More than 190 countries around the world have joined the Paris Agreement, and nearly all countries have either signed or ratified it. By joining the agreement, participants, including Estonia, committed to working towards ensuring that the average global temperature does not rise by more than two degrees Celsius compared to pre-industrial levels.

A science-based approach acknowledges that global warming is ongoing, and its accelerating pace is linked to industrial environmental impacts. Therefore, to mitigate the climate problem, humanity must primarily address the factors that contribute to it, particularly by structurally changing industrial production and the economy.

As a result, the draft law refers to a "climate-resilient economy" rather than just "climate." The economic outlook and providing assurance are the most important aspects for society in addressing environmental challenges.

As a society, we need to reach an agreement on achieving climate neutrality by 2050 and determine the way to get there. In preparing the draft law, the Ministry of Climate worked for months with representatives of hundreds of interest groups, who gathered in sectoral working groups. I participated in the forestry and land use group, which included over 30 participants, including conservationists, scientists, foresters and peat producers.

Therefore, the drafters of the bill had to deal with hundreds of proposals, some of which might have been mutually exclusive. In forestry, this often boiled down to discussions about preserving biodiversity and carbon sequestration goals, i.e., between preserving nature's integrity and more efficient management. This tension is not entirely resolved even in the proposed framework law.

Key principles include specific targets for reducing greenhouse gas emissions in various sectors by 2030, 2035, 2040 and 2050; achieving energy efficiency; promoting a circular economy; and ensuring a just transition, where even the most vulnerable groups can adapt to the changes. This will not be easy.

The adaptability of the economy and businesses depends on how costly and feasible the required changes turn out to be. In the industrial and energy sectors, this means the need for investments and technological changes. In transport and logistics, it will require the adoption of zero-emission vehicles. Emission reduction targets set for agriculture may affect traditional practices to some extent.

The technological challenge lies in the fact that achieving climate neutrality heavily depends on the development and adoption of new technologies, which can be risky and unpredictable. Indeed, the draft text only accounts for what can be achieved with existing technologies, but environmental groups have already criticized this approach in the early stages of introducing the bill's principles. Whether new technologies will emerge and how applicable they will be remains uncertain.

A third significant challenge relates to administrative burden. The draft law creates mechanisms for monitoring and reporting on goals to track their fulfillment. This requires resources and administrative capacity, which could mean additional bureaucracy. For example, local governments will need to develop and implement energy and climate plans. Additionally, the preparation of a national climate report will likely require data collection and could impose additional obligations on businesses.

Whether these challenges materialize or are smoothly overcome will largely depend not only on the framework law itself but also on how the executive branch interprets and implements the law in accompanying regulations and actions.

If the economic revitalization plan, which Eesti 200 has supported from the outset, enables the government to create more financial incentives and subsidies for businesses, it can encourage innovation and investment in climate-friendly technologies. We should also focus our main efforts on sectors where we can achieve a competitive advantage.

From the longer list in the explanatory memorandum of the draft law, Estonia's significant strengths include the more efficient valorization of resources, particularly wood, climate and environmental digital solutions and, in the longer term, the adoption of new mineral resources. In renewable energy, the production of zero-emission fuels, research and coastal economy, we are likely to compete with our neighbors on similar grounds.

More training and resources to raise awareness among businesses and local governments will help them adapt to the new requirements. A gradual transition will ensure that it can occur smoothly. The draft law generally addresses this by offering a step-by-step approach to all sectors, along with a buffer for the processing industry, which must simultaneously become more climate-neutral but may temporarily increase overall emissions as its volume grows.

Some flexibility in targets will likely be necessary, given the technological uncertainties we face. Depending on how well we can implement best practices and technologies, there may be a need to adjust goals. However, the initial ambition should be set high.

The success of all this will hinge on avoiding excessive administrative burdens –
specifically, how we can curb the proliferation of climate bureaucracy.

The path of least resistance would be to add countless reporting requirements for businesses and organizations, with obligations to measure emissions down to the gram and track every step's environmental footprint down to the millimeter.

Such an approach would dampen any enthusiasm for environmental sustainability among entrepreneurs. Rampant climate bureaucracy would generate greenhouse gases of its own and push us further away from our goals by creating a motivational vacuum.

Instead, we should choose which existing reporting requirements we could eliminate in the name of climate monitoring and how to automatically collect and aggregate data so that no one even notices its movement within the state's IT infrastructure in the background of the production process.

Structural changes in the economy can be driven by structural changes in regulation. Technological innovation can be spurred by innovation in public services and the efficiency of government administration. The public sector must set an example of responsible behavior in resource use to promote a circular economy.

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