## Building Back Better ## Source details **Canonical URL:** [Building Back Better](https://www.imf.org/en/publications/fandd/issues/2021/09/finland-dominica-innovation-climate-change-dorst) ## Other formats - [Markdown version](/en/publications/fandd/issues/2021/09/finland-dominica-innovation-climate-change-dorst/index.md) - [Structured JSON version](/en/publications/fandd/issues/2021/09/finland-dominica-innovation-climate-change-dorst/index.json) - [Bundle manifest](/en/publications/fandd/issues/2021/09/finland-dominica-innovation-climate-change-dorst/bundle-manifest.json) ## Bibliographic details - 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.* --- ## Content in this bundle - **إعادة البناء على نحو أفضل** - [إعادة البناء على نحو أفضل (Markdown version)](/-/media/files/publications/fandd/article/2021/september/ar/dorst.pdf.md){rel="alternate" type="text/markdown"} - [إعادة البناء على نحو أفضل (PDF)](/-/media/files/publications/fandd/article/2021/september/ar/dorst.pdf){rel="external" type="application/pdf"} - **Reconstruir mejor● Finanzas y Desarrollo ● Septiembre de 2021** - [Reconstruir mejor● Finanzas y Desarrollo ● Septiembre de 2021 (Markdown version)](/-/media/files/publications/fandd/article/2021/september/es/finland-dominica-innovation-climate-change-dorst.pdf.md){rel="alternate" type="text/markdown"} - [Reconstruir mejor● Finanzas y Desarrollo ● Septiembre de 2021 (PDF)](/-/media/files/publications/fandd/article/2021/september/es/finland-dominica-innovation-climate-change-dorst.pdf){rel="external" type="application/pdf"} - **Building Back Better - IMF F&D** - [Building Back Better - IMF F&D (Markdown version)](/-/media/files/publications/fandd/article/2021/september/finland-dominica-innovation-climate-change-dorst.pdf.md){rel="alternate" type="text/markdown"} - [Building Back Better - IMF F&D (PDF)](/-/media/files/publications/fandd/article/2021/september/finland-dominica-innovation-climate-change-dorst.pdf){rel="external" type="application/pdf"} - **Reconstruire en mieux** - [Reconstruire en mieux (Markdown version)](/-/media/files/publications/fandd/article/2021/september/fr/finland-dominica-innovation-climate-change-dorst.pdf.md){rel="alternate" type="text/markdown"} - [Reconstruire en mieux (PDF)](/-/media/files/publications/fandd/article/2021/september/fr/finland-dominica-innovation-climate-change-dorst.pdf){rel="external" type="application/pdf"} - **Как построить лучше, чем было – Финансы и развитие – Нельзя терять время– сентябрь 2021 года** - [Как построить лучше, чем было – Финансы и развитие – Нельзя терять время– сентябрь 2021 года (Markdown version)](/-/media/files/publications/fandd/article/2021/september/ru/dorst.pdf.md){rel="alternate" type="text/markdown"} - [Как построить лучше, чем было – Финансы и развитие – Нельзя терять время– сентябрь 2021 года (PDF)](/-/media/files/publications/fandd/article/2021/september/ru/dorst.pdf){rel="external" type="application/pdf"} - **重建更美好 - 金融与发展 - 国际货币基金组织季刊 2021年9月号·第58卷·第3期** - [重建更美好 - 金融与发展 - 国际货币基金组织季刊 2021年9月号·第58卷·第3期 (Markdown version)](/-/media/files/publications/fandd/article/2021/september/zh/dorst.pdf.md){rel="alternate" type="text/markdown"} - [重建更美好 - 金融与发展 - 国际货币基金组织季刊 2021年9月号·第58卷·第3期 (PDF)](/-/media/files/publications/fandd/article/2021/september/zh/dorst.pdf){rel="external" type="application/pdf"} --- _Source: https://www.imf.org/en/publications/fandd/issues/2021/09/finland-dominica-innovation-climate-change-dorst_