A dry field in Tuusula, Southern Finland, on 3 July 2022. Natural Resources Institute Finland (Luke) believes it is necessary to accept that farmers could reduce greenhouse gas emissions to generate profits that exceed the direct costs and, thereby, create financial leeway for necessary investments. (Jussi Nukari – Lehtikuva)


NATURAL RESOURCES INSTITUTE Finland (Luke) believes bold changes are needed to agricultural and forestry subsidies to achieve carbon neutrality by the government-set target of 2035.

The Finnish government has founded its carbon-neutrality target largely on the ability of forests to sequester and store carbon from the atmosphere, but the latest data reveals that their ability to do so has diminished significantly.

Luke on Friday published a policy brief that calls for a major re-think of the agricultural and forestry subsidy scheme in order to place greater emphasis on climate goals and provide incentives for agricultural businesses and forest owners to reduce carbon emissions and facilitate the growth of carbon sinks.

“The climate effects of current agricultural and forestry subsidies are partly contradictory. Some of the subsidies promote and some undermine the meeting of climate goals,” it reads.

The forest industry subsidies, for example, have been designed primarily to increase wood production – largely, the management of sapling stands and young forests – and fail to incentivise and steer forest owners to take diverse climate action and protect the nature on a broad enough basis.

While about 80 per cent of direct state subsidies for the forest industry have been directed at increasing wood production and indirectly at increasing logging by, for example, building forest roads, only one to two per cent have been directed at nature maintenance.

“It’s no longer enough to increase wood production and focus exclusively on that in the subsidy policy. Incentives are needed to generate climate and environmental benefits that don’t have a market,” Esa-Jussi Viitala, a special researcher at Luke, stated to Helsingin Sanomat on Monday.

“The scheme could be devised so that the subsidies are not contingent only on the income losses of land owners but also on the climate benefits they create. Such a results-based scheme would provide an opportunity to target measures in areas where they are the most cost-efficient,” he outlined. “It’d make generating environmental benefits a genuine alternative for land owners along with or instead of wood production.”

The Finnish Parliament is presently mulling over a new forestry subsidy scheme, according to the daily newspaper. Also it fails to lay out any financial incentives for forest owners to maintain forest nature even though maintaining valuable habitats benefits the society at large by preventing biodiversity loss, for example.

Luke noted in its brief that the new scheme includes a subsidy for planning the maintenance of paludal forests. As its conditions are partly too loose, however, it would enable the indirect subsidising of potentially harmful practices such as final cutting and supplementary ditching.

Helsingin Sanomat highlighted in its report that many of the activities enabled by state subsidies have been market-based and profitable also without the support. The European Union has instructed member states not to direct state subsidies to market-based activities.

Finland has also justified its forestry subsidies principally with ecological and environmental benefits although environmental and nature maintenance subsidies have been a rather insignificant element of the 25-year-old scheme.

The rehabilitation of paludal forests has been justified with claims that it improves the resilience and environmental value of forest ecosystems even though rehabilitative ditching can turn paludal forests from a carbon sink into a major source of emissions and increase harmful discharges to waterways.

Finland has roughly five million hectares of drained paludal forests, more than any other country in Europe.

Luke assessed that both the current and mooted forestry subsidy schemes – especially the subsidy for maintaining sapling stands and young forests – favour a forest management practice based on clear-cutting. Incentives, it believes, are needed to shift away from clear-cutting to continuous cover management particularly in nutrient-rich peatlands.

“Climate challenges are the largest specifically in peatlands because the peat contained in the soil is an enormous carbon storage,” Viitala told Helsingin Sanomat.

“Transitioning to continuous cover forestry in lush peatlands would deliver not only climate benefits but also benefits for waterways according to current information.”

Luke forwarded three measures for fostering the carbon sink of forests: delaying thinning in suitable areas to bolster the growing stock; adopting practices such as raising groundwater levels in drained paludal forests; and introducing nature maintenance measures in forests.

“There aren’t too many measures to increase carbon sinks in the short or medium term,” reminded Viitala.

Delaying thinning, it estimated, would also support the sawmill industry and promote the production of long-term wood products. The share of wood used for energy generation has increased in the 2000s, currently standing at almost 60 per cent, according to Helsingin Sanomat.

Aleksi Teivainen – HT