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Kokoomus.fi / Julkaisut / Politiikka / Ympäristö / Petteri Orpo: Climate change is the defi­ning chal­lenge of our time

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


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

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