Prime Minister Matti Vanhanen at Tsinghua University

TOWARDS A GREENER FUTURE

Ladies and Gentlemen,

I would like to start with a well-known saying: "Recognising the truth is the beginning of all wisdom". This is something that we will have to bear in mind when we speak of a greener future.

Some would argue that in life, size matters. And China of course is a very sizable country. But in my view, what truly matters is the size of our ideas, and the extent of our deeds. In this important perspective, Finland and China are two countries with many similarities.

The challenges facing us appear daunting. The world economy is in deep crisis. We are in dangerous waters where our navigation charts are no longer valid. As financial and economic disruptions strike like waves at our societies, we must strengthen our resolve to keep a steady course to calmer seas.

In the past, Finland has overcome many difficulties. From relatively poor conditions, through determination and sacrifice, we achieved independence and became an industrialised nation. Size and power were not decisive in securing prosperity and security for our people. What mattered were strong values, knowledge and skill.

As an open economy, Finland has benefited from the growth of the world economy and trade. With the present turn of events, we are vulnerable, as are many countries, due to our specialisation in the production of investment goods and services. Finland alone cannot turn the tide, nor can we alone hold off the recession where the storms of the world's economy have taken us. These are realities that we must acknowledge.

It is now time to look at the future.

As the great questions we are facing stand clear before us, Finland and China will each confront them accordingly. Today, we must ask what we together can do to provide the answers to our common challenges.

In the midst of the economic crisis, the basic rule of crisis management is the following: The longer one postpones action based on reality, the deeper the crisis will become.

These words of wisdom hold true for the financial sector as well as for securing the long-term goals of the economy as a whole.

In the aftermath of the storm, the sun will surely shine. Globalisation will continue. There will be ever more competition in the form of lower costs and increased use of high technology, but also more co-operation in production and more customers. In order to succeed, we must focus on our competitive advantages. Here, again, knowledge and skill are the instruments that we must use wisely.

We need energy.

Good energy management is a foundation of every society. If energy management is bad, the society suffers, and at the extreme even runs the risk of falling apart. There are several examples of such events in human history. Energy management is not a constraint of development; we can help economic development through good energy management. This is an important basic function of society.

In Finland, a large part of energy goes into heating. In China, the situation is different: ventilation and cooling are among the major energy consumers.

Comfort is costly. In the modern age, China has used models developed in societies that were first to industrialise. But making rooms and houses comfortable, warm and livable using current technologies can be done in much more effective ways than it is done now.

One must have a holistic view of energy use, construction, and societal development. If one focuses on some specific topics, such as traffic or industry, it is easy to forget that there other, very significant consumers of energy; such as construction and buildings.

Traffic and industry are becoming more effective, but the construction sector on the whole is not keeping up with those increases in energy efficiency. There is much energy to be saved in good urban, residential as well as industrial infrastructure master planning.

My business delegation on this visit to China includes top directors from several leading Finnish companies that contribute to energy- efficient green living.

Kone Corporation is a leading manufacturer of elevators and human transportation solutions. Kone has several high profile projects here in Beijing. For example, the elevators of Beijing’s airport terminal, and the new Opera House. When moving up or down, pay attention, it is quite probable that you are being carried by a Kone elevator or escalator.

Cargotec is a leading company which provides environmentally friendly lifting equipment for China’s rapidly expanding logistics industry.

SRV Group is an innovative construction company that has recently constructed some of the largest urban projects in Finland, and has many operations abroad.

DigiEcoCity company is doing something new. The company combines digital and ecological city-planning concepts and technologies into a new kind of city. The aim is to minimise the ecological footprint of a city while maximising living comfort and economical viability. Ecological city development is especially important for China.

You know Nokia, and you know Siemens. Nokia Siemens Networks combines the forces of these companies into a world leader in mobile and fixed line communication technologies.

UPM is one of the leading forest and paper products companies in the world. In China, UPM has invested in a modern, large-scale paper mill and R&D center in Changshu, Jiangsu Province. UPM has had contacts with Tsinghua since 2000, especially in the environmental field. Since 2007, UPM is also a member of the Tsinghua University Industry Cooperation Committee.

Another member of the University Industry Cooperation Committee at Tsinghua University is Tekes, the Finnish Funding Agency for Technology and Innovation. Tekes is a cornerstone of Finland’s national innovation system, allocating state funds to risky, innovative R&D projects in Finland. Chinese businesses that are established in Finland are also eligible to apply for Tekes funding. Tekes is currently working towards strengthening cooperation with your university. We also have Tekes representatives present here today. There are many levels of cooperation that Tekes is interested in: R&D projects, researcher mobility, as well as student exchange. We hope that Tsinghua University finds fruitful ways for our cooperation through Tekes.

