Sitra’s statement on the Commission’s climate vision

Statement issued on 22 January 2019

Key observations

Sitra is grateful for the opportunity to issue a statement on the Commission’s Communication “A European strategic long-term vision for a prosperous, modern, competitive and climate neutral economy”.

In many respects, Sitra concurs with the Finnish government’s views regarding the EU’s long-term climate strategy. Finland and the EU have made a strong commitment to the goals of the Paris Climate Agreement. For the goals to be achieved, the medium-term and long-term climate targets of the EU and its Member States must be urgently increased.

By being one of the pioneers in this effort, Finland can secure the foundation for the welfare state for decades to come. At the same time, Finland can take on a more important role in promoting climate solutions. The key observations of Sitra’s statement are as follows:

• The EU must pursue carbon neutrality before 2050, with a vision of a world where global warming is 1.5°C or less.
• Before 2023, Finland must promote the increasing of the EU’s 2030 emission target in accordance with the long-term carbon neutrality objective.
• The transition to a carbon-neutral circular economy must be accelerated, as it reduces emissions and creates economic benefits.
• Emissions must be reduced across all sectors and the existing solutions must be implemented.

Sitra’s statement

The climate crisis is progressing at a worrying rate. The seriousness of the situation was underlined in the Intergovernmental Panel on Climate Change (IPCC) Special Report on global warming of 1.5°C, published in October 2018.[1] The report’s message was clear: limiting global warming to 1.5°C is still possible, but it requires immediate action. The changes that are necessary are of unprecedented magnitude.

Ever-increasing scientific data challenges us to take quick action. We now know that the current commitments made by Finland and the EU are not adequate for reaching the 1.5°C target. Climate commitments and the climate action that supports them must be significantly strengthened.

The EU must adopt a vision of a 1.5°C world

Sitra supports the objective of the EU pursuing net zero emissions, i.e. carbon neutrality, by 2050. The Finnish Climate Change Panel has estimated that Finland should achieve carbon neutrality in the early 2030s and continue to progress to negative emissions thereafter.

It is good that the Finnish Government highlights concerns regarding scenarios 1–6 presented by the Commission. As the Finnish Government points out in its opinion, the scenarios in question are not ambitious enough to limit warming to 1.5°C. Sitra emphasises that Finland and the EU must only promote development paths that are in line with the 1.5°C scenario. This is the only way we can secure the foundation of our welfare society in the future.

Sitra emphasises that the proposed flexibility mechanisms between the emission trading sector, the effort sharing sector and the LULUCF sectors must not compromise the emission reduction targets that are in line with the 1.5°C scenario. Furthermore, when international flexibility mechanisms are used, they must be based on genuine, verifiable and additional emission reductions that reduce global emissions faster than if the flexibility mechanisms were not used.

Finland can support the EU’s climate leadership

The European Union’s current emission reduction target for 2030 is not aligned with the long-term objective of carbon neutrality and it must be increased even before 2023. The later the actions to achieve adequate emission reductions are initiated, the more difficult and expensive it will be to carry them out.

In addition to increasing the medium-term target, Sitra encourages Finland to support the strengthening of the regulatory impact of the EU emissions trading scheme: for example, by reducing the amount of emissions allowances issued in the market at a faster rate.

Finland will have a rare opportunity to take on a role that is larger than its size when our Presidency of the Council of the EU begins in July 2019. With eight parliamentary parties supporting the increasing of the EU’s 2030 target to at least 55 per cent, it is clear that Finland is in an excellent position to guide the entire Union to the path of climate leadership. Sitra encourages Finland to take an active role during the EU Presidency and to drive the EU towards leadership in climate action and the circular economy.

The carbon-neutral circular economy brings opportunities

It is very positive that the Finnish Government’s opinion and the Communication from the Commission recognise the central role played by the carbon-neutral circular economy in reducing emissions and ensuring economic well-being. Firstly, the circular economy can help achieve significant reductions in emissions. For instance, taking the plastic, aluminium, steel and concrete that is already in use and reusing it in accordance with the circular economy could cut global climate emissions by nearly four gigatonnes.[2]

Secondly, according to the Commission the overall economic impact of transitioning to a carbon neutral society is positive. The path to net zero emissions is estimated to have a positive GDP impact of as much as two per cent in 2050 compared to the scenario to which the current policy would lead.

Moreover, modernising the EU’s energy system and phasing out coal, for example, will lead to significant new investment. This situation may present new opportunities and competitive advantages for Finland, as our strengths include the circular economy, the bioeconomy, carbon sinks and high consumer awareness. The EU as a whole should take advantage of these same strengths to achieve its climate objectives.

Deploy existing solutions

Sitra points out that the Commission’s vision also involves uncertainties. The bioeconomy and the large scale deployment of carbon sinks are highlighted as essential measures in spite of it being unclear whether the use of biomass can be increased sustainably while also ensuring the growth of carbon sinks as well as maintaining and growing biodiversity and the ecosystem services nature provides. Carbon capture and storage (CCS) also plays a large role in the Commission’s scenarios. Sitra supports the Finnish Government’s view that, when it comes to new technologies, their uncertainties must be taken into consideration.

For emissions to be reduced quickly, it is important that all sectors participate in the emission reduction effort. In the Commission’s vision, climate action in the agricultural sector is not given a sufficiently large role. It is clear that the agricultural sector must reduce its emissions similarly to other sectors.

In conclusion, Sitra points out that significant reductions in emissions can be achieved through existing solutions. The large-scale deployment of the 15 primarily Nordic climate solutions would make it possible to reduce global emissions by four gigatonnes by 2030 at a reasonable cost.[3]

Helsinki, 22 January 2019

Mari Pantsar, Director

[1] IPCC (2018): Global Warming of 1.5°C. Summary for Policymakers.
[2] Material Economics (2018): The circular economy. A powerful force for climate mitigation.
[3] Tynkkynen, ed. (2016): Nordic Green to Scale. Nordic low-carbon success stories to inspire the world.