Sustainable recovery boosts the necessary transformations in society
Working group proposes measures towards a carbon-neutral circular economy.
The working group on sustainable recovery appointed by Minister of the Environment and Climate Change Krista Mikkonen has published its interim report. The report presents measures in support of economic recovery that also promote the transition towards a carbon-neutral circular economy. The chairs of the working group Juhani Damski, Permanent Secretary of the Ministry of the Environment, and Mari Pantsar, Director at the Finnish Innovation Fund Sitra, handed over the report to the minister on 16 June 2020.
Minister Krista Mikkonen appointed the working group to draft proposals for recovery measures after the coronavirus crisis that also respond to the climate crisis and decline in biodiversity. The set of criteria created by the working group will be used to assess the impacts of individual measures on the climate, sufficiency of natural resources, circular economy, biodiversity, and state of the environment.
“The work done by the group has already influenced the preparation of the fourth supplementary budget. The proposal presented in early June contained more than one billion in funding for clean investments. At the same time the Government made the commitment to use the set of criteria for sustainable recovery in the autumn budget session when preparing decisions on economic recovery measures,” Krista Mikkonen says.
When preparing the interim report, the working group discussed the long-term needs as well. These proposals will be incorporated into the Government’s strategic plan and they will be implemented during the EU programming period that starts in 2021.
“There is a strong consensus on sustainable recovery, both in Finland and in the EU. According to our interim report, all recovery measures must also boost the transformation towards a carbon-neutral circular economy, and any measures that would interfere with this target should be last-resort means to be used only under strict conditions,” Mari Pantsar says.
International comparisons and studies have shown that green recovery measures are not only necessary but also effective. Investments in renewable energy and energy efficiency solutions may create as many as three times the number of new permanent jobs compared to investments in fossil infrastructure.
The interim report also states that leadership in climate solutions means significant opportunities for Finland in terms of both employment and exports.
”Transformation towards a carbon-neutral circular economy requires major changes and investments, but these euros will be used wisely as they take our society into a path where we should be going anyway. Finland is a small country, but our solutions will also help other countries to recover in a sustainable way and support a global transformation towards carbon neutrality”, Juhani Damski says.
Seven transformations to be promoted by recovery measures
The working group discussed the necessary measures through the transformations in society. Transformations are necessary to achieve the Government’s carbon neutrality, circular economy and biodiversity targets – no individual measures will be enough. The transformations considered by the working group are:
- Transformation of the energy system
- Transformation of communities and transport
- Transformation of the food system
- Transformation of the manufacturing industry
- Diverse natural environment and transformation of nature-based solutions
- Private consumption and transformation of the involvement of individual persons
- Transformation of the public sector
Already in the interim report, concrete means are presented to boost each of these transformations.
- The measures to boost the transformation of the energy system and transport include the tax reforms that are under way, without compromising their level of ambition. Low-carbon propulsion systems for motor vehicles must be supported by developing electricity and biogas charging infrastructure and hydrogen technology.
- Investments must be targeted to renewable energy solutions that are not based on combustion. The Just Transition Fund will make it possible to stop using peat for energy more quickly. Energy networks must be strengthened.
- Measures are needed to respond to the growing need for clean energy production and investments in the low-carbon roadmaps of the industrial sector. R&D investments and sufficient amounts of energy support for new technologies are also needed. R&D&I resources should be more strongly targeted to sectors and cooperation that promote a transition towards carbon-neutral production, a circular economy and higher value added.
- In the agriculture sector the focus should shift to a food policy. A national food system strategy is needed to boost the transformation of the food system, with a key focus on comprehensive sustainability and on being able to recognise rapid changes in the food system. Investments are needed in the capability to calculate and model carbon emissions and sinks in the land use sector, and the incentive systems for farming should increasingly be based on performance.
- The measures to boost the transformation in private consumption include steering consumption from ownership to services, including leasing and joint use services, reuse and repair services, heating choices, energy efficiency in housing, vegetarian diets, domestic tourism, and physical activity in everyday life and mass transportation.
- Each year about EUR 25–30 billion is used for public procurement operations. Public procurement could be used more effective than now to promote solutions that are in line with carbon reduction targets and a circular economy. Policies and steering instruments that promote sustainable consumption must be developed through taxation and financial incentives. For example, the maximum domestic help credit could be applicable to renovations concerning heating and energy efficiency. The working group also calls for action to significantly promote nature-based solutions in the community structures.
- The annual budget contains EUR 3.5 billion in support that is harmful for the environment. According to Vesa Vihriälä’s report, support measures that are harmful for the environment must be decreased and the State’s financial support must be retargeted in a way that reforms the production and is environmentally sustainable.
The working group considers that recovery measures that interfere with the achievement of the climate and biodiversity targets must be last-resort means to be used only under strict conditions. The use of such recovery measures should be combined with sustainability commitments. For example, the beneficiary of business aid should make a commitment to reduce emissions and the adverse impact the operations may have on biodiversity. The working group also stresses that social justice must be taken into account in all steering instruments.
The term of the working group is 15 April–30 September 2020. The proposals for urgent measures were to be drafted by 15 May for the preparation group led by Martti Hetemäki. The rest of the proposals should be ready by 30 September 2020.
- Interim report of the working group (pdf, in Finnish)
- Criteria for assessment: How to identify sustainable recovery measures (pdf)
Riikka Yliluoma, Special Adviser, [email protected], tel. +358 295 250 091
Juhani Damski, Permanent Secretary, [email protected]
Mari Pantsar, Director, [email protected], tel. +358 50 382 0755
Juho Korpi, Development Director, [email protected], tel. +358 295 250 136