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President of the Republic at the EU climate seminar in Tallinn

President of the Republic at the EU climate seminar in Tallinn © Vabariigi Presidendi Kantselei

13.06.2019

Planet Earth formed approximately 4.6 billion years ago. If this period was re-calculated to make up one 24 hour day, then the first life forms would have been formed at around 4 AM in the morning, land plants at 10:52 PM and the brief life of the modern man would have begun just one minute before midnight. Let's think of everything we have managed to do in this brief period – regrettably, it is great deal. Within the past century alone we have had such a large and profound effect on this planet that the era has been dubbed the Anthropocene, a separate geologic time period. This is a strong and negative word.

More than a hundred years ago, Swedish chemist Svante Arrhenius established the connection between CO2 concentration and temperature increase. Even then, Arrhenius understood that it is the emission of CO2 that eventually leads to climate change. However, he certainly could not have foreseen the severity of the issue humankind is facing now—one hundred years later.

In 1959, a laboratory measuring the rising CO2 levels in the atmosphere was founded on Mauna Loa. The Keeling curve for assessing concentration was born. Since then, it has become increasingly apparent that the ocean cannot absorb all human-emitted CO2 and its concentration in the atmosphere continues to grow.

How should we feel about this increase of CO2? The most sensible thing to do is to assess the effects of past periods in which CO2 concentration has increased on a non-anthropogenic basis. The Earth's paleoclimate has provided us with a wealth of valuable information which can be used to predict future processes when combined with modern climate models. One clear-cut connection we find evidence for in the past is between greenhouse gas concentration and air temperature. There has always been a correlation.

Additionally, ocean floor sediment and polar ice research has revealed that, in the past, climate has been relatively unstable and that this changeability is somewhat cyclic. However, history shows no increase in greenhouse gas concentration and temperature that matches up to what we are facing today. This means that the change must be caused by something significant that distinguishes the current period from those before. Today our planet is suffering from the disease called Man, which is emitting CO2. There is no room for parallel interpretations.

One thing is for sure, we have reached uncharted territory; temperature that has not before been reached during the existence of mankind. Evolution has also helped nature adapt to geological changes at the level of species, who have been able to slowly change to survive in the new environment. However, we all know that evolutionary processes are very slow and the current surge in temperature is simply too rapid for species to adapt. Some species will undoubtedly always become extinct and be replaced by others, but the evolutionary model simply cannot react to extremely fast processes. This is precisely why this temperature rise is so dangerous.

As we well know, the species Homo Sapiens is evolutionally isolated because we live in an artificial environment, so there is no point in pretending that we can adapt indefinitely. We cannot, and other species around us cannot either.

At the beginning of the 1980s, researchers at NASA computed the Earth's energy balance, which served as evidence of global warming. Back then, they already understood the consequences of such processes. This discovery seemed quite theoretical and did not yet capture people's attention. Expanding knowledge about the climate led to the establishment of the Intergovernmental Panel on Climate Change (IPCC) in 1988. Today this organisation unites the best climate researchers in the world –reflected by 97 per cent scientific consensus.

After the IPCC was founded, the number of publications on climate studies increased even faster than CO2 in the Keeling curve. We have thus become much smarter. However, as much as it has been searched for, to date, no alternative explanations for climate change besides human activity have been found.

Even if the scientific assurance would not be this extensive, a sensible person would not risk the unforeseeable consequences. Unfortunately, we are recklessly experimenting with climate. The issue is that when we finally do get the answers, it will be too late to do anything. We have contributed huge amounts of energy to climate systems. It seems that, having lived as carbon hostages for decades, we have already affected the climate to an extent of which we have no full awareness and which could have indeterminate effects. This influence might manifest later because the climate system is inert. We do not yet know what the curve will look like or when will we have to leave the current balance, for a new balance to emerge. An whether there will be a place for humans in this new balance.

It is great that Europe has understood this better than some other wealthy economic areas. We have an ambitious goal – a climate neutral economy by 2050. Hopefully this objective will be formalised by autumn because some less radical scenarios are also on the table. Yes, it really is the case that immediate costs will have to be done now, while they will only result in significant benefits for subsequent generations. It is a long-term strategic investment. Not all achievements can be assessed by primitively adding up income. Even if we are happy with our end state, we can never measure the alternative cost we avoided and the risk that never became a reality. Evaluating these indicators using market value is rather complex and I do not think it should be attempted.

