The capitals in the Nordic region have talked for years about the fact that growth and sustainability do not contradict each other. Now, they are looking at how to plan their future growth in a green and sustainable way to set a feasible example to the world.

The time is riper than ever to convert to green and sustainable growth as the Nordic countries are looking at how to find the keys to their future growth. The population is aging, costs are rising and the economic growth must make the social equation of the welfare state work without damaging the fine balance of sustainable living.

Now, more than ever, when Nordic parliamentarians make new laws they focus on how to incorporate the fight against climate change, the efforts for a better environment and the shaping of solid business practices. That allows for all aspects to be combined in the best possible and most sustainable way when making new regulations.

Also in the private sector things are looking greener. The CleanTech sector is a fast growing business in the Nordic countries. Last year alone, 500 million euros were invested in Nordic CleanTech.

If the Nordic countries succeed in greening their economy to a maximum, they can hold and strengthen a competitive advantage in the world when it comes to green economy.

Nordic Council members Denmark, Finland, Iceland, Norway and Sweden, as well as the Faroe Islands, all have a different focus on green economy. But the region shares the need and the willingness to gain the best sustainable economic growth for the future.

Focus on a green future

Denmark aims to become fully independent from fossil fuels by 2050 and to switch its entire power supply to renewable energy as part of greening the country’s economy.

Some of the ways to reach these goals are to maximise the efficiency of the energy used, to make renewable energy more competitive, and to strengthen the focus on research and innovation in the area of energy. Measures to turn the country’s car fleet electric are already underway although that is expected to happen at a slower pace.

The new focus for the greening of the Danish economy – which is laid out in two new government reports: Energy Strategy 2050 and New Growth in Denmark – is not only good news for the climate and for the environment, but also for Denmark’s geopolitical independence, argues Danish Environment Minister Lykke Friis.

Ending the need for fossil fuels also means ending the dependence on other countries rich in oil and gas. It also entails an improvement of the Danish economy, as it will become more robust towards future increases and fluctuations of oil prices. Ms Friis gave the example of how the European Union’s (EU) energy bill for imported oil increased by over 50 billion euros in 2010 alone.

The opposition criticises the Danish government’s green plans for lacking details and ambition. But, at the same time, politicians across all parties agree that it has to be done. There might be disagreements on the speed of things, but the green course is set in Denmark.

Finland is looking at detailing the focus for its green future. Prime Minister Mari Kiviniemi said last year that a plan for a green economy will make Finland a cleaner country and less polluting country in the coming decades.

“Our abilities and our natural resources will take us to the top of international development. The green economy opens up enormous possibilities for us to become successful in these markets”, she added.

Concrete measures are still missing as the Finns have to choose a new government at their general election later this month. Helsinki has already declared, though, that it wants to focus more on research and innovation in the CleanTech industry and to make better use of the country’s own natural resources for clean energy production.

Greening Finland’s economy is seen as a way forward to boost the country’s economy and sustain its welfare state. Things have changed radically since mobile giant Nokia’s phenomenal growth in the 1990s took Finland out of its financial crisis and became one of the pillars of the Finnish economy.

But Nokia is now facing hard times. The company has already moved some sections abroad to industrialising countries and is set to cut employment at its Finnish facilities. The Finns are anxiously waiting for news of how many people will be fired and a new focus on growth is needed in Finland.

In Sweden, the focus is also on greening the Scandinavian country’s economy, but there are still many disagreements across the political parties on how to do it, and not least, on how to define the term ‘green growth’.

There are as many definitions as there are political parties, argue experts. For the Environmental Party, green and sustainable growth may mean a readjustment of the entire Swedish society, while for the Moderate Party it may mean more and better nuclear power. 

The issue of Sweden’s sustainable and green economy of the future is also dividing the opposition – the Social Democrat Party and the Environmental Party are accusing each other of being irresponsible and unrealistic when it comes to how to create a sustainable and green growth for the future.

The core issue in Sweden, therefore, is about who will define the term green growth and who will set up the rules for a sustainable future. The business sector works in quarterly cycles while environmental concerns must be dealt with now for the sake of future generations. To combine these two approaches is a big challenge for decision-makers in Stockholm.

Less words, more action

In Norway, politicians and public institutions have scaled down the use of the phrase: ‘green and sustainable growth’. But many see this as something positive – that Norway is going from words to deeds.

Norway, together with the European Union, has already committed itself to ambitious climate goals. Now the focus is on more individual actions that prevent the future economic growth from destroying the environment and the climate.

A great new green initiative will come out this autumn with ambitious targets for cutting Norway’s greenhouse gases, the country’s red-green government in Oslo has stated.

One area that will be touched upon is improving the energy efficiency of the construction industry. New houses, for example, should be producing more energy than they use.

