Challenges ahead on the road to climate neutrality

Recently published scenarios show that we have a bumpy road ahead to climate neutrality. These scenarios also help us to grasp the magnitude of the climate challenge. To meet the commitments of the Paris Agreement on climate change, we need to take determined action to reduce greenhouse gases. Although we are currently nowhere near the desired level globally, Finland is pursuing ambitious climate goals, both nationally and in its role as the Presidency of the Council of the European Union.

Emissions reduction scenarios must be viewed as potential future development paths, rather than forecasts or confirmed policy measures. But even so, they allow us to assess possible alternative development paths and the related costs and impacts on society.

Finland striving for zero net emissions by 2035

VTT Technical Research Centre of Finland led the preparation of a long-term scenario that was recently updated to meet the objective in Prime Minister Antti Rinne’s Government Programme of a carbon neutral (climate neutral) Finland by 2035. In other words, we need to turn Finland’s net emissions negative by the mid-2030s. The scenarios focus on natural emissions and sinks instead of the carbon sinks referred to in EU regulation. The modelling of necessary actions and measures is based largely on cost-effectiveness.

The scenarios indicate that climate neutrality is achievable in Finland by 2035. But this will mean a significant rise in the price of carbon dioxide emissions, using instruments such as emissions trading and taxation. The scenarios also suggest that stricter climate targets will cause an increase in costs around 2035, which affect somewhat economic growth.

From this, we can conclude that we need comprehensive and consistent measures to reduce emissions in all relevant emission sectors such as energy production, industry and transport. Similarly, sufficiently large carbon sinks will be needed that can absorb and capture about 20 million tonnes of carbon dioxide annually. However, our ability to reach the net emissions target depends on the future size of forest carbon sinks, which, according to an analysis by the Natural Resources Institute Finland, involves great uncertainty.

Finland will make policy decisions on allocating emissions reduction measures in 2020–2021. This is when we will be preparing a new national climate and energy strategy and also a medium-term climate policy plan for sectors not covered by the emissions trading system. The contents of these will be based on extensive research. There are other issues, too, that we want to take into account such as the requirements for social and regional justice.

Meanwhile in Brussels 

This work on scenarios is highly relevant right now because it will provide a framework for the national long-term strategy, which must meet the requirements of the EU Energy Union Governance. National long-term strategies have to be submitted to the Commission by 1 January 2020. Each Member State must prepare a national strategy until 2050. These strategies will contribute to achieving the EU’s common climate targets. Undoubtedly, each Member State wants to provide a realistic action plan leading to climate neutrality. What is clear though is that we will need significant investments to make the transition from fossil fuels to emission-free energy sources, without forgetting energy efficiency.

The December European Council will lay down the political guidelines on the EU’s common long-term objective of climate neutrality by 2050. All the relevant ministers have discussed at length various ways of achieving the long-term objective during Finland’s Presidency of the Council this autumn; now it is time for high-level decision-making.

Global problems require global solutions

Climate change is a global problem, which means we need global actions to stop it. The International Energy Agency’s (IEA) recent World Energy Outlook paints a bleak picture: there seems to be a wide gap between expectations and practical actions to curb climate change. Emissions from energy use – in other words, the consumption of fossil fuels – were higher than ever in 2018. We are rapidly moving away from what would be the best trajectory for sustainable development.

Despite some positive developments, such as the growing competitiveness of renewable energy and investor interest in this sector, changes are hopelessly slow in view of the Paris Agreement targets, particularly the target to limit global warming to 1.5 degrees Celsius.

If we are to find ecologically sustainable solutions, we must take economic sustainability and social justice into account. What we need is extensive access to emission-free, low-carbon technologies that developing economies can also afford.  The EU and other developed countries have a key responsibility in this respect, as noted at the EU SET-Plan Conference in Helsinki. As the IEA puts it: individuals, companies and investors can contribute to climate work, but governments must take the lead.

Riku Huttunen is the Director-General of the Energy Department of the Ministry of Economic Affairs and Employment