Building Back Better
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- Authors: STEVEN DORST
- Published: September 2, 2021
Finland’s wood innovations
- Objective and strategy
- Finland has set an ambitious target of becoming carbon neutral by 2035.
- The country shifted strategy toward replacing fossil-based chemicals and materials (plastic, concrete, and steel) with renewable raw materials such as wood and bio-based materials.
- Finland introduced the first carbon tax in 1990.
- Natural and legal endowments
- 65 percent of Finland’s land is covered by forests.
- Finland’s Forest Act mandates that four trees be planted for every tree harvested.
- Economic and environmental rationale
- Wood-based products can be recyclable, biodegradable, and hypoallergenic, with CO2 stored in cut wood for decades and even centuries.
- Many wood-based products are made from production by-products and residues or from materials recovered after product use.
- In a “circular bioeconomy,” products are bio-based, shared, reused, remanufactured, recycled, biodegrade, or are used for renewable energy.
- Industry perspectives (direct quotes)
- “Replacing fossil fuels and materials such as plastic or concrete and steel used for building with wood and bio-based materials limits the carbon emissions to the atmosphere,” — Lotta Heikkonen, chief specialist with Finland’s Ministry of Agriculture and Forestry.
- “They are also being shared, reused, remanufactured, and recycled. Finally, they biodegrade or are used for renewable energy. Trees grow back, absorbing CO2, and so the cycle continues.” — Timo Heikka, vice president of stakeholder relations at Stora Enso Oyj.
- “This is where molecular wood-based biochemicals play a key role.” — Jyrki Ovaska, Chief Technology Officer, UPM.
- Policy needs and IMF engagement
- Although carbon emissions in Finland are already subject to significant pricing, additional measures are needed to achieve the 2035 emissions neutrality goal.
- The IMF is working with Finland on additional energy pricing and sectoral measures to help bridge the gap.
- Limitations noted
- Biomass alone cannot replace all materials produced from fossil and mineral sources.
- The wood-based approach may not work for all countries due to climate differences and trade-offs between agriculture and tree growth.
Dominica develops resilience
- Context and motivation
- Dominica is a Caribbean island situated in “Hurricane Alley,” with rugged topography, dense mountain rain forests, nine active volcanoes, and most of the country’s 72,000 denizens living along the coast.
- Extreme climate events have grown more frequent and severe.
- Crisis trigger and response
- In 2017, Category 5 Hurricane Maria caused $1.2 billion in damage in just a few hours.
- Post-Maria, building back better and becoming a more resilient nation became the government’s central mantra.
- Costs, benefits, and financing challenges
- Rebuilding to climate-resilient standards would cost 25 percent more than traditional methods.
- The country had suffered damages totaling 226 percent of GDP.
- Benefits of resilience investments materialize only over time, complicating financing choices.
- Evidence of effectiveness
- The airport, made operable after 2015 Tropical Storm Erika by building back better, was up and running a few days after Hurricane Maria.
- Communities rebuilt to new resilience standards remained intact after Hurricane Maria.
- Strategic priorities and investments
- Upgrading and expanding the road network, including raising bridges to allow for water and debris overflow.
- Building resilience into the housing sector.
- Upgrading hospitals and health centers.
- Supporting resilient agriculture for food security, education, reforestation, and community preparedness training.
- Equity and international dimensions
- As a small island state that did not cause global warming, Dominica bears disproportionately the costs of adapting.
- “If we want to make a meaningful contribution to helping small states adapt to climate change, then the international community needs to step up,” — Francine Baron, CEO, Climate Resilience Execution Agency for Dominica.
- Dominica aims to become the first climate-resilient nation by 2030.
- IMF collaboration
- The IMF worked with Dominica to understand probabilities and intensities of natural disasters, and the costs and benefits of building to new standards, informing a new framework and strategy.
Comparative insights and policy implications
- Different objectives, shared urgency
- Finland’s focus: mitigation through substitution of fossil-based materials and carbon sinks.
- Dominica’s focus: adaptation and disaster-proofing infrastructure and communities.
- Common elements for effective climate action
- Ambitious targets (Finland: carbon-neutral by 2035; Dominica: climate-resilient by 2030).
- Use of local comparative advantages (Finland’s forest resources; Dominica’s targeted resilience investments).
- Evidence-based planning and international technical support (IMF engagement in both cases).
- Policy recommendations implied by the cases
- Scale incentives and pricing mechanisms to reflect carbon externalities (Finland: additional energy pricing and sectoral measures).
- Invest in resilient infrastructure standards even if upfront costs are higher (Dominica: 25 percent higher cost but demonstrable benefits).
- Leverage circular bioeconomy principles where biologically renewable resources are abundant.
- Mobilize international support for small states facing disproportionate adaptation costs.
Key statistics and facts (verbatim)
- 65 percent (forest coverage of Finland’s land)
- four trees be planted for every tree harvested (Forest Act mandate)
- carbon neutral by 2035 (Finland target)
- first country to introduce a carbon tax, in 1990
- cut greenhouse gas emissions by about a fifth
- 72,000 (Dominica population)
- Category 5 Hurricane Maria, 2017
- $1.2 billion (damage from Hurricane Maria)
- rebuilding to climate-resilient standards would cost 25 percent more
- damages totaling 226 percent of GDP (Dominica)
- become the first climate-resilient nation by 2030 (Dominica goal)
- September 2021 (publication date)
Source: Building Back Better — STEVEN DORST, F&D Magazine, September 2021.
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