The coronavirus pandemic has given us a wake-up call to examine the crisis tolerance of our society and reflect on our future after the crisis.
Author: Tiina Väänänen
Right now we are faced with fundamental questions. Will we return to our old practices after the vaccination or will we be facing a new normal once again? Will there be new crises around the corner to cause similar turmoil in our society as Covid-19? The European Supreme Audit Institutions (SAIs) have been considering these questions in order to support Europe in the building of a more sustainable future.
Long-term planning helps us solve several crises in one go
Our society is facing several long-term challenges, such as the climate change and the recovery of the world economy. However, risks can be managed in advance, even though it may seem difficult or even impossible.
The coronavirus pandemic is an excellent example of a suddenly realized risk that had hardly been foreseen. It proved that without any risk management, the safety nets of our society may suddenly be stretched to their limits. The pandemic was an unexpected risk, and its impacts were greater and more comprehensive than what was expected during the early stages of the crisis.
However, we have been aware of the climate change and the threats posed by it for a long time. In the future, we cannot therefore claim it to be unexpected in the same way as the coronavirus pandemic. Efficient future-oriented economic recovery measures play an essential role in solving the corona crisis.
It is also possible to find synergies in crisis solutions. Many international institutions, such as the UN and the World Bank, have underlined the importance of green recovery for solving the ongoing corona crisis. It is important to comply with the principles of green transition and climate sustainability especially in the planning of post-crisis measures, while also ensuring policy coherence.
The EU countries have taken account of the significance of the green transition in the coronavirus-related Next Generation EU recovery package, adopted in July 2020. The EUR 750 billion loan raised from the market will be distributed to the Member States as subsidies and loans – but not on any condition.
In October 2020, the EU Ministry of Finance adopted a regulation according to which 37 per cent of the subsidies and loans must be allocated to climate action and environmentally sustainable investments in the national recovery plans. Finland’s national recovery plan, i.e. the sustainable development programme, meets this criterion: EUR 0.9 to 1.2 billion are allocated to measures for supporting the structural change of the economy through a green transition.
It is also important to keep in mind Article 2.1c of the Paris Agreement. In 2015, Finland and the other European countries undertook in it to make finance flows consistent with a pathway towards low greenhouse gas emissions and climate-resilient development.
Resilience and preparedness play a critical role in combating both the coronavirus and the climate change
If we fail to invest the coronavirus-related recovery funds by responding to the climate crisis, it is likely that the green transition to the structural change and the more sustainable future will not be realized. This may cause the environmental problems to become more severe in the future. This is a concern not only for Finland but also for the entire Europe.
The situation calls for due care and diligence. It is understandable that the Government wishes to revive the economy as quickly and efficiently as possible to put the national economy back on a growth path. Because of the climate change, it is important to take the recovery measures prudently. The money should be invested in projects that are climate sustainable and genuinely stimulate the economy. Green recovery offers many opportunities to the Finnish national economy, and investments in sustainable development have potential. Finland can become one of the leading countries in environmental and energy technology, which can benefit us economically even in the longer term.
European SAIs are collectively involved in a new project group
The National Audit Office of Finland (NAOF) and the European Court of Auditors (ECA) are co-chairing a project group operating under the theme “Preparing for future risks and climate crisis: Time for audit to take a long-term view?”. In addition to auditing the above-mentioned long-term risks, the aim is to gather audit information on the greenness of the recovery measures the European countries have taken because of the corona crisis and on whether Europe is actually succeeding in supporting the green structural change of the economy.
The possibility of supporting the green structural transition of the economy by recovery measures has attracted interest in many different countries. For this reason, as many as 21 European SAIs have already registered for the EUROSAI project group. In addition to the NAOF and the ECA, the SAIs of Great Britain, Belgium and Portugal have participated in taking the lead in the project.
The main aim of the European SAIs is to develop methods for assessing the identification of risks and the greenness of funding. Another aim is to share information on and experiences of audits related to these topics and to compile the gathered information.
At present, the project group intends to continue working until September 2022. It will be interesting to see what kinds of methods we will finally be able to test and develop during the working period and what kinds of results we can present in the final report of the project. Together we hope to create new ideas of how to prepare for the future better and how the SAIs of different countries can support a more sustainable future.