Climate Change Could Deepen Finland's Debt More Than Feared, Report Warns

Finland faces the risk of a more severe increase in public debt due to climate change than previously estimated, according to a report commissioned by the Ministry of Finance. The working group responsible for the report emphasizes the urgent need for Finland to develop the capacity to assess the economic consequences of climate change, green transition, and biodiversity loss.

European Commission projections suggest that Finland's public debt could rise by as much as 10 percentage points by 2035 due to climate change impacts. Mikko Spolander, a department head, acknowledged that Finland currently lacks the ability to conduct its own thorough impact assessments, highlighting a critical gap in preparedness.

The report's release coincides with extreme heatwaves across Central Europe, with temperatures exceeding 40 degrees Celsius, underscoring the tangible and immediate effects of climate change. The government's final report, published Wednesday, stresses the necessity of integrating comprehensive economic impact evaluations into national policy-making.