Carbon Assessment of the 2018-19 Draft Budget

2. High-level Carbon Assessment of 2018-19 Draft Budget

2.1. Portfolio Expenditure and Associated Emissions

10. Total estimated emissions attributable to the 2018-19 Draft Budget are 7.4 Mt CO ₂-equivalent. Table 2 shows overall spend and emissions by the individual portfolios and further, how these emissions arise. Emissions remain broadly proportional to spend, except for Rural Economy and Connectivity, where emissions per unit of spend are slightly higher. Communities, Social Security and Equalities, Health and Sport, and Rural Economy and Connectivity are the largest Draft Budget items, with the highest emissions.

11. Expenditure is shown net of income, in line with the Draft Budget, and emissions are calculated on that basis. ^[2]

Table 2: Portfolio expenditure ^[3] ( TME excluding non-cash items) and emissions

12. Direct emissions account for 24 per cent of the total; indirect emissions for a further 22 per cent – a large proportion of which is caused by electricity generation. 54 per cent of emissions attributable to Draft Budget expenditure are generated outside Scotland and are embedded in imported goods and services.

13. Figure 1 demonstrates graphically the results for individual portfolios and the split by type of emissions (direct/indirect), and also whether the emissions are domestic or imported. As the graph highlights, the emissions intensity (carbon emissions per pound of spend) of individual portfolios are broadly similar. The exception is Rural Economy and Connectivity, where the emissions intensity of spend is higher. A large part of this expenditure is linked to carbon-intensive production methods (carbon sequestration through forestry is not taken into account). Note that in the second part of Figure 1, the scales vary by portfolio.

Figure 1: Estimated domestic and imported GHG emissions (thousands of tonnes of CO ₂ equivalent) by portfolio and generating industry. Scottish Government Draft Budget 2018/19

2.2. Emissions by Industry Source

14. Figure 1 confirms the continued importance of domestic energy production and its emissions across the Scottish Budget. In addition to this, for Rural Economy and Connectivity, the support of farming activity leads to significant levels of methane and nitrous oxide emissions. ^[4]

15. Total emissions broken down by industry are shown in Figure 2. Some 36 per cent of the Scottish Government's carbon footprint is caused by the use of energy, water and waste, followed by manufacturing (21 per cent) and transport and communication (14 per cent).

Figure 2: Overall Government spending - Industry sector share of emissions (domestic direct and indirect, plus imported GHG emissions)

16. To reduce the emissions from Government spending, decarbonisation of the energy sector remains an important policy aim. As the sector is decarbonised, the carbon intensity of the sector in the Environment Input-Output model will fall, with a consequential reduction in carbon emissions recorded in the use of electricity ^[5] .

2.3. Domestic and Imported Emissions

17. In addition to direct and indirect domestic emissions, the assessment takes into account the emissions generated outside of Scotland in the production of imported goods purchased as a result of Government spending ( e.g. food, machinery, IT equipment).

18. Figure 3 demonstrates that imported emissions make up around a half of emissions from Draft Budget spend. There is however a clear difference between the sources of domestic and imported emissions. Expenditure on energy, water and waste accounts for the largest share of domestic emissions, while expenditure on manufacturing generates the largest share of imported emissions.

Figure 3: Domestic and Imported Emissions - All portfolios