New study: many obstacles stand in the way of Finland’s climate action – major course correction needed towards the 1.5°C target

This summer’s extreme weather and the recent major report by the IPCC have underscored the urgency of robust climate action.

The 1.5°C target set out in the Paris Climate Agreement requires Finland to be carbon neutral by 2035 and significantly carbon negative soon after, meaning that Finland would sequester more carbon dioxide from the atmosphere than it emits.

Finland has access to a wide range of technologies and solutions to reduce emissions and sequester carbon. These solutions are not being adopted as quickly as they should due to several obstacles. Overcoming them will require a major course correction to align Finland’s climate action with the 1.5°C target.

This is the position taken in Sitra’s new study Course correction – Finland towards 1.5-degree compatible measures, published on Thursday 19th August. The study is based on previous literature and more than 100 interviews with experts.

Sharpening the outlook

According to the study, one of the obstacles is partly related to the unclear long-term outlook. So far, there has been rather little discussion in Finland about the period that will follow the 2035 carbon neutrality target.

The outlook could be clarified by such things as emission budgets, strong emission and sequestration targets for 2040 and 2050 as well as climate roadmaps that cover all sectors of the economy. It is also important to influence EU climate policy to be compatible with the 1.5°C target.

“Emissions must be reduced in all sectors and all parties need to work together. Having a clear outlook would make it possible to achieve a predictable, cost-efficient and fair transition,” says Mariko Landström, Sitra’s specialist in charge of the study.

Creating the right incentives

Impactful climate action is also hampered by inadequate economic incentives. Carbon sequestration, for instance, is not attractive under current policies. The first move in this respect could be to pilot a carbon compensation scheme to pay subsidies to forest owners for growing carbon storage. Support for carbon sequestration in agriculture should also be developed.

For industry, there is a need for incentives for capturing and storing bio-based carbon dioxide. For the forest industry, capturing carbon dioxide from wood at pulp mills could also provide new business opportunities in the future.

Incentives are also needed for emission reduction measures in agriculture, the replacement of fossil fuels and the reduction of natural resource use.

Smoother permitting processes and investments in infrastructure

According to the study, some of the bottlenecks to climate action are administrative. For example, the construction of onshore wind power is already progressing in Finland without subsidies, but projects are slowed down by long zoning and permitting processes. In addition, the radar operations of the Finnish Defence Forces limit wind power construction, particularly in eastern and southern Finland.

The government should find a solution to the radar issue in co-operation with wind power operators. For other wind power projects, administrative courts should be allocated more resources to deal with appeals, planning should be made more flexible and permitting processes made smoother.

Climate action is also hindered because existing infrastructure does not support a quick transition to zero emissions. Investments are needed in a sustainable and resource-wise urban fabric for sustainable mobility, energy-smart buildings and an adequate distribution network for transport electricity as well as new sustainable fuels.

The study also points out that climate knowledge should be increased in schools and through supplementary training in various fields. Substantial investments in research and product development are also needed.

“Mitigating the climate crisis is essential for the well-being of Finns and the prosperity of the Finnish economy and society. What we need now is a major course correction towards 1.5-degree compatible measures to enable a controlled transition,” says Director Mari Pantsar of Sitra.

The study is timely, as the Finnish Government is currently updating its medium-term climate policy plan, the climate and energy strategy and the Climate Act. Climate issues will also be discussed at the budget workshop in early September.

Join us on Thursday 19th August to hear and discuss the results of the report at the publication event. The event will take place from 10:00 to 11:45. Registration is open until the start of the event.

Find out more about the study: Course correction – Finland towards 1.5-degree compatible measures

Further examples of the corrective measures needed:

Electricity and district heating

• Ensure through taxation, for example, that non-combustion based solutions are feasible in heating production relative to wood fuels.
• Closely monitor the development of the energy system. Where necessary, develop incentives for increasing flexible electricity production, for example, to ensure the security of supply.

Industry

• Set targets for the more efficient use of natural resources, negative emissions and hydrogen, prepare a roadmap for the implementation of solutions and create incentives with the help of sustainability-focused tax reform as well as distribution and blending obligations.
• Increase investments in research, development and innovation as well as funding for pilots and demonstrations. Create pioneering markets for low-emission products, for instance through public procurement, pricing linked to carbon price or distribution obligations.

Built environment

• Introduce fees for land use changes and a requirement for ecological compensation. Make zoning more flexible to make it easier to change the use of buildings.
• As a rule, require buildings to have a planned service life of 100 years, implement stricter energy efficiency requirements for both new construction and renovation and include preparedness for demand response for electricity and heating in the requirements.

Transport

• Implement comprehensive tax, fee and subsidy reform for the transport sector with the aim of reducing emissions.
• Increase support for the development, demonstration and market entry of new sustainable fuels.
• Implement a progressively stricter distribution obligation for renewable fuels in aviation and marine transport.

Agriculture

• Ensure that paludiculture is eligible for agricultural subsidies and gradually eliminate agricultural subsidies for peatlands where a high water level is not maintained. Develop new incentives to reward agricultural operators for emission reductions when a field is excluded from agricultural use.
• Make the clearing of peatlands for cultivation subject to an environmental permit and implement a fee for land use changes of this kind.
• Increase investments in the product development and commercialisation of recycled fertilisers and growing media that replace peat.

Use of forests and wetlands

• Make Kemera the granting of subsidies for sustainable forestry conditional on forest management choices that support biodiversity, such as maintaining healthy ratios of different tree species. Reform Kemera subsidies so that they treat continuous cover and even-aged silviculture equally.
• Reform subsidies and regulations to incentivise continuous cover forestry in peatland forests.
• Subsidise the climate-wise treatment of cutaway peat production areas or implement a regulatory obligation for it. Make the decision to gradually phase out the use of peat.