According to several assessments, the green transition will require funding equivalent to 2-4 percent of national GDP annually for both this and the next decade. In its yearbook,

In its forthcoming yearbook, think tank the Foresight Center says that to motivate essential investments, increasing the prices of environmentally harmful products and services cannot be avoided. Doing so is necessary for reducing the unfair advantage held over environmentally-conscious competitors. However, this will result in an overall rise in prices, leading to a reduction in the purchasing power of the population.

"The transition period will be difficult for society, as people are going to see a decrease in their access to products and services," said head of the Foresight Center Tea Danilov. "However, over the next 10-20 years, increasing the investment capacity should lead to an increase in productivity and economic growth, in addition to a better living environment."

The green transition will require upgrades to the technologies, devices, buildings and energy systems used in economic activities. In many cases, these assets will need to be replaced before the end of their useful life. According to the Foresight Center, this will mean additional costs for companies and increase price pressure for consumers.

A Flash Eurobarometer survey conducted in spring 2023 found that 76 percent of Estonian citizens consider climate change a serious global issue, with 30 percent believing the transition to an economy that considers the climate ought to be sped up.

In its yearbook, the Foresight Center notes that an increase in future issues may turn the population against the green transition. It is therefore important to find a method of green transition that enables the burden of costs related to the transition to be distributed fairly among members of society.

"If environmentally harmful products and services are made more expensive, their environmentally-conscious counterparts should in turn be made more affordable," added Danilov.

"So far, this has been attempted by granting subsidies. Some examples of this include subsidies for renovating or replacing heating devices and a grant for purchasing an electric car. However, practice suggests that the organization and personal contributions required for subsidy and grant applications can mostly only be afforded by wealthier people and that these support measures might not be beneficial at all for the poorer sections of society."

The Foresight Center's yearbook suggests that mostly, lower-income households also leave a smaller ecological footprint than wealthier ones, though not in all categories. For example, the ecological footprint caused by household heating tends to be larger for lower-income households, as they have less financial means to renovate their heating devices.

The ecological footprint of people living in rural areas also tends to be larger than those living in urban areas, primarily due to household heating emissions and, to a lesser extent, a higher environmental burden resulting from transportation. The primary area of concern lies in the limited opportunities for reducing the environmental impact in rural areas due to reduced access to alternatives for household heating devices and modes of transportation compared to urban areas.

"Climate legislation is currently being developed and we are considering the best approaches for achieving our goals as well as the extent of the burdens to be borne by various sectors and societal groups," explained Danilov. "Hopefully, this process will also help us assess the economic and social impacts of the green transition and determine ways to minimize its negative consequences."

The Foresight Center's yearbook focusing on the economic and social trends of 2023 will be published at the beginning of April.

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