Competitive logistics must be assured on the journey towards carbon-free transportation
The report published by the Intergovernmental Panel on Climate Change (IPCC) in autumn 2018 sent a clear message to the world that global climate policies need to become significantly more ambitious. This is essential if the rise in the average temperatures around the world is to be kept under two degrees in line with the Paris climate agreement, which seeks to limit temperature rises to 1.5 degrees by 2050 in order to mitigate climate risks.
The IPCC’s report raised widespread attention. It has enhanced the understanding of global warming and the urgency of emission reductions among decision-makers and companies. In Europe, the IPCC’s message received plenty of attention. The EU is already negotiating the means by which Member States can achieve carbon neutrality by 2050.
In Finland, one major way of reaching this target is to switch to carbon-free transportation by 2045. If there is any hope of reaching the emission reduction targets in the area of transportation, people will need to use public transport and ride-sharing services substantially more in the future, and they will also need to cycle and walk more. In the area of passenger transport, the targets can only be reached if the cars on the road can be rapidly replaced by emission-free or low-emission vehicles. The proposed means to this end include exempting emission-free electric cars from vehicle tax, road tolls based on distance travelled, gradual increases in taxes on fossil fuels and banning the sale of fossil fuels in 2045.
Elinkeinoelämän kilpailukykyä ei ole syytä kuormittaa liian kunnianhimoisilla kansallisilla tavoitteilla.
The solutions proposed for reducing carbon dioxide emissions in the freight logistics sector in Finland require logistics chains to become more efficient by means such as digitalisation and sharing shipment information. The energy efficiency of land vehicles, sea craft and aircraft also needs to be continuously improved, and these vehicles should increasingly switch to renewable biofuels. In line with the principles that the “polluter pays” and the “user pays”, the civil servants at the Ministry of Transport and Communications have proposed the introduction of a road toll based on the distance travelled by heavy goods vehicles, as well as other taxation measures to nudge heavy traffic towards alternative fuels such as biogas and electricity.
Among these proposals, the road toll based on distance travelled is challenging for Finnish business. Finland is a large, sparsely populated country. A road toll based on distance travelled would be liable to increase the overall cost of freight logistics, as it is often impossible to switch to more environmentally-friendly rail transportation without major additional investments in improving rail logistics.
Climate change is the greatest challenge that humanity is currently facing, and we absolutely must win the battle against climate change. However, decision-makers should not forget that the international competitiveness of Finnish business must always be assured on the journey towards carbon-free transportation. If businesses are uncompetitive, it will be difficult to reach other important goals such as maintaining a good education system, high rates of employment and good elderly care and social services.
Climate change is a global problem and it will need to be addressed with global solutions. For this reason, it is important to be aware that neither Finland nor even the EU can solve a global problem alone – and there is no reason to encumber the competitiveness of business with excessively ambitious, unilateral national goals. Finland should take care of its own obligations and commitments as an international actor, and it should focus on driving ambitious climate targets on an EU and global level.
The author is the Managing Director of the Finnish Freight Forwarding and Logistics Association and the logistics sector manager of Service Sector Employers PALTA.