Finnair, Finland’s national airline, is one of the oldest airlines in the world, established in 1923. Finnair has a fleet of modern planes, and flies the shortest route between Asia and Europe. The flight time from Beijing to Helsinki is just over 7 hours. Helsinki is the closest to Beijing of all European airports.

For you, students of Tsinghua, these companies may also be your future employers.

There is also another way of building contacts with Finland. In the audience today we have a representative of Helsinki University of Technology who brings you greetings from the university world in Finland. We are establishing a new innovation university, called Aalto University, in honour of the Finnish architect Alvar Aalto. Many of you, especially those who are studying architecture, may know him.

Finland warmly welcomes you to study at our top universities. Finland’s Center for International Mobility, or CIMO, has just recently established an office in China. You may be in touch with them to find out about study possibilities in Finland.

Ladies and Gentlemen,

Let me get back to the main subject of this talk, Green Future.

As I stated a moment ago, we need energy.

But - the largest contributions to man-made green house gas emissions come from power generation, fuel used for transportation, and deforestation. Globally, the use of fossil fuels has continued and will continue to be the main source of power, at least in countries where it is readily and economically available. But we must seek wisdom in our ways.

Climate change is a threat, but it is also an opportunity. I understand that the Chinese terms for crisis and opportunity are quite similar.

It is not possible to have an effective climate change policy without changing the way we provide for our energy. Meeting the twin challenges of energy and climate change therefore requires that we change the way we use energy. Needless to say, China is here in a key position, and we would strongly hope that China sees this as an opportunity.

Meeting the challenges of climate change is our common responsibility towards ourselves, and for our future generations. Our goals must be both ambitious and achievable. The current economic crisis must not mean that we will decrease our investments in climate change mitigation and environmental protection.

We must understand the essential reasons why we must act now to meet the very real challenges of climate change. In doing so, we must not become distracted by the many issues, such as the cost of protecting the environment or providing for renewable energy.

These are understandable concerns, but continuing on the current path and fixing the damages caused by climate change would result in even higher costs in the future.

Let us also see the other side of the coin.

It is possible to meet the challenges of climate change, and benefit from the business of doing so. As we seek results, it pays to focus on those activities achieving the greatest benefits. All action to limit climate change is important but some action is more effective than others.

Finland's energy and climate change strategy is in line with the EU's policy of 20-20-20. This involves a minimum twenty percent reduction in greenhouse gases by the year 2020, as well as a minimum use of twenty percent renewable energy, and an increase of twenty percent in energy efficiency.

For Finland, the goal is to achieve thirty-eight percent renewable energy by 2020.

Finland will continue to use less fossil fuels and continue to develop into a society more ecologically, economically and socially sustainable. We need a strong vision on how our people will earn their living in a less carbon-dependent country. We must evaluate our means of production, how we live, our products and services, and how we spend our free time.

In meeting our energy strategy, promoting infrastructure is essential. Government provides public infrastructure, and, ultimately, companies make the market investment decisions.

Finland’s limited natural resources, tough climatic conditions as well as energy and resource-intensive industry have compelled Finland to develop her expertise in sustainable technologies with built-in understanding of clean nature. Finland, despite her relatively small size, has developed world-leading expertise in certain cleantech areas. Under the brand of 'Cleantech Finland', Finnish cleantech enterprises are globally valued partners.

We need a greater understanding of how green technology and innovation will serve as the engine of economic growth while simultaneously curbing global warming. Beyond the daily challenges of business, economic developers need to have innovation, technology and competitiveness as their beacon.

I know that China is putting a lot of effort in environmental questions, technologies and planning. Perhaps because of the challenges that China is facing, and the decisive action that is needed to overcome those challenges, China now stands a good chance to become a leader in the environmental revolution.

We must avoid the mistake of simply extrapolating from past models of economic and societal development. The variables and the formulas have changed. For example, decreasing our dependence of fossil fuels at the global level is not a choice, it is a necessity.

Energy saving and energy efficiency are the best sources of energy. In Finland, heating accounts for a fifth of our total energy use. Improving the energy efficiency of buildings and industry is clearly a priority. Finland is a world leader in co-generation of industrial power and district heating.

Energy efficiency and energy management are paradigms that can take us a long way, even when using currently existing technologies. We have many conservative factors in our societies that stand in the way of adopting new technologies and solutions, but new standards and regulations can guide the development towards more innovative solutions to our common problems.

Finland and China are working together on practical information and communication technology (ICT) solutions to help the transition to a low-carbon economy. A report by the Climate Group, the so-called SMART Report, concluded that ICT is a high-impact sector in the global fight to tackle climate change.

1. The ICT sector’s current two percent share of carbon emissions from global energy use will more than double from 0.5 gigatonnes to 1.4 gigatonnes by 2020.