Another issue that will be taken into consideration is the Parliament’s decision on two-thirds of Norway’s cut in CO2 emissions having to be within the country’s borders, making it hard for businesses to buy their way out by financing CO2 reduction in other countries.

Norway’s problem, however, is that it wants to be a frontrunner in climate policies but is, at the same time, a big exporter of fossil fuels that enhance climate change, which green policies aim to reduce. Big steps are needed to prove that Norway’s exploration of oil and gas can become more environmentally friendly.

In Iceland, on the other hand, the country’s main energy sources, provided by nature, are renewable. Iceland’s harsh nature is generous when it comes to clean energy. The island has an abundance of hydro and geothermal power. The many waterfalls create electricity while homes are warmed up by heat from beneath the surface of the earth.

Nevertheless, the ecological footprint of the Icelandic people is one of the biggest in the world – 14 times higher than the world average, according to a new study from the Icelandic Environment Directorate. Despite the clean energy, Iceland uses plenty of fossil fuels for its transport and fisheries sector.

The human history of Iceland has been a fight against a hard nature. Most of the forests that once covered the entire island have been cut for their wood; and when the fishing boats became big and modern, many of the usual fish disappeared due to overfishing.

Further to the south in the Atlantic, the Faroe Islands also have a heavy ecological footprint. The country’s newest seafaring ships use heavy oil instead of the cleaner diesel oil. The European Union, for example, is phasing out the use of heavy oil with the aim to ban it outright in the future.

Although the Faroese government is aware of the problem, nothing is so far being done to phase out the polluting oil.

“I absolutely believe that we should stop using heavy oil. It is not only very contaminating with heavy metals when used, but also extremely polluting and difficult to handle in case of oil spills at sea”, the conservative Faroese Interior and Environment Minister, Annika Olsen, has said.

“A limitation or a phase out of the use of heavy oil is necessary, but I cannot say anything about if or when there will be a concrete proposal [from the government]”, she added.

Overfishing is another problem on the Faroe Islands. The Faroese fishing fleet needs to be reduced in order for the Atlantic islands to have a sustainable future, according to experts. Furthermore, the Faroese economy is almost totally dependent on the fishing industry.

After years of avoiding the inconvenient truth of overfishing, politicians and operators in the fishing sector are finally talking about taking action.

“I think we are on the right track for sustainable fishing, understood as a concept that takes three parameters into account: the ecological, the economic and the social”, said the conservative Faroese Foreign and Fisheries Minister, Jacob Vestergaard, last month.

He admitted though, that it will be difficult and it will take a long time before the different interest groups can agree on the best possible measures, despite experts on the 18-island group having warned of the dangers of overfishing for years.

Green demands create green measures

Thirty years of environmental awareness in the Nordic countries, mixed with continuing rising oil prices and a global economic crisis, has led to more investment in the Nordic capitals in more sustainable practices across sectors.

Previously, green efforts were mostly taken as private initiatives with households recycling waste and buying more environmentally friendly products.

Today, green initiatives are also taken at national and global levels – and most importantly – they are now linked to the economy giving the green issue a whole new powerful force.

On the Faroe Islands, the steps to make its fishing industry more sustainable come from demands from its European markets.

Also the Norwegian government has taken notice of its citizens’ demands for more sustainability. Oslo has recently rejected oil and gas exploration in the area of Lofoten in northern Norway for environmental reasons, as the area is rich in wildlife and is an important spawning ground for cod.

Finland, which is currently constructing the world’s largest nuclear power plant, has heeded its citizens’ worries about nuclear energy following the recent catastrophe in Japan. Finnish President Tarja Halonen said last month that Finland has to get rid of the so-called conventional power sources and start looking to further greening the economy.

Similar comments are coming from Sweden, where the subject of nuclear energy has long divided the country. Prime Minister Fredrik Reinfeldt has said that the more renewable energy Sweden can introduce, the more the country can push back nuclear energy, although without promising any concrete measures.

Also in the business sector, demands for sustainability are leading to action. The world’s biggest containership company – Danish Mærsk Line – has responded to market demands of becoming greener. In 2009, the company launched its climate strategy to become the most environmentally friendly shipping company by cutting its greenhouse gas emissions even though its fleet is growing.

Brave new world

Sustainable and green growth has moved from being only a concern for a handful of persons to being something that is thought about far into countries’ growth strategies.

There is, of course, still a long way to go, but the Nordic countries know that making their economic growth as sustainable as possible is the way forward and could boost the countries’ economies which have slowed down recently.

Some Nordic capitals even hope to become global leaders in green and sustainable growth, which in turn can offer a new financial advantage for the growth of the aging welfare states – making the green economy brand.

It could happen if the public demands it, if businesses take new and sustainable initiatives, and if the politicians dare take brave green decisions for the future.

This analysis is based on articles from the Nordic Council/Nordic Council of Ministers' online news magazine, Analys Norden.

The views expressed are those of the author.