Low Carbon Scotland - meeting the emissions reduction targets 2010-2022: report

A Low Carbon Scotland: The Vision

i. A low carbon society will use less energy and fewer resources: at home, at work, on the move and across the public sector. It is a society where more of the energy that we do use comes from cleaner and renewable sources such as water, wind, wave and solar power. It is a society that is ready and able to realise the economic opportunities that come from producing fewer carbon emissions, from improved energy and resource efficiency, and from reducing the level of reliance on carbon-based fuel. And it is a society in which we act responsibly, mindful of future generations, and where our actions lead by example across the world.

ii. Working and living in a low carbon society will mean doing less of some things and more of others. We will have to become better at conserving and saving energy in the home and in the workplace, and we will have to "green up" the sources of our energy. And here lie the great opportunities - from efficiencies, from new technologies and from saving carbon. It is revolutionary.

iii. It is now widely accepted that an increase in greenhouse gases in the atmosphere leads to climate change, and that climate change presents a major threat to the planet. It is also widely accepted that we cannot continue to rely heavily on diminishing oil and gas reserves. UK dependence on energy imports could rise from 27% to around 50% within 10 years, a level of dependency last seen in the 1970s. While there are different views on timescales, it is clear that we need alternative fuel supplies which are safe and secure. We need to begin to live differently.

iv. Climate change is already happening, and we are already adapting to its unavoidable impacts. We can act further to prevent even greater changes as a result of human activities, and we must not avoid the responsibility to lead the transition to a low carbon society.

The challenge

v. Scotland's people have always been resourceful, skilled and industrious in harvesting natural resources and generating wealth. We were pioneers in building a modern economy based on a combination of ingenuity, innovation and abundant natural assets; in generating electricity from our lochs and rivers, and in overcoming the physical, technological and engineering challenges of releasing deep sea oil and gas. We can be pioneers again. Increasingly, Scotland's wealth will rest not in depleting finite reserves but in conserving and promoting our valuable assets, reducing consumption and redeploying expertise to develop new economic opportunities based on our rich renewable resources.

vi. Natural resourcefulness is a defining Scottish trait - it's in our nature; in the disproportionate richness of our landscapes and habitats and in the way we reuse and recycle everyday commodities. It defines our environment through the winds and waters of our hills and glens and the wind, waves and tides of our islands and our coast. We have won the natural lottery. That is why Scotland is ideally placed to grasp the opportunities of a new industrial age.

vii. By re-focusing our energies on building a cleaner, more sustainable future we can all benefit from increased employment and a stronger economy - by building a low carbon economy which harnesses renewable resources and reduces energy consumption with better, more efficient homes and workplaces, and by protecting those assets that make Scotland an outstanding destination for visitors and investment. Scotland is now uniquely placed to become a world leader in building a low carbon future: and reaping the economic and community benefits of a low carbon society.

viii. We also have a moral obligation, as an industrialised country, to act on climate change and influence others worldwide to do the same. Many countries are less fortunate than Scotland, and do not share our wealth of natural resources and renewable energy potential. We are, however, in the business of sharing knowledge and information, creating partnerships between academic institutions, and working with countries who are likely to be disproportionately affected by climate change, such as the Maldives. This action supports our overall approach to international development, and assists developing world countries to progress towards a low carbon economy suited to their own strengths.

ix. Like our previous energy revolutions, the "greening up" of our economy and our society will represent a major challenge. But it is an environmental imperative, and an economic opportunity. It is a time of tight budgets. But, as history teaches us, problems and difficulties have been a spur, rather than an obstacle, for economic innovation and success in Scotland.

