Transition to Carbon Neutrality: Implications for Productivity, Competitiveness and Investments


In light of Finland’s commitment to carbon neutrality, this project examined the implications of the green transition on its economy, outlining the complex relationship between environmental regulations, structural change, and productivity, while emphasizing the crucial role of green investments.

The main findings can be summarized as follows: 1) Environmental regulations have diverse effects on firms and the overall economy, leading to adaptations and triggering changes in market dynamics. 2) The effect of structural change on productivity is complex, highlighting the need to improve the productivity of continuing firms. 3) Finland’s carbon intensity aligns closely with the EU average, with improvements in most industries, but challenges persist in certain industries. 4) Financing the green transition is complex due to uncertain future investments, potential government intervention reasons, and sector-specific challenges.

Finland’s successful green transition relies on stricter environmental regulations, efficient carbon pricing, and the promotion of green technologies, supported by customized regulations and sustainable consumption. Additionally, it necessitates a consistent environmental policy, a long-term investment strategy, increased green technology R&D, and support for startups to foster innovation and sustainability.

Publications of the Government’s analysis, assessment and research activities 2023:62.

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Förnyelse av företag
Carbon neutrality, Environmental policy, Green transition, Productivity
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Publications of the Government’s analysis, assessment and research activities 2023:62
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