Editorial: Emission reduction changes the world

by Professor Ilkka Savolainen

European Union has taken the leadership on realization of the emissions reduction plans. First, EU has proposed that the rise of the global average temperature should be limited to two degrees compared to the temperature of the preindustrial era. Second, EU is setting clear goals for the reduction of its emissions. By 2050 the emissions should be limited by 60-80%.

In addition, the objective of the French EU Presidency is that the emissions reduction targets and the targets for renewable energy by member states for 2020 will be accepted still during this year.

Finland is also amenable to emissions reduction and renewable energy targets with its own interests. The climate strategy prepared by the government will be given for the Finnish Parliament for discussion and acceptance.

Next spring the Finnish Prime Minister’s Office will get ready a foresight report on the long-term climate and energy policy where e.g. a zero carbon society by the mid of the century is considered.

The presidential election in USA is expected to change the climate policy of the world. Will USA be a proactive constructor of the new climate protocol? However, USA will hardly take a quiet minor part.

The attitudes of China, India and other developing countries are still unclear, but also in these countries the pressure to respond to the challenges of changing climate is increasing.

The growth of the world economy is slowing down due to the crisis in the bank system. The slow growth rate decreases the growth of the emissions, but also the management of the negative impacts of the economy requires money so that the financing of the changes which promote emission reductions has less resources.

The bad economic development can also increase the risk that the countries implement protectionist policies which in the long term slow the technological development and emission reductions.

Thus, there are many challenges for the climate negotiations starting in December in Poznan, Poland. Eventually, the aim is to achieve a new climate protocol in Copenhagen by the end of the year 2009.

The countries should agree on the common vision of the mitigation of the climate change, reach an agreement on the sharing of the burden of the emission reductions between developed and developing countries, find common approach to reduce deforestation in tropical countries, and agree on financing of measures. A good progress in those topics could already be an excellent achievement.

Purely the agreement on financing is difficult as the expected money flows are huge, of the order of half a per cent to one per cent of GDP. On the other hand, the amounts of the money needed are small compared with the damages caused by the climate change in the long term. 

To a large extent, the question concerns the redirection of investments. The investment flows which are used for the building of the present type energy production and use technologies should be directed to technologies of sparing use of energy and to energy production technologies causing no or minor emissions only. For the developer and manufacturer of new effective technologies this will create tremendous global markets.

Already now the export of Finnish wind power technology is about EUR500 million per year. And this is only one technology area where the demand will grow due to the emission reductions.

Bioenergy technologies and more generally combustion and boiler technologies as well as many technologies of energy use are very familiar for the Finnish companies. The annual turn-over of these technology industries is about EUR30 billion, or one sixth compared to the Finnish GDP.

When the technology demand will multiply as a consequence of the emission reduction requirement, the costs due to changes can be financed with the incomes obtained from the technology export. At the same time the increased energy conservation and use of renewable energy, decrease also the dependency on fossil fuels and the related price and availability risks. 

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