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Study: Climate change less likely to affect Finnish economy than other countries

The research found that the benefits from Finland's green transition would outweigh any economic negatives caused by climate change.

Möllor på bakgård.
A wind turbine in Kemiönsaari. File photo. Image: Jesper Alm / Yle
Yle News

The impact of climate change on Finland's economy and public finances in coming decades is likely to be smallerthan in most other countries.

This is the main finding of a joint study by the Finnish Institute for Economic Research (Etla), the Finnish Environment Institute (Syke) and Demos Helsinki.

The study found that the direct effects of climate change, such as extreme changes in weather phenomena, will affect Finland's economy less than in a majority of other countries, particularly if mitigation measures prove successful.

The study, commissioned by the Finnish government, further noted that the economic impacts of climate change are diverse and full of uncertainties.

It also pointed out that there is little research on the economic effects of climate change as well as the costs of mitigation.

Finland can gain from green transition

Another key finding of the study was that the positive effects of the green transition in coming decades will be more significant for the Finnish economy than any foreseeable climate change.

However, this requires that global warming remains within reasonable limits, supported by climate action, according to Tero Kuusi, Etla's Research Director responsible for the project.

"Finland's economy must prepare for the spill-over effects of climate change from other countries, for example when economic growth in exporting countries slows down. On the other hand, Finland can also attract international investment as our relative position improves. By investing in the green transition, we will also improve Finland's competitiveness and investments while contributing to a global solution to the problem," Kuusi said in a press release detailing the study's conclusions.

According to the study's findings, policies that promote the green transition will determine the ultimate impact on Finland's economy and public finances.

It also noted that the transition towards a sustainable economy and economic growth will be driven not only by Finnish and EU policies, but also by global technology and changes in human behaviour.

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