power plants would be needed but still it is now demanding two new reactors to be adapted. The government has been criticized for favoring old technology in the form of nuclear power, when it could have taken an important step for Finland in developing new technologies for renewable energy by increasing their share even more.

The financial crisis has not made climate protection any less urgent or necessary. On the contrary, it can be seen as a possibility to choose another path and avoid many more future harmful financial crisis caused by climate crisis. However, the government’s decision to suggest two new permits for nuclear power plants seems like a panic solution in a time of financial problems. The answer to financial troubles could also be found in renewable energy, as only the existing renewable energy package has been estimated to create 20 000 new jobs.
The path that Finland will adopt towards a carbon-free society remains to be seen, as no clear strategy has been set for the time being. One important indicator will however be given in a few weeks, when the nuclear decision is being made.