The cost-effectiveness of emissions reductions must be taken into account in climate solutions
- katariinakoivula
- Jan 8
- 2 min read
The EU must reduce its net emissions by 90% by 2040 compared to 1990 levels (Council of the European Union, 2025). Climate policy is not based solely on ambitious targets, but on how efficiently emissions reductions are achieved. The proposal under consideration by the Council emphasizes cost-effectiveness, technological neutrality, and the differing starting points and strengths of the Member States. Comparisons between different measures must be made, as every euro should deliver the greatest possible climate benefit.
Afforestation and the rewetting of peatlands are both nature-based solutions, but their costs per tonne of carbon dioxide sequestered or avoided differ from one another. In the new measures and scenario of national energy and climate policy, the target for rewetting peatlands and former peat extraction sites has been set at 30,000 hectares in Finland by 2030 (VTT, 2025).
In the draft Energy and Climate Strategy, additional funding of €31 million has been proposed for rewetting by 2030 (TEM, 2025). This would imply that the cost of rewetting could be as high as €103 per tCO₂-equivalent.
The carbon removal potential achievable through cost-effective reforestation projects is ten times greater than previous IPCC estimates. The estimated cost of reforestation projects is less than USD 20 per tonne of carbon dioxide, making them a cost-effective option (Conservation International, 2024).
IPCC AR6 Working Group III has estimated the costs of afforestation projects to range from USD 0 to 240 per tonne (Climate Interventions, 2025). Fuss et al. (2018) estimate the cost range of reforestation and carbon removal to be USD 0–53 per tonne of carbon removed. Factors influencing this range include location, forest management costs, and forest composition.
”Now and through 2030, nature-based climate solutions such as reforestation are the most feasible and cost-effective way to achieve the gigatonne-scale carbon removals that the IPCC has identified as necessary to meet the goals of the Paris Agreement,” said Matthew Potts, Professor of Forestry at the University of California.
The development of biochar and other engineered carbon removal solutions is still at an early stage and extremely costly. In the draft Energy and Climate Strategy, €140 million in EU funding is allocated to development projects for technological carbon sinks (TEM, 2025). The Finnish Climate Change Panel has estimated, for example, that the cost of storing biogenic carbon dioxide would range from €120 to €240 per tonne around 2030, while direct air capture would still cost €500–1,000 per tonne in 2035. (YM, 2025)
When comparing costs, a key question arises: why do we not prioritize the measures that deliver the greatest emissions reductions for Finland relative to their cost? The climate system does not reward methods, but outcomes.
Also, natural carbon sinks are associated with some uncertainties. The European Commission’s proposal highlights, for example, forest age structure, disturbances, and the impacts of climate change. However, uncertainty cannot be a justification for inaction. As climate scientist Michael E. Mann has stated: “Uncertainties surrounding climate change are not a reason for inaction, but rather a reason to act even more aggressively.” This is precisely why cost-effectiveness and risk diversification should guide decision-making.
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