The winners of Vuoden Tiedekynä Award challenge Finland towards ecological reconstruction

Kone Foundation has awarded the Vuoden Tiedekynä Academic Writing Award to Tero Toivanen, Paavo Järvensivu and Ville Lähde for their article “Ekologisen jälleenrakennuksen haaste” (“The Challenge of Ecological Reconstruction”). The authors call for an ecological transition policy for Finland, comparable in scope to the economic, social and cultural renewal of the post-war years.

The article reveals how the world’s rich countries have failed to launch an effective sustainability transition that would truly curb climate change and other serious environmental crises. Global emissions have continued to rise, biodiversity is in decline, and sustainability goals have been subordinated to policies that pursue economic growth.

According to Toivanen, Järvensivu and Lähde, the sustainability transition will require governments to change course dramatically so that economic growth can no longer be a top priority. In order to maintain safe living conditions on the planet, economic and social policy should focus on achieving a rapid transition to a sustainable way of living.

“Instead of discussing how to reform our economy and industry in line with ecological and social goals, the economic policy debate in Finland is dominated by one-sided talk of a rising debt ratio and the need to cut back and save. This makes the economic debate remarkably visionless,” says Toivanen.

One of Finland’s largest awards for academic writing

The aim of the Vuoden Tiedekynä Award is to support and increase the appreciation of academic writing in Finnish. The €25 000 prize, which has been granted since 2010, is one of the largest awards for academic writing in Finland. The award is given on a rotating basis to an author or authors of a Finnish-language article in the humanities, social sciences, and environmental research.

This year’s winner was chosen by Alli Pylkkö, law student and Nature Delegate 2022–2023 of The Finnish National Youth Council Allianssi.

“The winning article provides a comprehensive overview of one of the most fatal contradictions of our time: the impossibility of an ecological transition through the policies of economic austerity and economic growth. The text is an exceptionally enjoyable read thanks to its clear, varied, and dispassionate expression. Insightful metaphors add colour to the text,” says Pylkkö, explaining their choice.

The article is published in the book Talouskuri tuli Suomeen (2023), published by Vastapaino and edited by Janne Autto.

Researchers Tero Toivanen (PhD), Paavo Järvensivu, D.Sc. (Econ.), and Ville Lähde (PhD) are members of the interdisciplinary BIOS Research Unit which foresees socio-ecological changes that will affect our society deeply. Toivanen is also Core Fellow at Helsinki Collegium for Advanced Studies.

Ecological transition policy cuts across society

Over the next couple of decades, societies will need to implement a planned sustainability transition across all sectors of society. Toivanen, Järvensivu and Lähde call this an era of ecological transition policy.

At its core is the metaphor of reconstruction: after the Second World War, the infrastructure and industries of societies were systematically reformed, while reforms in social welfare, healthcare and education laid the foundations for a welfare state in Finland. The state played an important role in steering economic policy.

Today, the task of ecological reconstruction is to reform energy production, industrial production, housing, transport and food production in a way that allows a rapid and planned transition away from fossil fuels and over-exploitation of natural resources, while maintaining equal access to conditions for a good life.

“The sustainability transition must be tailored to the specific circumstances of each country, i.e. environmental conditions, economic structure, available resources and cultural history. The research debate arising from these specific circumstances will inevitably have to be conducted in national languages, and the research must be multidisciplinary,” Toivanen says.

From austerity talk to an active transition policy

“We wrote the article largely in the immediate aftermath of the covid pandemic. At the time, there was a broader debate about the ability of societies to change the direction of the economy if they so wished, and about the role that the state could play in steering the economy. This ‘spirit of the time’ is also reflected in our article. We describe how economic policy could be guided by an active ecological transition policy, and how narrow austerity thinking could be consigned to history,” Toivanen says.

In the article, the authors argue why ecological reconstruction and economic austerity cannot go smoothly hand in hand: rigid economic austerity cripples the possibilities of economic policy at a time when its active role is needed more than ever. While the competition state has focused on spending discipline, cost-cutting and scarcity of public resources, the transition policy places the state in the role of active investor, funder and economic facilitator.

“From this perspective, the policy of the current Finnish government seems like a return to the past. It also shows how quickly even promising openings for alternative economic policies can be shut down politically.”

One positive development, Toivanen notes, is the emergence of industrial policy in the political debate, particularly in the US, where significant green transition reforms have been achieved – although, on the whole, economic development in the US is far from an ecologically sustainable transition.

“Unfortunately, Finland and the European Union have largely followed the return of industrial policy from the sidelines, and in Finland the attitude towards active economic governance has been mainly dismissive. Without an active industrial policy, Finland’s economy, on the outskirts of Europe, risks being stifled while we maintain outdated, high-emission and resource-intensive industrial and consumption systems,” Toivanen continues.

Five indicators for transition policy

In recent decades, green growth has been offered as a way to achieve a sustainability transition. The basic premise with green growth is that environmental impacts will decrease while the economy grows. However, studies show that this has not happened fast enough, comprehensively enough or persistently enough. Green growth is still dominated by abstract goals of GDP growth, employment rates and fiscal sustainability gaps, which makes it easy to end up increasing any kind of production, employment and consumption, regardless of their environmental impact.

Instead, in the article by Toivanen, Järvensivu and Lähde, transition policy is measured by monitoring carbon balance, total resource use, fiscal sustainability, transitional employment and social resilience.

Finland’s emissions and carbon sinks should be in balance, i.e. zero net emissions, by 2035, after which the carbon balance should turn negative. Total resource use in Finland, on the other hand, should be reduced to about one third of its current level by the end of the century. Both carbon balance and resource consumption need to be monitored as closely as GDP growth and employment rates are currently being monitored.

It is important for the nation implementing the transition policy to maintain its ability to meet its fiscal obligations in order to finance necessary investments and safeguard long-term fiscal sustainability.

The idea of transitional employment, on the other hand, differs from the employment mindset of economic austerity, where the solution to unemployment is to increase labour supply by cutting social security and relying on the private sector to create new jobs, for example. Transition policies aim to shift employment towards sustainable and reconstructive tasks. Investment policy will feed demand in the economy, which will also benefit private business activities in line with the reconstruction process.

The final indicator for transition policy is social resilience. Important aspects include social polarisation, citizens’ access to resources and the democratic distribution of power.

“The most important thing that the state could do to promote a sustainable transition is to introduce a new form of science-driven planning to support democratic decision-making and business development. Science-driven planning could provide an up-to-date snapshot of the needs for change in industrial systems and the paths of change that would lead to sustainable use of energy and natural resources, but also to building successful industries and businesses in Finland for the future. On this basis, we have proposed the establishment of a concrete science-driven planning unit in the Prime Minister’s Office. The mandate of the planning unit would be a multi-sectoral one, and the unit would produce a constantly updated snapshot of industrial renewal in a multilateral dialogue. It would serve policymakers, businesses and citizens. It would enable a quality public debate on the sustainability transition”, Toivanen concludes.

Read the article (in Finnish)