Important fields where innovation yields a competitive edge and helps ensure subsistence are energy, food production and information technology. Estonia needs to focus its activities, Züleyxa Izmailova writes.
The Riigikogu discussed the green turn as a matter of national importance a day after it passed the state budget. It is a telling example of how things have been handled in this country for the past 10-15 years – first, we divide the money among ourselves and then we tell the people a short green fairy tale. A petition (link in Estonian - ed.) against a new shale oil mill was binned by the Riigikogu Economic Affairs Committee a day before the budget was passed.
The plague of neoliberalism
Similarly to other former Eastern Bloc countries, Estonia went down the path of radical neoliberalism after regaining its independence that has led to the stratification of society and massive growth of social inequality. In addition to criticizing the decisions of past governments, we need to see the bigger picture and look for solutions that would help us reach a better tomorrow.
However, that is complicated to say the least in a country the finance minister of which refuses to listen to experts and refers to conservationists as blockheads.
I claim that the solutions have existed for some time and were detailed by the Estonian Greens back when the party was elected to the Riigikogu in 2007. Something along those lines was said during the Thursday discussion where even the Reform Party and Social Democratic Party had something to say next to the coalition.
The fact that the 2021 state budget is so light on climate change is criminal from the point of view of future generations. Distribution of Enterprise Estonia and KredEx funds is opaque and looks very bad indeed. Direct regional investments (or the so-called Riigikogu protection money – ed.) could be described as ludicrous if they didn't constitute taxpayer millions de facto embezzled.
Mutations of state capitalism
Careless allocation of millions and billions of euros in the state budget to one's "affiliates" inevitably leaves a plethora of unanswered questions. How is it possible that erecting a monument to a cruel mass murderer even makes the list of proposed investments to be made using taxpayer euros?
A painful reaction promptly saw the sum of €30,000 added to support of €141,000 for an anti-abortion nonprofit which decision was in turn condemned by 15,413 people (link in Estonian - ed.) – the money will be going the way of an organization that has no prior achievements or ideas to speak of.
However, it constitutes a good solution for the Conservative People's Party (EKRE) as the money stays in the family so to speak and will help finance the party's election campaign. Such violations of people's sense of justice are very likely not random and rather serve as cover for shady dealings on a much larger scale. That is also the purpose of whipping up topics that fuel passions and split people but fail to improve anyone's life in any meaningful way.
State capitalism in which the government makes use of the state budget to grant loans, surety and direct benefits to friends is one of the ghastliest manifestations of the ruling coalition. It is to be hoped that elections will bring change and a government made up of new political forces untainted by corruption who will concentrate on solving real problems.
Extremes should be avoided but change necessary
The Greens' co-chairman Kaspar Kurve (link in Estonian - ed.) recently pointed to stains on our country's resume – poverty and unsustainably modest social protection. Making a left turn in right-hand traffic is complicated and time-consuming.
But scientists say we are running out of time. We only have a single decade left to save our planet without which it doesn't matter in the slightest whether one is on the political left or right. We face mankind's greatest challenge to date – survival.
Solutions cannot be found in redistributing existing capital or a left turn. In order to maximally alleviate climate change and avoid the worst consequences of a climate disaster, we need to carry out a green turn with a fair transition.
Unlike the finance minister, everyone with a little bit of common sense understands that it is not wise to avoid pollution fees in tax policy. As we know, the Estonian state has spent years generously subsidizing the oil shale industry one quantifiable consequence of which – in addition to direct health damage – is a distorted market, putting local companies at a disadvantage and forcing them to leave behind what is a hostile environment and move abroad.
This has already cost Estonia necessary investments, a lot of green jobs, revenue and precious time to develop its economy.
Time cannot be reclaimed and minor adjustments to the tax rate are not enough to compensate for lost revenue. The whole of Europe is actively looking for ways of switching to a carbon neutral economy. But unlike countries that have accumulated wealth over centuries (including through colonization), Estonia does not have the kind of prosperity and enough rich people to support the country and fund necessary change using so-called old money.
We at best have a handful of people who are born into wealth. Hiking their tax rate would not benefit the country to any notable degree right now.
Estonia finds itself in a situation where shaking its fossil fuel dependence is the only way to rapidly improve the economic situation. It is like a massive chain weighing Estonia down and keeping it from spreading its wings.
To take flight, we need to stop subsidizing the oil shale industry and the outflow of money and lay down fair taxes that consider the climate reality, as well as direct investments only for industry that aims for a climate neutral economy. This means research investments with the potential of supporting a sustainable economy.
No one will be left behind
At the same time, we need to make sure workers and communities freed from fading carbon-intensive sectors have new jobs and dignified pay waiting for them. Almost 25 percent of Estonians are forced to survive on under €560 a month. Half of our pensioners and 80 percent of pensioners living alone are constantly on the verge of poverty.
While pensioners were given a little more from the state budget, hiking the income tax rate could end up leaving them with less as pensions are still double taxed.
The situation is hardly better for children. In all, 17 percent of our children are living in relative poverty. However, statistics can be somewhat misleading as it is the reality for 30 percent of minors in Ida-Viru County and every other child in Valga County.
Single parents are also struggling, while the government plans to cut child support and benefits. The situation of people who need to take care of relatives is in need of immediate alleviation.
Our social system is unable to ward against one family member's illness and loss of capacity for work meaning the same for the other. This is not sustainable and is putting undue stress on our families and the society in general. In every sense.
Estonia's opportunities for developing the economy and improving people's quality of life lie in an ambitious and substantial green turn that needs to be pulled by research-intensive and climate friendly enterprise to which the state should contribute equally or more than the EU.
Important fields where innovation yields a competitive edge and helps ensure subsistence are energy, food production and information technology. Estonia must focus its activities.
I agree with new member of the Riigikogu Imre Sooäär who says that we should develop in expedited procedure sectors that bear the green mindset and become a green digital state. Instead, the state has grown lazy resting on laurels.
The green wave keeps moving forward
While all sectors and groups need to be involved in the green turn, we should not hold back pioneers. Skype put us on the map in terms of information technology, followed by TransferWise. After the success of Kristo Käärmann and Taavet Hinrikus came the triumph of the Villig brothers, with Pipedrive our latest unicorn and Veriff hopefully the next.
Estonia will (hopefully) soon have so many companies valued at a billion or more as to be difficult to keep track of. I dream of such examples and those who follow them landing in the field of environmentalism and should they land in Ida-Viru County – all the better.
However, failure to make these future-oriented investments for the purpose of subsidizing fossil fuels and dying technologies could mean we will never see this transformation as we will simply run out of time.
What if instead of trying to sell each other on the merits of the left or the right, we could concentrate on the future and keep moving forward?
Editor: Marcus Turovski