Climate change mitigation represents a major opportunity for economic growth is the main conclusion to emerge from the Business and Policies to Achieve Climate Neutrality seminar, which took place on 7 October 2019.
The European Union, California, Finland and the Nordic countries have pioneered climate and business policies that will enable the decoupling of economic growth and greenhouse gas emissions. Between 1990 and 2017, the EU’s GDP grew by 55% while greenhouse gas emissions decreased by 22%. In California, the state’s GDP grew by 350% between 1990 and 2017, while the greenhouse gas emissions decreased from the highest level in 2004 by 14%. In Finland, GDP grew by 180% while greenhouse gas emissions, excluding land use, fell by 21% between 1990 and 2017.
These developments indicate that the decoupling of the economy and greenhouse gas emissions is possible, but now, as climate change continues to accelerate, it is necessary to drive down absolute emissions faster and promote carbon sequestration. In order to limit global warming to 1.5 °C above pre-industrial levels, the level of ambition and the action taken will need to grow five-fold.
To attract the necessary level of investment for emissions reduction activities and carbon capture, storage and material substitutions, businesses have issued a call for clear long-term targets and a more systemic solution that can be rolled out worldwide.
The elements proposed for the European Green Deal are promising, and by enhancing and extending the ETS, the EU can create a predictable, market-based and technology-neutral system that will deliver cost-efficient emissions reductions and create incentives for carbon sinks.
The key elements for a systemic solution from the business perspective are:
- A carbon budget
- A carbon price
- Carbon handprints and footprints
Organized by the Climate Leadership Coalition, Confederation of Finnish Industries and Central Union of Agriculture Producers and Forest Owners in collaboration with the Swedish Haga Initiative and the Brussels-based CLG Europe, the event attracted more than 150 participants representing businesses, policy makers and expert organisations.
Key messages delivered by the event’s speakers are presented below.
For more information, please contact: Jouni Keronen, Chief Executive Officer, Climate Leadership Coalition, firstname.lastname@example.org, tel. +358 50 4534881
Petteri Taalas, Secretary General, WMO: “The recent United In Science report illustrates that climate change is accelerating, as evidenced by global temperatures, atmospheric CO2 levels and sea level rise. To stop global temperatures increasing by more than 2°C above pre-industrial levels, our level of ambition needs to be tripled. And to limit the increase to 1.5°C, it needs to be multiplied by five. The challenges are immense, but we must not be driven to despair, given that reasonable, consensus-based solutions are available to the international community, governments and civil society. To get to these solutions, we need a “Do” movement, not a “Talk” movement.”
Elina Bardram, Head of International Relations, Directorate General for Climate Action, European Commission: “In November 2018, the European Commission published A Clean Planet for all, a strategy proposal aiming to reach climate neutrality by 2050. According the strategy, modernising and decarbonising the EU’s economy will stimulate significant additional investment in energy and related infrastructures from 2% to 2.8% of EU GDP per annum. It will be positive for growth and jobs, with GDP projections showing growth up to 2% in 2050. In addition, there will be significant co-benefits such as improvements in public health and avoidance of the costs of negative climate impacts. In line with the political guidelines of the President Elect Ursula von der Leyen, the European Commission will start preparing the elements of the European Green Deal including the first European Climate Law, extending the emission trading system (ETS), renewing the industrial strategy towards achieving a circular economy, supporting the transformation financially and improving a level-playing field for competition. In this context the EU Commission warmly welcomes collaboration with other parties, sub-national governments and stakeholders, including partners such as California and representatives of the business sector.”
Richard Corey, Executive Officer, California Air Resources Board: “California has set greenhouse gas emissions reduction target 40 percent below 1990 levels by 2030 and is committed to achieving carbon neutrality by 2045. California has established successful climate action programs that engage every sector of the economy and the cap-and-trade program continues to play a key role. The proceeds from the cap-and-trade are used to support the transformation to a clean energy economy with a significant share directed to low income and disadvantaged communities. California has a cooperation agreement with the EU on carbon markets and continues to deepen the collaboration with the EU and interested fore-runner countries, sub-national governments and businesses.”
Leena Ylä-Mononen, Director-General, Ministry of the Environment, Finland: “The Finnish government has set a target for Finland to achieve carbon neutrality by 2035 and for the country to become carbon negative soon after that. We have already decided to ban coal for energy use from 2029, and we are planning to phase out fossil fuel oil in heating by 2030, reform taxation for energy and transport and to strengthen carbon sinks. We are also creating sector-specific low-carbon roadmaps in cooperation with industry and supporting the transition towards a circular economy, creating opportunities for proactive businesses.”
