The Climate Leadership Coalition is a network of businesses, universities, research organisations and local authorities founded in 2014. Its purpose is to enhance the competitiveness of businesses and research organisations, to improve their ability to respond to the threats posed by climate change and natural resource scarcity and to support them in pursuing the business opportunities arising from these. The CLC currently has more than 50 members representing approximately half of the total market value of the Helsinki Stock Exchange. www.clc.fi
Climate change is the largest single threat faced by Finnish citizens at present, and Finland’s next government must be able to respond to the challenge it poses in a considered manner. However, it is also important to note that the need to mitigate climate change impacts represents a significant business opportunity for those companies in a position to offer solutions to it. According to the International Panel on Climate Change (IPCC), global warming must be limited to 1.5 degrees as higher warming would cause irreversible damage across a number of areas, including global food production. Now is the time to ramp up action: progress must be made during the course of the next government’s term in office.
Climate actions are planned and implemented all over the world. Although our emissions are small in the global perspective, Finland and Finnish companies need to be at the forefront when it comes to developing climate solutions. Huge investments will be needed to achieve net-zero emissions for the largest carbon emission sources: energy, transport, agriculture and manufacturing. However, these efforts will give rise to unprecedented demand for new technologies and climate solutions across the globe. It is estimated that more than USD 120 trillion will need to be spent by 2050 to transition the world’s energy sector towards sustainability. It is expected that the majority of this investment will be spent on renewable energy and energy efficiency initiatives as well as electrical grid upgrades. It should be remembered that as energy and transport systems become increasingly decarbonised, the substitution of fossil-based materials with low fossil carbon and renewable solutions will, in turn, become increasingly important. It is of utmost importance that the next Finnish government helps to drive new opportunities for Finnish exporters by incorporating ambitious new climate policies into their legislative programme and by increasing efforts to facilitate the development and commercialisation of climate solutions.
Public procurement, citizen engagement and improving the effectiveness of EU climate policies are the key areas that we believe should form the core of the next Finnish government’s efforts on climate change. The measures set out below are fully aligned with the EU’s existing climate change policies.
1. Improving the effectiveness of EU climate change policies
Finland will assume the Presidency of the Council of the European Union in July 2019, and climate change policy will be one of the key themes for Finland’s presidency. It is of utmost importance for the EU to keep and strengthen its leading role in climate action since it has sufficient weight, as one of the economic powers, to shape the direction of an ambitious climate policy globally. The EU’s emissions reduction targets set the bar for the rest of the world and the solutions for reducing emissions that have been developed and implemented within the EU lend themselves for introduction in other markets and thus promote the use of carbon pricing internationally.
The EU is a key market for businesses operating within the member states and a major recipient of international investment. For the EU to improve its competitive edge, it is instrumental that policies on climate change are both foreseeable and stably implemented in the long term. In the manufacturing and energy industries, decisions on investment are made for decades at a time, and it is vital that businesses in these sectors are able to plan ahead and anticipate changes in the markets, in the regulatory environment and in the cost of carbon dioxide. A stable operating environment plays an important role in attracting inward investments from outside the EU.
The main problem concerning the EU’s existing efforts on climate change is that the policies that are currently in place are fragmented by nature. They are at present divided into three main categories: the emissions trading sector, the non-ETS sector and the land use, land-use change, and forestry (LULUCF) sector. The biggest challenge is that the non-ETS sector is subject to national policies. The divergent nature of national policies means they do not attract emissions reduction investments efficiently enough. In the absence of the appropriate market mechanisms, it is difficult for the non-ETS sector to deliver emissions reductions in a cost-effective manner. In addition, sufficiently strong market-based incentives are not in place to attract the development of new carbon sinks and material substitutions. In order to achieve the 1.5-degree target, the EU needs to implement a comprehensive and systemic climate solution that also includes carbon sinks and material substitutions. This field also needs R&D to further develop measurement methods.
