Climate Resilient Economy Act

The draft Climate-Resilient Economy Act and its explanatory memorandum are under debate at government level.

As a result of public consultation and co-ordination with other ministries, more than 900 amendments were proposed. The Ministry of Climate Change introduced the additions in a balanced manner and the law will now be further discussed by the government.

Climate change has an impact on our lives that is at least as significant, but also more long-lasting, than an economic crisis or war.

The more the climate warms, the more widespread the impacts on Estonia’s nature, people, infrastructure and economy will be: species extinctions will accelerate, areas that are (seasonally) uninhabitable for people will expand, migration will increase and extreme weather events will become more frequent.

According to a report by the World Meteorological Organisation, there is an 80% chance that, in at least one of the next five years, the global average annual temperature will temporarily exceed 1.5 degrees Celsius above pre-industrial levels. This stark warning highlights that we are moving further away from the targets set in the Paris Agreement on climate change. The draft Climate-Resilient Economy Act is based on the targets set by the European Union, which are aligned with the Paris Agreement. This ensures that Estonia’s contribution to mitigating climate change is fair.

A smaller environmental footprint is a competitive advantage

Export and financial markets favour green business models, so we must take the initiative to turn our smaller environmental footprint and climate-friendly economy into a competitive advantage. Change is inevitable, but it is up to us to seek and embrace the opportunities it brings. Transitioning sectors to climate neutrality presents opportunities for the development and export of new technologies. This is why we are increasingly directing funds towards the development of new technologies.

The Climate-Resilient Economy Act creates the conditions for the development of a more sustainable economic model for Estonia. The end result will provide the Estonian society with a clear and reliable environmental regulatory framework and objectives. These will support long-term decision-making and investments and foster the creation of new services and jobs that give our economy a stronger competitive edge and help it grow.

The Climate-Resilient Economy Act:

• Establishes specific climate targets for each sector and across sectors for the years 2030, 2035, 2040 and 2050.
• Outlines the principles upon which climate change mitigation and adaptation will be based.
• Ensures legal certainty for the fulfilment of climate goals and for the development of strategies for companies and organisations.
• Consolidates the financial resources required to achieve climate policy objectives under a single management.
• Defines a timetable that outlines the pace of progress, allowing sufficient time for adaptation to the Climate-Resilient Economy Act and related activities as well as EU reporting requirements.
• Ensures that both the drafting and implementation of the Act are considerate of all parties and inclusive of all target groups.
• Lays the foundation for a more environmentally sustainable economy and a stronger competitive advantage.