Jyri Häkämies, CEO, Confederation of Finnish Industries: “The Confederation of Finnish Industries was one of the first business organizations in Europe to make a call for the EU to commit to a net zero carbon emissions target for 2050. We see climate action as a unique business and growth opportunity. To meet our targets, we will have to make large-scale investments in both existing technology and new low carbon solutions. Businesses are ready for the carbon neutral economy, but we need a stable and predictable operating environment to succeed. It is very important that the EU implements a cost-effective and market-based policy to reduce emissions. Setting a binding carbon budget up until 2050 would be a big step forward. While Europe should continue to play a leading role in combatting climate change, it should also be providing solutions beyond Europe. At the moment, Finland is one of the world’s best cleantech innovation countries. We have a unique opportunity to reduce emissions globally by increasing the carbon handprint of our companies.”
Pertti Korhonen, Chairman, Board for Business Finland and DNA, Founding Chairman, Climate Leadership Coalition: “Climate change mitigation calls for huge global investment, and we need to speed up fast. A good example of the “gap” we are seeing is that last year only about 30% of our new energy supply came from CO2-neutral sources. And only just over 20% of greenhouse gas emissions have any kind of price attached to them. In the EU, the recent developments with regard to the ETS have illustrated that the system really works, as planned, if we let it work. The industry welcomes widening the ETS as well as closing the gap with a carbon budget. In addition, the industry welcomes the R&D and commercialization support for pivotal technologies like power-to-x, hydrogen, circular economy and electrification of everything.”
Lars Peter Lindfors, Senior Vice President, Innovation, Neste Corporation: “Neste has over thirty years of experience in developing clean fuels. Through our own innovations we have developed our renewable and circular solutions, and today we are the world’s leading company in renewable fuels for transportation and aviation. Our present solutions decrease greenhouse gas emissions by roughly 8 million tonnes, equivalent to taking more than 3 million cars off the roads. Now when climate change accelerates, we need to accelerate the development and commercialization of clean solutions. Policies that are predictable, set the right price for carbon pollution, are technology neutral and support the commercialization of new solutions are mostly welcome.
Viktoria Karsberg, VP Head of Corporate Identity and Group Communications, SSAB: “Today the steel industry accounts for 7 percent of the world´s CO2 emissions. We want to change that. As the world continuous to develop and population grows, we expect demand for steel to increase. With the HYBRIT-initiative, SSAB together with LKAB and Vattenfall aim to develop the world´s first fossil-free ore-based steel manufacturing. The plan is to convert our blast furnace to electric arc furnaces in Oxelösund already by 2025, and to be able to deliver the first fossil-free steel products on commercial basis by 2026. This requires the support from decision makers to solve the need for adequate carbon pricing, fossil-free electricity supply, effective permits and support for R&D”
Sirpa Pietikäinen, Member of European Parliament, EPP: “In the future we need to create the same or better value for consumers, the same or better profits for businesses and the same or better competitiveness, when we have can use only one tenth of the current resources. This means that non-renewable resources will remain in eternal circulation and renewable resources will be used at the pace of their renewal. We do not have time to transform ourselves via the traditional way, we need to do this via backcasting – ie. defining the target and a year, and then doing what needs to be done before it.”
Nina Ekelund, Executive Director, Haga Initiative: “The Nordic business community urges policy makers to formulate more ambitious climate policies together with businesses and civil society. This is the message by 38 business leaders in a report of five Nordic climate networks. The report shows that climate change is important to business leaders, there is a strong commitment from leading export companies to reduce both their own emissions and to be part of the global solution to climate change, there is a clear connection between GHG emission reductions and profitability and competitiveness and companies welcome higher targets for speeding up the climate transition.”
Pekka Pesonen, Secretary General, Copa and Cogeca: “Agriculture and forestry are sharply exposed to the effects of climate change, and the fight against climate change cannot be successful without involving these sectors. EU farmers and forest owners are ready to act, but we also need support from the EU. We expect the new Commission to commit to developing incentives for carbon farming methodologies based on robust soil data. It is important that farmers can use technologies that have been proven safe by authorities and are used in other parts of the world. Copa-Cogeca would welcome a boost to Europe’s high-quality food standards worldwide via trade agreements. We cannot commit ourselves to low carbon footprint standards when at the same time we import food with much higher carbon footprint from third countries.”
