Estonia’s new government has made climate topics its priority

With the change of the government in January, there has indeed been a shift, both in priorities and the sense of urgency surrounding the issue. While it was already quite a milestone that previous governments supported the EU climate neutrality goal, it was a bumpy ride due to the political differences regarding EU climate issues. But now it seems that the new coalition is strongly committed to not just riding along, but becoming a leader, on climate policy issues in both the EU and the local community.

One significant promise they’ve made is to phase out oil shale electricity production in Estonia by 2035, and also to phase out shale oil production by 2040. Having clear-cut dates is really significant; I think it’s important as a value statement but also pragmatically. It clears the air in the sense that previously, the debate about phasing out fossil fuels has been slightly vague, but now there is an explicit timeline, a clear ambition. This also means that companies in this sector in the region affected by the decision will have a concrete timeframe for making necessary adjustments. But it is also important since it puts political pressure on the government itself – ok, you’re going to phase out oil shale, but what’s the plan for ensuring a just transition? What’s the plan for economic diversification? The new government has delivered on a few critical elements, like preparing a really detailed and credible just transition action plan in the oil shale mining region of north-eastern Estonia. The next step will be to put finances behind it. Now there is a sense of urgency about building the new renewable capacities faster.

Government action is also needed in, for example, the case of offshore wind, where problems with planning permits in local communities have prevented any progress from being made. The government has to solve this problem if we’re going to have centrally-led offshore planning in a couple of years’ time, let alone a realistic chance of getting major new parks up and running by 2035.

I think it is possible because the world has significantly changed. Over the last few years two things have become clear. Firstly, renewable technologies have become much more economically competitive. In its 2019 World Energy Outlook, the International Energy Agency highlighted that in most parts of the world, wind and, in particular solar, are now the most competitive electricity production technologies, price-wise. For many years, renewables were value- and subsidy-based; people felt they had to be used solely for the sake of the planet. But now we actually use them because it is economically sensible. They’re clean and competitive; it makes sense.

Secondly, public perception has shifted and climate risks have become a reality. If you look back 5 or 10 years, climate worries were there in the public consciousness, but perhaps not so strongly and not with such priority. Over the last couple of years, however, the forest fires, the extreme weather events have shown us just how real these climate threats are. People are beginning to understand that this is something very tangible, very real and that it is already here. It is not some scare story for the future, but something that is already affecting all of us. Of course, this is more the case in some regions and countries than in Estonia, but still, the magnitude of the problems we are facing has sunk in.

So, there is public acceptance of the fact that decision-making to tackle the climate crisis is needed, and there are also reasonable solutions readily available. I think this combination has created a kind of window of opportunity. Plus, of course, there is quite a strong push in this direction at the EU level, in terms of the European Commission’s priorities, for example, or the fact that the Commissioner for Energy is Estonian. These are small, additional nudges that strengthen the move in this direction.

It was actually very positive to read the new coalition agreement and see that many of the things that we were analysing and assessing in our climate neutrality report had become part of the its plans. An important message from our study was that there is no silver bullet. You can’t do one major reform and then hope that everything will be done. Rather, the message from SEI Tallinn’s report was that reaching climate neutrality is a task requiring the collaboration of all ministries and partners, and that the government can support and stimulate the necessary investments.

If we look at the new coalition agreement, the list of actions it plans to take is long, which is positive. There is the pledge of phasing out oil shale – a very important step. There’s the promise of no additional fossil fuel investments by the government. There’s also the promise of solving the offshore planning issue, and new ideas about creating support programmes for municipalities to help them with their investments in reaching climate neutrality.

The agreement also includes the idea of starting to take into consideration the carbon footprint and circularity of materials used in public buildings, and, while changes are likely in the electricity sector, when it comes to the heating, transport and agriculture sectors, there’s a lot that the government can and should do to pursue climate neutrality.

In our climate neutrality study, we said that one significant actor is the land use, land use change and forestry sector (LULUCF). Since almost half of Estonia’s territory is covered with forests which act as a carbon sink, we currently have a very good buffer. But a key question for the government is what their strategy will be regarding forestry. Lately there have been huge debates in Estonia about what the felling rate should be and whether it’s still sustainable, as well as whether our forests still act as a carbon sink or we’re overutilizing our bio resources. Forestry is therefore definitely one of the crucial topics for the government, as they have also indicated in the coalition agreement that they plan to reduce and limit the pressure on felling, at least for the state-owned forests.

So, it remains to be seen how things work out, but many sectors mentioned in our climate neutrality report are also addressed in the new coalition plan.

Looking back at the last 30 years since Estonia regained its independence, the story has been one of continuously finding the courage to try new things and committing to building governance systems, for instance by developing e-governance solutions. I think it is important that Estonia has now made quite a strong pledge in terms of climate neutrality. It puts pressure and a spotlight on the government, but it also seems like the new coalition is comfortable with this and that they intend to deliver. Nevertheless, these issues are very sensitive; in most countries where you have geographically-focused fossil industries, for instance in Poland, Germany, or Spain, this remains a sensitive debate.

I think the lesson to be learned here is that you need to state the obvious – the solution is not to deny the truth. The world is changing, future economies and societies will be fossil free, and the sooner you say it out loud and start working on a positive plan for transformation, the better it is for everyone. Burying your head in the sand and then, at the last minute, going through a bumpy phase-out, without a clear plan, strategy or time buffer, when the world, energy markets and technologies have already changed, is not a better option. I think that’s an important takeaway from Estonia’s experience.

This remains to be seen. However, I would definitely say that the COVID-19 pandemic, and the economic downturn and turbulence that have come with it, have brought up or heightened tensions between the idea that we should try to keep using up fossil fuels, because at least they’re there, and the push for a green recovery and seeing this as an opportunity.

My feeling is that, even though people might think that currently it is necessary to hold on to old fossil industries, there is actually greater opportunity for transformation. While being stuck at home, we have had time to think about what is actually important for us, and what our values are. It has been a time for reconnecting a little bit with nature; at least, this seems to have been the case in Estonia.