2. ICT’s role in monitoring, optimising and managing domestic and industrial energy usage could save nearly €600 billion in 2020.

3. SMART 2020 identified savings of 7.8 gigatonnes of CO2 equivalent that could be delivered by ICT solutions in 2020 – FIVE times the sector’s carbon footprint and fifteen percent of global emissions.

4. In addition to the SMART group report, I would like to point out the potential uses of information and communication technologies in education, in shaping the thoughts and actions of people. More education should mean more energy efficiency, less emissions, and more innovative ways and channels to increase resource efficiency in society. ICT is a platform on which many kinds of systems for education and intelligent resource allocation can be built.

Green technology involves information technology, biotechnology, nanotechnology and energy technology. Pursuing innovations through research and development in these sectors will improve international competitiveness and increase trade in related sectors such as buildings, power transmission and distribution, and factories.

In transport, the race is on to seek ecologically sound technological solutions, notably hybrid and electric-driven automobiles, as well as more efficient biofuels.

Finnish and Chinese researchers and companies, within the Finnish Environmental Cluster for China together with the DigiEcoCity programme, are pursuing joint efforts in renewable energy, energy efficiency, water resources, waste management and environmental monitoring.

The Finnish DigiEcoCity consortium introduced the digital ecological city concept to China already a few years ago, and the word “DigiEcoCity” was introduced to China and the world by the Finns in 2008. Since then, this brand has gained considerable popularity.

DigiEcoCity is in Chinese “shu zi sheng tai cheng”.

I personally strongly favour decentralised development in regional planning. I admire regional structures based on human scale, where as many people as possible may go about their daily lives by walking or bicycle. This has been the tradition in Finnish society, where social cohesion is measured from the perspective of the daily life of individual citizens and families.

On 13th April 2009, the newspaper China Daily ran an article whose title was “The urban boom should spread to the countryside”. The article introduces policies to build smaller cities and development programs for urban and rural areas.

This is not only a Chinese phenomenon. There is a global dialogue going on between the concentrated development of urban hubs vs. forces that drive for decentralisation. The optimal balance is probably found somewhere in between the extremes. The development of small, ecologically and economically viable, connected cities can perhaps be a strategic solution for China. The hundreds of millions of rural residents who are seeking new urban lifestyles could perhaps find their new communities and lifestyles in small cities. With the advance of information technologies, physical location has lost its significance to such an extent that the attraction of rural people moving to megacities is not as strong as it used to be.

In future, it is important that home, work and services are close to each other. And the best way to do that is to have relatively small towns and cities. I call them “garden cities” – ecocity is a good new name.

Be the solution centralisation or decentralisation, we are right NOW at a crossroads in deciding the ecological future of our countries, and of our planet. It is important that we do not get caught up in “business as usual”. Regulations, business models and habits must change. Changes must be carried out in a courageous, rational and scientific way so that we can substantially change the current wasteful paradigm of economic development and living.

There are many factors in society, in business, in politics as well as in simple regulatory environment, that stand in opposition to adopting new, rational and efficient solutions to our societal and environmental problems.

We politicians do have a decisive role in this situation. It takes courage and decisive action to move from “business as usual” to new modes of operation that can solve the bottleneck questions and better address the environmental challenges we are facing.

China is devoting considerable stimulus funds to green measures. I support the EU and Chinese initiative to develop low-carbon cities and territories in China. Such decisions by Chinese authorities may well enhance green growth in these areas at a rate faster than would otherwise be possible at the national level.

We Finns are very eager to make our contribution and lead by example. As I said in the beginning of this speech, what truly matters is the size of our ideas, and the extent of our deeds. If we see what needs to be done, we must decisively act on that vision.

Investments targeting renewable energy and energy efficiency will create green jobs and ecologically sound infrastructure. Smart electricity grids are more efficient, allowing a quick balance of electricity supply and demand, and eliminating the need for large numbers of fossil fuel plants on standby, generating excess emissions. This will set the world on the course we need towards low-carbon growth.

Ladies and Gentlemen,

There are those who voice concern that the world's economic crisis may affect the interest of nations to reach an international agreement to limit climate change. I strongly believe we can simultaneously achieve economic growth and address climate change. Indeed, I am convinced that we must act now to do so.

The Finnish Government is determined of the necessity to reach such an agreement. We seek worldwide goals limiting the harmful effects of global warming. The proper time to do so is during the meeting of Heads of State and Government in December of this year at the Climate Change Conference in Copenhagen.

The new climate accord will have to address the special needs of the most vulnerable developing nations. They have contributed the least to global warming, but suffer the consequences the hardest.

I am convinced it is in the interest of China and Finnish investors to work together. This will improve our competitive advantage and create new green jobs. It would be better for everyone, Chinese and all countries, if we engage in a global collaborative effort to lower carbon emissions.

This is a wise path to follow.