The more we know about the speed of climate change, the harder it is to believe that we can cut our emissions fast enough. But it is possible. We can curb climate change.
The global consensus on the need for climate mitigation is wider than ever. Countless companies, cities, states and countries are working hard to cut their emissions. Modern technology helps us reduce emissions while allowing us to cut unnecessary costs, operate in a cost-effective way, and create new business opportunities.
Finland is committed to do its share to reach long-term climate targets. Optimistically thinking, it is possible for us to achieve our 2020 climate goal. The goal for 2050 is challenging, to say the least. According to various climate scenarios, we need to invest 100 billion euros in infrastructure to reach it. A large part of the investments concern our energy sector.
The 100 billion euro journey to cut our emissions by 80–90 % by 2050 can be an interesting and productive trip or an arduous odyssey.
However, Finland is exceptionally well positioned to succeed. We have a well-organised society, a high level of education and an excellent capacity to measure, evaluate, and prepare for change. Our bioenergy resources, our functioning energy market, as well as our electricity, heat and gas grids offer a good base for a next generation of energy solutions.
We also have a tremendous geographic interest in climate mitigation, as climate change is likely to warm the Northern region twice as much as the globe on average and the impacts will be significant.
Finland can reach its 2050 climate target, provided that we keep in mind a few points. I call them Seven Theses for the 100 Billion Euro Journey.
1) Low-carbon economy is a necessity.
The less we invest in low-carbon production in the energy sector, the more we need to invest in other sectors to reach our target. However, to shift our energy sector to low-carbon production, we need to start taking steps and making disciplined long-term decisions immediately.
2) Energy efficiency creates economic efficiency.
Energy efficiency can save costs considerably. One example of successful energy and economic efficiency is adding district cooling to the combined heat and power generation, as global warming will increase the need for cooling. There are countless other examples and opportunities.
3) We need energy storage.
To balance energy consumption and production, we need new technology that enables energy storage. Rapid technology development and price decrease of batteries offer new opportunities to store electricity in households and in electric vehicles. In utility scale, when electricity is cheap, it can be used to produce fuel, like hydrogen or methane. During price peaks, the fuel can be turned back to electricity. Our power, heat, and gas grids are paramount cornerstones of our journey. A successful 100 billion euro journey requires that we understand how these grids can benefit us as a whole.
4) Smart pricing increases efficiency.
Energy pricing should be increasingly based on actual consumption. Smart power grids and smart pricing enable a more efficient energy market. As most Finnish homes already have smart electricity meters, we can benefit from new solutions that direct our power consumption towards lower prices and lower emissions.
5) Domestic fuels benefit the regional economy.
Finland is well positioned to continue developing biobased energy solutions. Energy production affects our regional economy, trade balance, and tax income, and must therefore be planned with great care. Investments have vitally important direct and multiplicative impacts on jobs, the demand for local products and services, and technology development.
6) Money talks. Investments direct our energy solutions.
Regardless of our future politics on climate, interior, industrial, and foreign affairs, we need to make considerable investments in our energy infrastructure by 2050 to be able to guarantee reliable energy distribution. Politics can create favourable or unfavourable conditions for investments. Finland in general is a good place to invest in. Nevertheless, today – given the low price of carbon – the role of taxes, subsidies, and other policy measures is paramount.
7) We decide.
High hopes are placed on energy politics. While ensuring the security of supply and the functionality of our energy market, our energy solutions need to create jobs and technology expertise, support regional economies and alleviate energy poverty.
Our energy infrastructure is part of an international network, the markets for raw materials and energy are international, and we are subject to international regulation. However, whether we are looking at energy solutions through energy politics, climate politics, internal politics or foreign politics, we need to remember that we are the ones who determine our national interest and make our national decisions.
The success of the 100 billion euro journey is in our own hands.
Chairman of Gaia Group