KAUTE Talks Zero-carbon society webinar

3 perspectives on energy transition: How will the EU meet its 2050 emission targets?

In this KAUTE talks interview, Matti Rautkivi, Director of Strategy and Business Development at Wärtsilä, Miika Johansson, Business Unit Lead of Renewable Energy at St1, and Matti Liski, Professor of Economics at Aalto University School of Business, share their thoughts on building a zero-carbon society.

The EU Green Deal has set an ambitious target for total carbon neutrality by the year 2050. What are the most critical challenges we have to solve in order to reach that goal?

Rautkivi: “During COVID-19 pandemic, the worldwide emissions have dropped seven percent – we seized air traveling, ran down industries, and consumed less energy. To reach the 2050 goals, we have to cut the same amount of emissions every year. As we look into the future in a 30-year-perspective, everyone understands how massive the required changes really are. It’s critical to accept that we need to abandon our current system.”

Johansson: “From an energy company’s point of view, the biggest technological challenge is moving electricity in time and place – this hasn’t been achieved yet on an industrial scale. Cutting emissions alone isn’t enough, we also have to recover carbon dioxide from the atmosphere. The pricing of the emission reductions also needs work: for example a common emission marketplace would steer investments into more effective solutions. The fact is that investments in fossil-based energy still outnumber renewable energies globally. The EU now has a chance to drive investments into green rebuilding. However, the challenge there is to locate the projects, where we can get our act together quick enough.”

Liski: “Our current way of life is tuned according to certain technologies. When we challenge these technologies, we also challenge our ways of life. The question isn’t therefore only technological or economical, but also political. The crux of the matter is finding fair means to support the use of new technologies and, on the other hand, penalize the old. This is necessary because we don’t have enough leeway in our national economy to support living on supplementary benefits. Government allowances should be directed to even the costs between old and new technologies, for example based on habitation or socioeconomic status.”

France’s “yellow vest” protests are a fresh illustration of why not only setting a price for carbon, but also the distribution of costs, matters for outcomes. How should social justice be taken into account in the energy transition?

Rautkivi: “We should be looking for solutions on a local level. I understand well that abandoning fuel peat causes great opposition in areas where this form of industry provides local people their living. Individuals and companies have to have opportunities to partake in the change, without forgetting the extent of it all. Through dialogue, we have to bring alternative options for the locals that ,for example, allow the move from fuel peat to bioenergy.”

Johansson: “I hope that politics allow a fair change, where sustainable choices are always easier to make for the individual. We also need to plan and prepare for the changes well in advance. I’m aware that being a well-to-do person, who lives in one of the wealthiest states in the world, makes me largely immune to rising fuel prices. Us living in rich Western countries should acknowledge that climate change and eroding biodiversity can be stopped only if the majority of the world’s population jump on board.”

Liski: “In Finland we redistribute income through taxing and the same can be done with emissions. For example, pensioners could receive a standard compensation from the income that is collected from emission payments. When we clearly communicate how the energy transition benefits the people from the get-go, we can avoid the conversations that “the yellow vests” are trying to stimulate. Pricing emissions is a good way to influence consumer choices without authorities getting involved. We can automatically find the most economical choices for society and pass emission reductions.”

Shifting to a zero-carbon society will require fundamental changes to our traffic systems, energy production and housing policies. Can you tell us an example of a solution, which has the potential to drive the change?

Rautkivi: “In my opinion, electricity is the thing in traffic, housing, and energy production. The role of the consumers will grow in importance during the next generation. People are more aware of the emissions, and companies and brands are called for carbon neutrality. This will show further down the product life cycle. For example, when car manufacturers set out to diminish carbon footprints, it will cause ripple effects in the steel industry.”

Johansson: “About half of the world’s energy consumption and 40% of the carbon dioxide emissions come from heating. Geothermal energy is a local and scalable energy source—there’s practically endless amounts of renewable energy inside the crust of Earth. The Deep Heat project and EGS technology (enhanced geothermal energy) are examples of the solutions that can produce energy on an industrial scale without burning resources.”

Liski: “It’s important to find a solution that allows us to react quickly to new innovations and the shifting advantages they create between technologies. We have proposed an emission trading arrangement, which doesn’t address the chosen technology, but creates a certain price for the emissions and steers consumers to support the best technologies that time.”

It can take years for fundamental research to turn into actual practical solutions. Where should research focus next so that we would have more sustainable solutions in use in the 2030s and forward?

Rautkivi: “We should find ways to make sustainability an absolute value that is defended over electoral terms. How can a peat driver support a green economy in his investments without having to fear for a polar opposite political climate in the next few years? If we want to achieve emission targets, this challenge needs to be solved all around the world.”

Johansson: “Climate change and eroding biodiversity are such big challenges that they cover all walks of life. In the midst of these massive changes, we should remember that people’s basic needs have not changed since the times of Ancient Greek philosophers. Technology is the key to change, but societies together have to solve this crisis. The better we know how to use multidisciplinary perspectives in decision-making, the better chance we have of success. The future innovations are born when the brightest experts can work together to make cross-sectoral solutions.”

Liski: “We should acknowledge how to build the conditions that produce top innovations in Finland—it doesn’t happen simply by declaring our superiority in a given industry. Innovations are a result of persistent fundamental research and the right kind of environment for commercialization. Perhaps the single most important thing is to attract world-class talent to come to work in Finland. Universities and other actors hiring top professionals should communicate that one can live a good life here and have good professional working conditions.”

Aalto University and KAUTE Foundation invite you to an online event on Wednesday 7 April 2021 at 9.00–10.30. In the event, the interviewees continue their discussion on a zero-carbon society. Read more and register here for the event!

KAUTE talks x Aalto University is a new webinar series bringing together representatives from the industry and academia, to discuss and learn about world-shaping phenomena of our time through focused and thought-provoking presentations. This event is produced in cooperation with KAUTE Foundation.