Juha Marttila, Chairman, Central Union of Agriculture Producers and Forest Owners, Finland (MTK): “MTK has launched the Climate Program in which greenhouse gas emissions must be ambitiously cut and carbon sequestration in vegetation and soil must be systematically improved. Land-using sectors, the growth of forests and field crops and carbon sequestration in the soil and transformation into bioeconomy will play a crucial role, which cannot be ignored. In order to speed up the change we need to have incentives for carbon sequestration from the carbon markets and to verify the carbon sinks and storages we need to improve the measurement and the calculation models of carbon absorption.”
Niels Peter Noerring, Climate Director, The Danish Agriculture & Food Council: “With the political ambition of Europe becoming the world’s first climate-neutral continent a proper holistic approach must be designed. Agricultural emissions result from natural processes. The agriculture sector has already come a long way in terms of reducing emissions, but we need new technologies to store even more carbon and essentially pull carbon out of the atmosphere, for instance pyrolytic processes that store carbon in bio-char etc. In this context the special role of agriculture in providing food when implementing the Paris agreement must be recognised. The future does not lie in decreasing productivity and shifting production as well as our climate impacts to third countries. Europe has to lead the transition towards a more sustainable and efficient food production. Farmers cannot deliver alone but we need the support from the EU and its member states”
Lauri Lehtonen, SVP Innovations, Biomaterials, Stora Enso: “The world needs a new approach on materials! Bio-based materials can in many cases provide for low-carbon substitution alternatives for many traditional carbon intensive materials. Our current products for example have an estimated substitution potential of about 20 million tons of avoided CO2 emissions. We continuously develop new solutions not only for our current customers but also for industries and customers beyond the traditional space of applications and markets. Policies promoting material substitution by targeting change in consumer behavior will be the fastest way to significantly impact the speed of adaptation of these new products and technologies and help achieve climate neutrality.”
Johannes Tiusanen, Farmer, PhD in agrotechnology, CSO at Soil Scout Oy: “It is well known that farmers are reliable suppliers. Recently, the society has subscribed lots of cheap food and farmers have delivered just that. As a consequence, farming is facing an economic disaster. Would the society in this context introduce new kinds of demands, such as carbon capture, it is obvious that such requirements cannot be added on top of the existing ones, so clearly a different strategy is needed. Farmers would absolutely love to contribute carbon capture by producing high yields using climate friendly methods and employing the necessary high technology, but the society must realize that in such a scenario farmers could no longer give their produce away for free.
Christopher Webb, Climate Change Lead, The Nature Conservancy Europe: “Nature-based climate solutions offer much more climate mitigation and adaptation potential than most of us think – indeed up to around a third of all climate action needed by 2030. In order to get the potential in to use we need to have climate policies that can unlock both public and private finance at scale and direct this at activities that have rigorous environmental and social protections”
Martin Porter, Executive Chair – Brussels for CISL and Senior Strategic Advisor, CLG Europe: “The past year alone has seen more and more businesses committing to develop corporate strategies aligned with the Paris Agreement’s most ambitious 1.5 degree goal, and CLG Europe has lead support for the EU to becoming the first climate neutral continent, by mid-century at the latest. The global economic, social and health benefits of full decarbonisation are now clear to them, as well as their employees and consumers. And for businesses in Europe, the opportunity to seize competitive advantage in the smart, clean and circular markets of the future is also crucial. A powerful and effective European Green Deal will be essential to enable the conditions for this to be successful. CLG Europe will continue to support this, and at the same time ts businesses wil take the urgent action necessary to achieve rapid results, too.”
Jouni Keronen, Chief Executive Officer, Climate Leadership Coalition (CLC): “We need a carbon budget for clarifying the goals, carbon price for attracting large scale investments in time – for reductions and sinks and carbon footprints for us all to do climate friendly choices. CLC supports the elements the elements proposed for the European Green Deal and views that by set ambitious and clear climate targets – including a budget for GHG emissions and revisions for 2030 and 2040 targets, enhancing and extending the ETS, strengthening the financing mechanisms to support the transformation of the society and improve and enhance a level-playing field for competition, EU can create predictable, market-based, technology neutral, systemic solution that secures the emission reductions with lowest cost as well as incentivises the development of carbon sinks.