It’s Time to Act on Climate Change: The acknowledgement of facts is the beginning of wisdom, a Finnish president once said. We already have enough facts about climate change. Now is the time not only to draw conclusions but to act.

7 May 2010

Rising greenhouse gas emissions - mostly resulting from human activity - not only threaten our environment, but undermine development and have dramatic and negative consequences for our economic and social well-being, with the most negative effects being felt by the poor.

In order to not compromise the ability of future generations to meet their own needs, a key tenet of sustainable development, we must not allow the global mean temperature to rise more than 2oC above pre-industrial levels. This means that the growth of global emissions has to turn to decline by 2015.

The success of the climate change negotiations will be reviewed against this background.  However, no man or nation can pull the rabbit out of the hat alone.

There is no denying that Western countries have contributed the lion's share to the accumulation of carbon dioxide in the atmosphere. And yet, CO2 emissions from non-OECD countries have recently caught up and even surpassed those of OECD members. This highlights how important it is to get all nations of the world to strive for climate action according to commonly agreed guidelines.

The escalation of the problem can only be stopped through joint effort, or the damage will hurt us all. I am convinced that we all realise that it's about time for a change. But how can we achieve it?

Trade Policy and Climate Change

The trade and climate talks are closely connected. Governments must ensure that the Doha Development Agenda also contributes to the overall efforts in the climate area. Coherence begins at home.

An open and rules-based world trading system benefits all, but is even more important to small and vulnerable countries.  Trade policy can play an important role in harnessing opportunities and challenges of globalisation and in fostering economic growth, job creation and prosperity. In short, trade policy can be used to create a fair and equitable playing field for all.

But trade is a double-edged sword. On the one hand, increased production and exchange of goods leads to higher energy consumption. On the other hand, the way in which open trade increases production efficiencies and national wealth improves our ability to invest in and exploit green technologies.

In the climate negotiations, two issues are pertinent to trade policy. One is technology transfer; the other is the risk of increased protectionism.

I do not believe that a weakening of intellectual property rights is a solution to technology transfer of environmentally friendly products since it may seriously hamper investment in new technologies. Instead, technology transfer can be made effective by liberalising trade in environmental and climate-friendly products. With fewer barriers to the movement of goods, technology expansion is quicker and cheaper, and clean technologies can be exploited at a faster rate. Liberalising trade in environmental goods would benefit every country striving towards lower emission levels.

I am convinced that the central issues of funding and technology transfer can be resolved. This will require a convincing and hard bargaining. It is a tall order, but is doable.

The interdependence of trade and climate also works the other way round: climate policy affects trade in a fundamental way. It may hamper growth in certain sectors and promote growth in others. Climate policy certainly affects the prices of different forms of energy and can lead to carbon leakage from countries where emissions are highly sanctioned to countries that do not implement formal sanctions for their industries.

However, Finland believes that we should not increase trade barriers against countries that do not fulfil climate goals set by the EU. On the contrary, we firmly object to resorting to protectionist measures, because they will eventually complicate the functioning of the economic system. We in Europe still have the option of donating emission allowances to industries where competitiveness is at risk. The allowances will have a time-limitation, so these industries will have to adjust their processes to ensure their future operability.

Climate change is also a business opportunity and sustainability is in fact the main business driver for many companies. However, insecurity about the future climate regime after 2013 hampers and delays investments. Private investment is a key element in combating climate change and we must make sure that the investment on clean technology is the most favoured one.

Companies need a level playing field and that is why we need a global carbon market to set a price for carbon emissions. I am convinced that such a price will be the most effective booster for the development and transfer of new technology.

We also need to work on labelling and certification with the objective of fostering outcomes wthat will facilitate trade and support climate objectives. In particular, we must avoid that standards become new barriers to trade and environmentally friendly technology.

Climate Deal Must Change Energy Use

When we speak of energy security, we effectively speak of climate change: there will be no security if we cannot address the issue of climate change and reduce carbon emissions.

The urgent challenge is to lessen our reliance on fossil fuels, while ensuring economic well-being for a growing number of people on this planet. We need to develop a new generation of energy interdependence provisions in our agreements with energy producing countries since as much as Europe seeks security of supply, external suppliers and industry seek security of demand.

Our common goal should be to turn energy policy into a source of positive interdependence instead of rivalry. This requires strong rules and stable institutions.

The Role of Forests in Addressing Climate Change

As a Finn, I must underline the role of forests in a climate change regime. Due to its energy-intensive forest-based industries, Finland ranks high in energy consumption per capita. But on the other hand, the country of just five million inhabitants produces paper for 100 million people. Sustainable forest management is key to reaching our renewable energy targets and to enabling the survival of our forest industry. Like other forest nations, we need international recognition that forests can be used in a sustainable way, without compromising their role as carbon sinks.

Copenhagen was a missed opportunity. Nevertheless, I feel that we are making progress, but snailspeed must now be geared to overdrive if we are to succeed. The IPCC has admitted that it may have made exaggerated predictions about glaciers melting, but this should not serve as an excuse for inaction. The fact is that glaciers will melt and it doesn't serve a purpose to start arguing about the exact timetable.

It is imperative that we conclude a comprehensive climate treaty in Mexico City next December.

Jorma Korhonen is Director General, Department for External Economic Relations, Ministry for Foreign Affairs of Finland.

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