Climate Change Plan: third report on proposals and policies 2018-2032 (RPP3)

Context

The Scottish Government's purpose is to create a more successful country, with opportunities for all of Scotland to flourish, through increasing sustainable, inclusive economic growth.

Scotland's Economic Strategy (2015) ^[7] is the strategic plan for current and future Scottish Government policy. It sets out an overarching framework for how we aim to achieve a more productive, cohesive and fairer Scotland. It prioritises boosting investment and innovation, supporting inclusive growth and maintaining our focus on increasing diplomatic and economic internationalisation. This ambition underpins the approach and commitments in this Climate Change Plan.

Our vision

By 2032, Scotland will have reduced its emissions by 66% against 1990 levels. This will be an enormous transformational change – achieved by Government and the public, private and third sectors alongside families and communities. It is an exciting time for Scotland with tremendous opportunities, not only in reducing emissions but in growing and diversifying our economy, improving the wellbeing of our people, and protecting and enhancing our natural environment.

Our energy sector will be flourishing and competitive, delivering secure, affordable, clean energy for Scotland's households, communities and businesses. Our industrial sector, which accounts for half of our exports, will continue to lead the way in decarbonisation, with reduced carbon intensity from techniques such as reusing waste heat, adopting new technologies and increasing energy productivity.

Homes and buildings will be more efficient, with less energy required to heat and cool them – critical to both reduce fuel poverty and costs for businesses. In transport, people and businesses will have access to cleaner forms of travel and transport, and our urban air quality will have improved. People will have significantly more opportunities to walk and cycle, important for both their physical and mental health as well as improving our urban environment.

The landfilling of biodegradable municipal waste will have been phased out and our circular economy will mean more productive businesses, new markets and reduced reliance on scarce resources. Our agriculture will be among the lowest carbon and most efficient producers of food in the world, and our ambitious peatland restoration and woodland planting programmes will enhance biodiversity and ecosystems as well as providing wonderful natural places for local people and visitors to enjoy and relax.

Of course, we cannot predict with certainty exactly how we will get there. We do not know how global and regional market forces will evolve or how some technologies will develop. The Scottish Government's role is to chart a path through this uncertainty – putting the welfare of our people, the health of our economy, and the protection and enhancement of our natural environment at the heart of our transformation. This Climate Change Plan lays out how we will do that, maximising benefits and minimising disruptions and costs to benefit current and future generations.

This Climate Change Plan presents proposals and policies to meet Scotland's annual emissions targets to 2032. Based on the most recent Scottish Greenhouse Gas Inventory (2015), these annual targets represent an emissions reduction of 66% compared to baseline levels by 2032. This level of transformational change presents Scotland with significant challenges and opportunities, and we have explored these through the development of the Plan.

The graph below illustrates our decarbonisation pathway to 2032. Sector-specific pathways can be found in the sector chapters in Part Three of this document.

Figure 1: Pathway to 2032

*Land Use, Land Use Change and Forestry

The development of this pathway has been underpinned by the TIMES model. TIMES is powerful tool for understanding the carbon cost-effectiveness of technologies, fuels and other carbon reduction measures. It provides a consistent comparison of the costs of action across all sectors and help us develop a least-cost pathway for meeting our climate change targets. This pathway suggests changes that could happen on the ground, right across the economy, to meet our emissions targets. These include changes to the energy system, as well as to non-energy sectors, including components of the agricultural sector, waste, land use, land use change and forestry.

Our decarbonisation pathway to 2032

By 2032, Scotland's electricity system will be largely decarbonised and be increasingly important as a power source for heat and transport. Emissions from the electricity sector are expected to fall by 28% over the period covered by this Plan. Emissions reduction and security of supply will be ensured through diverse generation technologies, including gas generation, increased storage, smart grid technologies and improved interconnection. While Carbon Capture and Storage ( CCS) is not a requirement until after 2030, it remains a key technology, supported by the Scottish Government, to meet our long-term emissions reductions targets.

In services (non-domestic buildings) we will need to reduce emissions by 53% over the lifetime of the Plan. This will require increasing the uptake of both conservation measures and low carbon heating sources, gradually to 2025, and increase the rate of uptake thereafter. In the residential sector, the approach is similar to the services sector although the rate of emissions reduction is slower, particularly until 2025. The focus is on energy efficiency, in early years, with a greater uptake of low carbon heating sources (heat pumps and district heating) and energy efficiency measures from 2025. Residential emissions are expected to fall by 23% over the lifetime of the Plan. Residential and non-residential emissions are dealt with together in our Buildings chapter.