Prosperity in a low carbon Scotland

x. The development of a low carbon economy is the greatest opportunity for Scotland to develop and maintain a key competitive advantage in the long-term, and to lead Scotland out of recession. Low carbon sits at the nexus of the Scottish Government's long-term economic strategy, encompassing the strategies for physical capital, human capital and competitive advantage. The actions set out in this Report, and in the Scottish Budget for 2011-12 which was considered by Parliament in the same timescale as the draft of this Report, will fundamentally shape the market towards the development of a low carbon economy.

xi. The oil and gas sector has played a vital role in the economic and social story of Scotland in recent decades and has made a substantial contribution to the UK public finances with over £269 billion in tax receipts to the UK Exchequer (2008 prices) since 1976-77. In addition, the skills and expertise developed in Scotland also bring about considerable economic benefits from export sales. The natural advantage given to us by the North Sea from oil and gas can be maintained and secured for the long term by the natural advantage which the North Sea also offers for the storage of carbon dioxide (CO ₂) as part of the carbon capture and storage process. Scotland's CO ₂ storage research study in 2009 estimated that Scotland has significant carbon storage potential. The North Sea has the potential to store over 200 years of Scotland's emissions, and preliminary studies suggest that Scotland's offshore CO ₂ storage capacity is comparable with that of offshore Norway and greater than the Netherlands, Denmark and Germany combined. This could potentially generate revenue from storage of several billion pounds per annum.

xii. In Scotland, we have 25% of Europe's wind and wave resource, 10% of Europe's potential for tidal power, and a wealth of energy engineering expertise, which together offer great potential for establishing new industries for future generations. Our aim is to become one of Europe's leading renewables centres, creating many thousands of new jobs. Another significant Scottish advantage is the international reputation of our universities and research institutions. The expansion of their expertise in renewables and climate change will attract investors, overseas partners and students seeking world-class education in this field. Our Climate Change Centre of Expertise will provide a focal point to draw on this expertise.

xiii. Across the economy, jobs in Scotland's more traditional industries can also take advantage of new economic opportunities, with increased demand for low carbon construction and transport. Businesses who can demonstrate that they follow a low carbon route will secure a competitive advantage over those that do not, and will save costs with efficiencies along the way. There will be a benefit in highlighting good practice in energy use and the low environmental impact of operations, products and services, and so workplaces and public buildings will increasingly display information for employees and visitors about energy consumption. And reduced operational costs in the public sector will help to protect public services.

xiv. There will be an imperative to reduce the need for unnecessary travel and unnecessary costs. Video and tele-conferencing, social media and other web-based communications will become increasingly commonplace in business, industry and the public sector. Sharing transport, driving less and prioritising low carbon means of public and private transport will become standard practice for employees. Low carbon vehicles will begin to replace fleets as technology develops, and power points for charging electric vehicles will become commonplace. Walking and cycling to work will become routine.

xv. Scotland is poised to become the international destination of choice for low carbon investment. Many of Scotland's businesses have already responded seriously and positively to the challenge of climate change, and the Climate Change (Scotland) Act was passed unanimously by the Scottish Parliament with the strong support of business. Improving the efficiency of our energy use is often the most cost effective way to cut emissions and is rightly where businesses at the vanguard are focusing their attention, saving money in the economic downturn and lowering their carbon footprint at the same time.

xvi. Increasing energy efficiency will help to create and sustain jobs in sectors such as insulation and, in the short term, provides the simplest way to protect businesses from increasing and volatile fuel prices. The Energy Saving Trust and the Carbon Trust provide energy efficiency support to all sizes of Scottish business, from sole traders right up to large, energy-intensive manufacturing companies. The work of Scottish Business in the Community, through their operation of the Mayday Network in Scotland, is key to getting businesses to the right and consistent sources of advice and offers businesses the opportunity to see what other companies have done and what has already worked in their industries. The 2020 Climate Group, convened by Ian Marchant of Scottish and Southern Energy, has membership that goes wider than the business sector and the Group's main aim is to help ensure that all sectors of Scotland's economy and civic society contribute fully to achieving emissions reductions. Some examples of what Scottish businesses are doing to reap the rewards of moving to a low carbon Scotland can be found at the 2020 Climate Group's website ¹ .