- Agree upon a clearly articulated set of long-term goals:
- The EU should set a target for achieving net-zero emissions at the latest.
- To agree on a binding carbon budget for the remaining GHG emissions.
- To revise and align the 2030 and 2040 targets with the net-zero target
- Initiate a study during Finland’s presidency on how more systemic solution could be planned and implemented within the EU for the period after 2030.
- Drive the gradual transition to the new systemic model and pilot new solutions, if necessary, before 2030.
Proposal for the text for the government programme
“The government will support the tightening of EU climate targets according to the IPCC 1.5-degree objective and will agree on a binding budget for greenhouse gases. The cost efficiency of climate actions will be the guiding principle and the government will promote the development of a more systemic solution to the EU via measures such as extending and strengthening the emission trading system while simultaneously improving longevity and predictability. During Finland’s presidency, the government will initiate a study on how a more systemic solution could be planned and implemented for the period after 2030.”
2. Public procurement and citizens’ choices – promoting low carbon approaches
Almost 70% of Finland’s total carbon footprint is attributable to households’ choices. For the government’s efforts on climate change mitigation to yield results, it is important to ensure that individual citizens have the ability to make climate-friendly choices easily in the course of their everyday lives. The majority of an individual’s carbon footprint is made up of the emissions generated by the use of energy at home and through the transport we use and food that we consume.
There are three ways in which public procurement plays a key role in people’s consumption habits: 1) Many of the lifestyle choices people make are driven by the availability of public services, including public transport and school meals. 2) Public procurement can be used to generate demand for low carbon goods and services and facilitate their launch on the commercial retail market. 3) Public procurement can be used to generate demand for sustainable products and climate-related labelling schemes and thus promote climate-friendly consumption habits. Policies that help to drive demand also play a key role in the development of competitive export products.
When it becomes more widespread for public procurement authorities and citizens to take climate impacts and carbon footprints into consideration, there will be collaboration opportunities with procurement operations and networks in the companies that are reducing their carbon footprint.
Public procurement and local authorities
1. Prepare and produce guidance and incentives schemes designed to promote low carbon procurement practices starting from carbon-intensive products and services; develop a system for carbon footprint monitoring.
2. Incorporate local authority climate plans and emission calculations into agreements concluded between city regions and the central government in line with a global local authority emissions calculation protocol, which will initially focus on local emissions, emissions from the use of energy and materials outside the area and gradually widen this to include full carbon footprints of all local authority activities.
3. Prepare a set of emission reduction targets in collaboration with the local authorities and introduce carbon footprint calculations into procurement guidelines to support local authorities in the implementation of climate plans.
- Create a road map of incentives and guidance measures to support people in halving their carbon footprint by 2030 in line with the Finnish Medium-term Climate Change Policy Plan (KAISU).
- Use multiple communication channels to raise awareness and disseminate information on climate change and the effect of individual choices as well as to encourage citizens to innovate climate solutions. This will require a wide and visible information campaign using all modern channels and methods.
Joint actions for both areas
6. Develop tools and databases to make cost-effective carbon footprint calculations for products and services easier, and, based on these, develop carbon footprint calculations for high emission product groups and for those product groups for which carbon footprints have not yet been calculated.
7. Develop a set of low carbon criteria and a linked climate impact certification system utilising existing systems and tools and the ongoing EU-wide Sustainable finance end taxonomy initiative.
Proposal for the text for the government programme
“The government will prepare and produce guidance and incentive schemes designed to promote low carbon procurement practices and to raise them into primary selection criteria. The government will create a road map of incentives and guidance measures to support people in halving their carbon footprint by 2030 in line with the Finnish Medium-term Climate Change Policy Plan (KAISU). In collaboration with the EU and the Nordic countries, the government will develop a set of low carbon criteria and a corresponding climate impact certification system. As part of the climate impact certification system, carbon footprint calculations will be developed for high emission product groups and for those product groups for which carbon footprints have not yet been calculated.”