We envisage significant decarbonisation of transport by 2032, with emissions reducing by 37% over the lifetime of the Plan. With our commitment to phase out the need to buy petrol and diesel cars and vans by 2032, low emission vehicles will be widespread and becoming the norm, and freight infrastructure will feature more efficient HGVs operating from out of town freight consolidation centres.

For the industrial sector our plans are broadly consistent with the existing EU and UK regulatory frameworks, with a fall in industrial emissions of 21% over the lifetime of the Plan, through a combination of fuel diversification, cost saving energy efficiency and fuel recovery, and participation in the EU ETS (where we are pressing the UK Government for clarity on its plans for emissions trading as it prepares to leave the EU). Technologies critical to further emissions reduction will be demonstrated by 2030 and have the potential to drive even faster emissions reductions.

In the waste sector, the landfilling of biodegradable municipal waste will be phased out. By 2030, we expect to be in tandem with the UN Sustainable Development Goal to reduce food waste by 50%. There will be a fall in waste emissions of 52% over the lifetime of this Plan.

Our ambition for agriculture is for Scotland to be among the lowest carbon and most efficient food producers in the world. Our agricultural emissions will decline by 9% over the lifetime of the Plan, through efficiency measures and a focus on low carbon produce.

The land use sector will increasingly act as a net carbon sink. By 2030 we will have restored 250,000 hectares of degraded peatland, and Scotland's woodlands will be delivering a greater level of ecosystem services, such as natural flood management and biodiversity enhancement.

Scotland's achievements

Scotland's people and businesses can be proud of what we've achieved in lowering our emissions to date. In 2015, Scotland had reduced its adjusted emissions by 41%, including international aviation and shipping, compared to 1990 levels, and we are on track to meet our 42% emissions reduction target by 2020.

For over a decade, the Scottish Government has provided political and financial support for renewable energy generators. Together with industry, local authorities, regulators and communities, we have taken huge steps towards decarbonising our electricity supply. In 2015, 17.8% of total Scottish energy consumption came from renewable sources – more than double the level in 2009.

In 2016, 42.9% of our electricity was generated by renewables, predominantly onshore wind. The expansion in onshore wind is comparable to the rollout of hydro power in the post-war period, which transformed for the better the lives of so many. This growth continues to drive innovation and adaptation in the management and control of power on the grid. This innovation, both technological and regulatory, will play a crucial role in accommodating the continuing growth of embedded generation, and a wider transformation in how we use the grid to heat and cool our buildings and power our transport systems.

Figure 2: Scotland's greenhouse gas emissions reduction over time (based on adjusted emissions)

The great progress Scotland has made in renewable electricity generation has been the main driver in the development of a low carbon economy sector worth £11 billion in turnover and supporting 49,000 jobs ^[8] .

Aerial view of Hunterston offshore wind turbine test facility, North Ayrshire

Credit: Alan McAteer for Scottish Enterprise

The National Offshore Wind Turbine Test facility ( NOWTTF) at Hunterston is the UK's only onshore test facility for offshore wind turbines. It has been instrumental in securing Scotland's place as an international leader in offshore wind energy research and development.

Scotland's world leading climate change legislation

The Climate Change (Scotland) Act 2009 ^[9] ('the Act'), passed unanimously by the Scottish Parliament, sets targets to reduce Scotland's emissions of seven greenhouse gases ^[10] by at least 42% by 2020 and 80% by 2050, compared to the 1990-1995 baseline. As well as domestic emissions, Scotland's share of emissions from international aviation and shipping are included in the targets.

The Act requires Scottish Ministers to set annual emissions reduction targets for each year in the period 2010-2050, consistent with achieving the long-term targets. Almost nine years on, the level of Scotland's ambition enshrined in this legislation remains among the highest in the world.

This Climate Change Plan presents the proposals and policies for meeting annual targets, in accordance with Section 35 of the Act.

