Petteri Orpo: Climate change is the defining challenge of our time –
Petteri Orpo: Climate change is the defining challenge of our time

Petteri Orpo: Climate change is the defining challenge of our time

Julkaistu: 25.10.2018 Puheet Ympäristö

Speech held at the Annual Meetings of the World Bank Group and IMF 12.10.2018

President Joko Widodo, Managing Director Christine LagardePresident Jim Yong Kim and Fellow Governors

Welcome to the Annual Meetings of the World Bank Group and IMF, and to the seventy-second Plenary of the Boards of Governors. Please join me in thanking our hosts, the Indonesian government and the people of Bali, for their warm hospi­tality. It is an honour for me and for Finland to chair this meeting.

Much has changed since we last met. Global growth remains strong and unemplo­yment has declined. Although major reforms have helped strengthen the global financial system, the effects of the global financial crisis remain.

Some families still have not recovered. For many, globa­lization means unemplo­yment, falling wages and income inequality. This creates fertile ground for populism and polarization. In a world of declining trust and limited multi­la­teral coordi­nation, a recession could quickly turn into another crisis.

There is concern that robots could be the trigger. It is estimated that millions of jobs could be lost to artificial intel­li­gence, which would hit middle- to low-income workers the hardest. However, technology does not need to work against us. Managed fairly, the digital revolution has the potential to increase prosperity for all.

My country Finland is an example of how this can be achieved. Finland has been an independent state for a hundred years. Finland has made a remar­kable economic journey, from one of the poorest, most agrarian countries in Europe, to one of the wealt­hiest in the world.

How did we get there? By investing in our people—through health, social protection, women’s rights and education.

Our long-term objective is to provide equal oppor­tu­nities to high-quality education and training for all citizens. Finnish education policy is built on the principles of free education and lifelong learning. We believe that education is the key to compe­ti­ti­veness and wellbeing of the society.

As Finland’s experience has shown, investing in human capital not only strengthens a society’s resilience; it also makes economic sense.

In Finland, we value trust. It is the funda­mental pillar of a functioning society. I believe trust is also what we need at the global level. Without trust it becomes impos­sible to find solutions to global problems we are facing today.

Without a doubt, climate change is the defining challenge of our times.

Without a doubt, climate change is the defining challenge of our times. Recent expert reports demon­strate that global warming is happening even faster than we expected. Luckily, the reports also show that we have the means to mitigate climate change. We just need to step up efforts, make the right political decisions and to implement them.

I give you an example close to Finland. In thirty year’s time, the Arctic Sea is expected to be almost completely ice-free in the summer, which would raise sea levels, and could contribute even further to global warming. As the President of Finland, Sauli Niinistö, warned: “If we lose the Arctic, we lose the whole world.”

Fortu­nately, commu­nities around the world are finding innovative ways to adapt. Here in Indonesia for example, commu­nities in Borneo and Java are responding to climate change with agrofo­restry. Unpro­ductive rice paddies are being used to plant teak, which can be cut and harvested. This is good for land produc­tivity as well as biodi­versity.

Of course, responding to climate change involves more than just adaptation. Globally, green­house gas emissions are still on upward trend. Together, we must turn that trend. And there is hope: already, more efficient use of energy and renewable energy sources are helping to reduce emissions notably.

We should encourage green techno­logies and continued innovation. And we should discourage high-emission production techno­logies. However, histo­rically countries have hesitated to take action because of concerns about negative effects on growth.

The Nordic experience shows that it is possible to reduce emissions and still have healthy economic growth. Well-designed climate and energy policies can mitigate climate change while also promoting sustai­nable economic growth and emplo­yment.

As Finance Minister, it is important to me that we are able to come up with concrete measures that are within the compe­tence of the Ministry of Finance. I am very pleased that Finland has taken steps to incor­porate sustai­nable development in our budget, as one of the first countries in the world. This demon­strates how we use taxpayers’ money for advancing the sustai­nable development goals.

The threat of climate change, however, cannot be solved by each nation working alone.

The threat of climate change, however, cannot be solved by each nation working alone. Country-level actions need to be comple­mented by multi­la­teral efforts. The same can be said of the global economy. If we don’t preserve a framework for global economic coordi­nation and coope­ration, we risk reversing the gains from open markets.

The IMF and the World Bank Group have an important role to play in making globa­lization work better. They were created to promote global integration and economic coope­ration. Today, they aim for broadly-shared prosperity.

Prosperity cannot be achieved by resorting to protec­tionism. Trade barriers and tariffs will not solve global imbalances. To solve global challenges, we need to restore trust: trust between citizens, trust between govern­ments, and trust in insti­tu­tions.

Perhaps the greatest asset of the IMF and the World Bank Group is their culture of consensus-building, which is rooted in trust. Global consensus can only be achieved with coope­ration, compromise and goodwill. I know this is not easy. But without consensus, and without trust, there will be no solution to our challenges.

Thank you.

Petteri Orpo