We know this affects us closely. What happened to Ida-Viru County could be seen coming. Actually, the price of the CO2 quota had been stable and extremely low, then significant changes were made and we knew they would lead to an increase in prices. We are also aware of the fact that current CO2 price caps are quite close to the point where even with wood pellets and shale gas, our most modern units would still have a place on the market.

On the one hand, this mechanism works exactly as we had planned. On the other, we had to foresee this change, but, as always, we hoped the market mechanism would fail. It did not, and there is nothing to be done.

First and foremost, I want to stress that no one's personal problem, e.g. their job loss, can be minimised because it is "our climate" and "we wanted this". It is crucial to treat these two issues separately – we cannot have the mentality that nothing can be done because someone will lose their job.

I worked in Ida-Viru for a long time last autumn and there are companies increasing capacities and offering hundreds of people jobs. It is actually a great time for our economy to take a huge step forward. Especially because, in the near future, the short-term solutions we could strive towards are out of reach. Today we do not have one or two Enefit or Auvere plants in the reserves that could be activated any time we feel like it. The first time we could even think about applying the new capacity standards is in four or five years anyway.

This means that we must seriously consider whether the transitional methods we have been weighing are sensible. For example producing shale gas and, emitting CO2, still have a place on the energy market. However, the profitability of this investment cannot be too extensive, otherwise it will hinder us from reaching our goals. Today, I genuinely and honestly want to understand the current situation – as a state we are capable of finding better solutions than when, for example, Kreenholm was closed. Back then, we simply lacked resources. Now we have the funds to solve the issues our people face and guarantee them new positions in other sectors. We may even be able to offer financial support for salaries to make sure people can adapt to the change in speciality. All of this simply must be done, as we are facing problems today, and any transitional solutions are at least four years away.

Yes, we could just pay people four years’ worth of salary, hiding behind all kinds of excuses and then give them new jobs. This would mean postponing the problem. This is a classic move in the playbook of developed countries; they are buying themselves a longer past. Now is the time to think about whether this is the right way to go. We should consider the developmental leap Estonia has taken to get to where we are today – we secured our great position, compared to states we were in the same ranks with 30 years ago, thanks to courageous decisions rather than buying time and holding onto our past.

What sets Estonia's economic culture apart from, for example, Slovakia's? Slovakia has car factories that must be supported by public funds in order to continue running. The plants have not recovered production costs, but companies already feel compelled to move toward areas with cheaper labour costs. Instead, Estonia became a digital state. IT makes up 7% of our GDP. We do not struggle to keep the car plants we worked hard to attract in business for a few more years.

Looking at Estonia's past, it seems to me that if any country in Europe is ready for a leap ahead, it is Estonia. It is quite strange how many large countries perceive using gas as clean energy. I am sorry – this is not the case, it is a transitional state which should come to an end by 2050 at the latest if we want a climate neutral economy. Yes, it seems as though you could embark on one cyclic investment journey, but I would like you to note that the countries who invest in future technologies usually come out on top. For example, our success as a digital state. Upon establishing digital systems, 60% of people in tax administration lost their jobs. Estonia's labour market is very flexible and by now we have an abundance of resources for helping people out. Again, by no means am I minimising people's problems, we also need to solve personal issues. But, as is common in Estonia, we solve social issues by appealing to the social security system, rather than the economy. Had we done otherwise, our economy and all of its sectors would not have reached the place they are in now. Let it be said – I do not think it is worth creating a similar situation to the one we are facing today in 25 or 30 years.

I find it extremely important to share climate-related facts with our entrepreneurs. That way, they can be advised against investing in sectors which must take the climate aspect into account even today. Many investors on a global scale make this mistake. We know that since the Paris agreement, approximately 500 billion dollars have been invested in coal-fired equipment. If you think about it, it is really quite peculiar. No longer is it justified to hope that nothing will change before the next elections or the ones after them. If we had thought ahead, even a little bit, our situation might have been better today. Estonia's quest for reducing CO2 emissions has several stages. Somewhere between 1992 and 1994 we reached today's levels, and since then we have been fluctuating. The European Union has already agreed that by 2030, emissions must decrease by 43% compared to 2005 levels. Our emission rates have risen since 2005. Looking facts straight in the face we have not reduced our ecological footprint at all.

Now is the time to look at the facts and acknowledge that the innovative Estonia, which has been courageous to leap ahead and future-oriented in other fields, has failed to do so here. We also know that this is a combination of social and economic problems. Upon solving the issue, we must address the two separately. We cannot solve both of them together, otherwise our children and grandchildren will face an even larger crisis.

Thank you for listening and good luck!