The potential of the low carbon economy

xvii. There are a number of potential economic benefits arising from a low carbon economy:

• Scotland's low carbon market was worth around £8.8 billion in 2008-09 (within a GDP of around £100 billion), and is forecast to rise to around £12 billion by 2015-16;
• Scotland can secure a position as the international destination of choice for low carbon investment, and for the development of the financial architecture for a global low carbon economy;
• Jobs in the low carbon sector in Scotland could grow by 4% a year to 2020, rising from around 70,000 to 130,000, over 5% of the Scottish workforce;
• Scotland is already an exporter of low carbon technologies, with £845 million exported in 2009-10;
• Scotland can be the green energy capital of Europe, and offshore wind alone could bring an estimated £30 billion of inward investment, and support over 20,000 jobs;
• Scotland now generates over 27% of its gross electricity consumption from renewables and is comfortably on course to meet targets of 31% by 2011 and 80% by 2020;
• Harnessing just a third of our offshore renewable energy potential could meet Scotland's electricity needs seven times over by 2050, with a net value, in terms of electricity sales, of £14 billion by 2050, the equivalent of £2,700 for each person in Scotland;
• Household energy efficiency could save consumers a cumulative £8.5 billion in their fuel bills by 2050;
• Motorists could save £300 million a year in reduced fuel costs by "eco-driving";

• Farmers could save up to £464 million by 2022 in business efficiencies.

More examples of particular economic benefits of moving to a low carbon economy are given in Chapter 2.

Living in low carbon Scotland

xviii. Living in low carbon Scotland will mean doing more of some things and less of others. At home, we will become better at conserving energy. Home energy efficiency levels will become a high priority for anyone buying or selling a home. Efficient boilers, and effective roof, wall and window insulation will become increasingly desirable features in the housing market. Commuting to work and personal travel will no longer be so dependent on petrol or diesel cars, as hybrid and electric cars become cheaper and efficient. Walking or cycling to work or school will become increasingly popular. Changes in travel habits and other actions to tackle climate change go hand in hand with important health, social and environmental benefits: reducing the incidence and economic costs of heart disease, obesity, diabetes, depression, and local pollution.

xix. Young people will continue to learn the importance of low carbon living and environmental awareness and carry it through to practice in adulthood, changing the nature of consumer demand across the economy. An understanding of low carbon living will be seen as an advantage for young people entering the workplace, and skills in relevant science, technology, modern engineering and social disciplines will be in high demand. The education sector will continue to have a strong advocacy role in this area, and inspire young people through the new Curriculum for Excellence.

xx. Communities across Scotland will increasingly make sure their buildings are energy efficient and use their own sources of renewable energy. This will build on the knowledge and experience of existing community pioneers in different parts of the country who have developed and managed their own energy companies and district heating initiatives. Scotland will have more small community-owned energy companies, more district heating systems and a recognised expertise in independent community-led low carbon living. Individuals who live low-carbon lives will no longer be a minority, as more and more people take action to save money and make healthy choices.

The benefits of a low carbon society

xxi. Among the potential benefits arising from a low carbon society are:

• More opportunities for walking and cycling in a safe and pleasant environment;
• Less pollution from transport and industry, resulting in better air and water quality;
• Lower levels of fuel poverty, as energy efficiency measures reduce household energy bills, and warmer homes for those who can't currently afford sufficient heating;
• General health and lifestyle benefits, with fewer missed days at work or school;
• Reduced incidence of asthma and respiratory problems, and improved mental health;
• Reduced incidences of obesity, from increased walking, cycling and use of public transport;
• A healthier natural environment, with improved air and water quality helping biodiversity;
• Reduced congestion and reduced travel times from fewer cars on the road;
• Lower running costs for school, college and university estates through efficiencies in energy use; and

• Less pressure on health services.

