olli rehn : building an enabling environment for circular businesses speech by mr olli rehn, governor of the bank of finland, at the world circular economy forum, helsinki, 3 june 2019. * * * ladies and gentlemen, dear friends, many thanks to sitra for the invitation to the world circular economy forum. while this is the third such event, the things we talk about here are actually not that new. but what is new is that the talks have started to materialise in actions taken by companies. and not only by individual companies, but they are becoming increasingly mainstream. that ’ s the good news. historically economic growth has gone hand in hand with emissions growth and resource usage. the problem is that in order for our planet to survive, we need to separate economic growth from greenhouse gas emissions growth. another piece of good news is that this is not impossible, as the case of reduced emissions from production in the nordic countries proves. but it is not easy either. especially in the developing countries economic growth is badly needed to reduce poverty. last autumn the ipcc released a new report detailing why we should target a 1. 5 degrees increase in temperature, instead of the paris target of 2 degrees. it is no simple feat, as our current path would lead to an increase of more than 3 degrees. and we have only about a decade to take the right bold actions to meet the 1. 5 degree target. there is no single tool that would enable mitigation and adaptation to climate change. the european commission is currently creating legislation to increase funding for the green economy. this supplements the eu emissions trading scheme and the eu co2 - emission targets. this is also good news, but not enough. what we need is action at the global level. in an ideal world, a unified global carbon tax would be the first - best solution, as it would make companies internalize the externalities of emissions. while economists have advocated such a carbon tax, in the real world where we live in, this is being challenged by issues in measuring emissions and by the realpolitik. taxation can be used to create the right incentives even without a unified global carbon tax. sitra has recently published a report detailing how an environmental tax reform could reduce emissions, while creating many benefits for the economy. the new government programme of finland, released today, is based on these principles. globally several ministries of finance have joined their forces in the coalition of finance ministers for climate action to consider issues such

movements. see d. brouillette, j. lachaine and b. vincent, “ wages : measurement and key drivers, ” bank of canada staff analytical note no. 2018 - 2 ( january 2018 ) ; and j. lachaine, “ applying the wage - common to the provinces, ” bank of canada staff analytical note no. 2018 - 16 ( may 2018 ). for further detail, see congressional budget office, “ the budget and economic outlook : 2019 to 2029 ” ( january 2019 ). differences in canadian and us unemployment rates stem from differences in how statistics agencies define unemployed workers and those not participating in the labour force. for more detail, see r. bender, “ measuring employment and unemployment in canada and the united states – a comparison, ” statistics canada ( january 18, 2016 ). that divergence makes sense when you consider that investment and jobs in energyintensive regions respond to oil prices. in fact, there was a massive increase in employment in these regions from 2000 to the end of 2014, and they led wage growth. with much lower oil prices since 2015, employment in the oil and gas sector has fallen by about 20 per cent — that is about 30, 000 jobs. other goods - producing sectors, such as manufacturing and agriculture, are also becoming less prominent employers. 7 instead, a range of service sectors have contributed to job growth, in exactly the places you would expect given longer - term trends. digitalization has led to a burst of jobs in computer system design — up by around 40 per cent over the past five years. there has also been a boom in healthrelated jobs, particularly elder care. almost all the jobs created in services have been full - time, and about two - thirds have been in industries that pay higher - than - average wages. over the past year, servicesector wage gains were much stronger than those in the goods sectors. 8 yet, even after accounting for these regional and sectoral factors, wage growth overall is still a bit short of what one would expect at this stage. this is particularly puzzling when you consider what businesses are telling us about how hard it is to fill jobs. firms in our latest business outlook survey reported one of the highest levels of labour shortages since the great recession. and job vacancies continue to rise, now totalling about 550, 000. why aren ’ t labour shortages driving up wages? if the right workers are so hard to attract, why not simply offer more