The European Union, California, Finland and the Nordic countries have pioneered climate and business policies that will enable the decoupling of economic growth and greenhouse gas emissions. Between 1990 and 2017, the EU’s GDP grew by 55% while greenhouse gas emissions decreased by 22%. In California, the state’s GDP grew by 350% between 1990 and 2017, while the greenhouse gas emissions decreased from the highest level in 2004 by 14%. In Finland, GDP grew by 180% while greenhouse gas emissions, excluding land use, fell by 21% between 1990 and 2017.
These developments indicate that the decoupling of the economy and greenhouse gas emissions is possible, but now, as climate change continues to accelerate, it is necessary to drive down absolute emissions faster and promote carbon sequestration. In order to limit global warming to 1.5 °C above pre-industrial levels, the level of ambition and the action taken will need to grow five-fold.
To attract the necessary level of investment for emissions reduction activities and carbon capture, storage and material substitutions, businesses have issued a call for clear long-term targets and a more systemic solution that can be rolled out worldwide.
The elements proposed for the European Green Deal are promising, and by enhancing and extending the ETS, the EU can create a predictable, market-based and technology-neutral system that will deliver cost-efficient emissions reductions and create incentives for carbon sinks.
The key elements for a systemic solution from the business perspective are:
- A carbon budget
- A carbon price
- Carbon handprints and footprints
Jyri Häkämies, Director General, Confederation of Finnish Industries (EK):
“The Confederation of Finnish Industries was one of the first business organizations in Europe to make a call for the EU to commit to a net zero carbon emissions target for 2050. We see climate action as a unique business and growth opportunity. To meet our targets, we will have to make large-scale investments in both existing technology and new low carbon solutions. Businesses are ready for the carbon neutral economy, but we need a stable and predictable operating environment to succeed. It is very important that the EU implements a cost-effective and market-based policy to reduce emissions. Setting a binding carbon budget up until 2050 would be a big step forward. While Europe should continue to play a leading role in combatting climate change, it should also be providing solutions beyond Europe. At the moment, Finland is one of the world’s best cleantech innovation countries. We have a unique opportunity to reduce emissions globally by increasing the carbon handprint of our companies.”
Organized by the Climate Leadership Coalition, Confederation of Finnish Industries and Central Union of Agriculture Producers and Forest Owners in collaboration with the Swedish Haga Initiative and the Brussels-based CLG Europe, the event attracted more than 150 participants representing businesses, policy makers and expert organisations.