THE MINISTRY of Finance has published its own climate and nature strategy to clarify its role in policies and activities related to combating climate change and biodiversity loss.
“Climate change and biodiversity loss are among the most significant challenges faced by humankind. Without addressing these challenges, the well-being of future generations is threatened,” the strategy reads.
The Ministry of Finance categorised the risks stemming from the crises into physical and transition-related risks – examples of the former being floods, droughts, storms and the eroding potential of agricultural land. Transition-related risks, in turn, are caused by the measures adopted to adjust economic and production systems, including effects on the prices of high-emission products that their producers could not anticipate when making the investment decision.
“Although it is difficult to predict the effects, their severity will probably increase as climate change and biodiversity loss progress,” the document reads.
The Ministry of Finance believes Finland should be concerned particularly about the indirect effects of climate change and biodiversity loss, which can affect it through food production, supply chains and climate refugees.
The strategy also takes into account the fairness, future costs and intergenerational dilemmas associated with environmental questions. Action, it underscores, is required immediately even though the effects will only be felt after a few generations and even though the costs are unlikely to be distributed evenly throughout society.
“The government has a key duty to ensure that the transition is carried out fairly. At the same time, the government must ensure that future generations have the opportunity to make decisions for themselves. This is called intergenerational burden-sharing.”
Mikko Spolander, the director general of the Ministry of Finance, argued in a column that the ministry needed its own climate and environment strategy to create a framework for the work carried out by experts at various departments in the context of drafting legislation, choosing financial steering instruments and assessing policy impacts.
The strategy, he told, enables the ministry to communicate both internally and externally what its responsibilities entail and what principles guide its contributions to climate and nature-related policies.
“Climate change, biodiversity loss and the overconsumption of natural resources form a tough trinity that threatens to fundamentally change societies in a way that threatens the well-being of future generations,” he wrote. “The turmoil will change the economy, individual agency and choices.”
He stressed that the ministry must identify and propose – from its own perspective and using the means at its disposal, such as economic and administrative instruments – solutions to curbing climate change, biodiversity loss and overconsumption.
“For example, regulation of the financial markets and taxation can guide the choices made by people and businesses towards the objectives of climate and nature policy,” he specified in a news release.
Aleksi Teivainen – HT