Realising the potential - leading the way towards low carbon Scotland

xxii. Business and industry leaders in Scotland have recognised the opportunities and benefits for the economy and backed this legislation. They are now ready to respond and lead the way for others. People and communities across Scotland recognised the financial, health and social benefits of a change in lifestyle and backed this legislation. They are now ready to take the next steps, and encourage others to follow suit.

xxiii. Government can lead the way and support change through its different roles: in providing information, developing policies, making regulations and in taking decisions that support low carbon activities. Our public sector - national government, councils, the health service and other publicly funded services - will increasingly demonstrate how its own operations are driving down emissions.

xxiv. There is a role and a responsibility for everyone - from national governments to individuals - to play their part and take action.

xxv. Scotland has already established strong incentives for the development of renewables, using the powers that we currently have. But our success depends upon the right economic and taxation conditions for development. With Full Financial Responsibility we could complement our current actions by using the ability to direct tax relief and credits to those engaged in producing renewable energy. This could include using energy tax policies such as more generous capital allowances for infrastructure investment and schemes to better link current and future tax payments (when production becomes more profitable). Full Financial Responsibility would also ensure that Scotland received a fair share of rents generated from the Crown Estate and be able to invest our proceeds from the Fossil Fuel Levy in a manner which was in Scotland's best interests.

Challenging others to match Scotland's ambition

xxvi. A global low carbon economy is inevitable. Scotland is demonstrating the benefits of a low carbon economy to other countries, and many countries are already beginning to seize the opportunities. The Scottish Government plays a key role in preparing and participating in international climate change negotiations as part of the UK delegation. Within the EU, Scotland has a prominent position on key issues on the international climate agenda: renewable energy, marine energy, grids, carbon capture and storage, forestry and peatlands. A key task is to convince the EU to raise its own targets for emissions reductions from 20% to 30% by 2020, and it is imperative that every opportunity is taken to reinforce the message that, based on the Scottish experience, a low carbon Europe is feasible and affordable, and that investment in low carbon technologies and industries can bring new jobs and opportunities for economic growth.

Achievements since 2007

• Scotland's emissions have fallen by 21.2% from 1990: we are over half way to achieving our Climate Change Act target of reducing emissions by 42% by 2020 (these figures include international aviation and shipping and our participation in the EU Emissions Trading System).
• The Scottish Government is showing the way on renewable development and since May 2007, Ministers have approved 39 large-scale renewable energy projects contributing to a total consented and installed renewables capacity for Scotland of just over 7 gigawatts ( GW).
• The pace and momentum set by the Scottish Government continues with a further 48 large scale renewable energy projects currently under consideration.
• The Crown Estate's announcement in 2010 of the world's first commercial scale leasing round for wave and tidal energy in the Pentland Firth and Orkney Waters has the potential to deliver as much as 1.6 GW of marine energy off Scotland's north coast, with significant associated economic benefits.
• The Scottish Government launched the £10 million Saltire Prize and has tripled funding for micro and community generation, with
  £13.5 million available per year over the three financial years 2008-2011. The £2 million Energy Saving Scotland Home Loans pathfinder ran from October 2009 to June 2010. It has helped 701 Scottish households to save £97,000 per year on fuel bills. ²
• The Scottish Government is supporting area-based schemes offering free or low cost insulation measures to 500,000 households. This includes a new universal-access area-based scheme launched by the First Minister in October 2010 that will support 27 projects delivered by local councils across Scotland.
• In 2010-11 the Scottish Government introduced a Green Bus Fund, Scotland's first low carbon vehicle procurement scheme, and the first Cycling Action Plan.
• The £27 million Climate Challenge Fund has helped 261 communities reduce their emissions.

• The Scottish National Renewables Infrastructure Fund (N- RIF) was launched in November 2010, with a budget of at least £70 million over four years to support port infrastructure projects for the Scottish offshore wind sector.