Later in 2018, the Scottish Government will introduce a new Climate Change Bill with even more ambitious targets than those prescribed by the 2009 Act and, in so doing, Scotland will become one of the first countries in the world to legislate to support the aims of the Paris Agreement. We sought advice from the Committee on Climate Change on the form, mechanisms and levels of emissions reduction targets that we should include in the Bill. Advice from the CCC was published in March 2017 ^[11] and was supplemented by updated advice ^[12] published in January 2018.

Global costs

The Intergovernmental Panel on Climate Change's ( IPCC) Fifth Assessment Report ^[13] makes it clear that 'business as usual' is not an option: either significant action is taken on a global scale to limit climate change, or economic activity will have to adjust to the costs imposed by a changing climate.

Such costs could be significant. The Stern Review on the Economics of Climate Change ^[14] estimated that, if policies are not put in place to reduce emissions, the impacts would be equivalent to losing at least 5% of global per capita consumption, now and forever. This rises to as much as 20% when wider impacts and risks, such as flooding and heightened climate sensitivity, are included. The Stern Review also found that strong and early action to tackle climate change would outweigh the costs, pricing the annual cost of cutting total greenhouse gas emissions to about three quarters of current levels (at the time of the report) by 2050 would be in the range of -1.0% to +3.5% of global (Gross Domestic Product) GDP, with an average estimate of approximately 1%.

We have estimated the cost of meeting the Scottish Government climate change targets using TIMES. To do this, we have subtracted the system cost, out to 2050, of a TIMES model run with no targets from the cost (out to 2050) of the model run underpinning this Plan. This gives us the estimated cost of meeting our climate change targets over and above the cost of taking no action. The resulting cost was approximately 1% of cumulative GDP out to 2050, in line with the Stern Review estimate. It is not possible to disaggregate the system cost into individual sector costs, given the interdependence between sectors.

Wider impacts in Scotland of the Climate Change Plan

There is increasing recognition and acceptance that policies designed to reduce greenhouse gas emissions not only mitigate the risks of climate change but can also have other positive societal impacts improvements in air quality and health outcomes. Developing a more detailed understanding of potential wider impacts has been an important part of the development of this Plan.

The Scottish Government commissioned three evidence reviews of the potential wider impacts of climate change mitigation options, focusing on: agriculture, forestry, waste and related land use; the built environment; and transport. The reviews highlighted the potential for positive social, economic and environmental impacts from the Plan. The full documents were published alongside the draft Plan in January 2017.

We have used these evidence reviews to assess the potential wider impacts of the policies within this Plan.

Example 1: The Scottish Energy Efficiency Programme ( SEEP)

There is evidence that improving the energy efficiency of people's homes can improve their physical and mental health, particularly among households affected by fuel poverty. Scottish Government energy efficiency grants will continue to target low income and fuel-poor households, whose occupants have the greatest potential to benefit. The SEEP programme will support Scottish jobs and help businesses take up energy efficiency services and technologies.

Example 2: Transport Policy

There is evidence that increasing the uptake of electric vehicles will improve air quality in towns and cities, resulting in reduced levels of illness caused by pollution and thereby improved health. An increase in the number of journeys made by active travel modes (walking and cycling) can also result in health benefits.

Adapting to Scotland's changing climate

This Climate Change Plan sets out how we will reduce our greenhouse gas emissions; it is not a plan for adapting to a changing climate. It is, however, important to understand that climate change is already affecting us. In Scotland the average temperature in the 2000s was 0.90°C warmer than the 1961-1990 average and warmer than any other decade since records began in 1910 ^[15] . Annual rainfall has increased by around 11% over the past century. Extreme weather and flooding are immediate and major climate risks; and in the longer term, sea level rise is likely to pose a significant threat for Scotland ^[16] .

An independent assessment ^[17] in 2016 by the Adaptation Sub-Committee of the Committee on Climate Change of Scotland's Adaptation Programme ( SCCAP) highlighted that Scotland's unique geography creates both resilience and vulnerabilities to the impacts of extreme weather and climate change. Scotland's iconic industries, including forestry, fisheries and whisky, rely on climate-sensitive natural resources. Changes in weather patterns and sea level rises will test our transport, communication, fuel, and energy networks and challenge the delivery of health and social care services.

Supported by the Scottish Government-funded Adaptation Scotland programme ^[18] , climate change adaptation is already well integrated within many key policy areas. Recent developments which are strengthening our adaptation response include: the establishment of Scotland's National Centre for Resilience ^[19] , new Flood Risk Management Plans ^[20] , mapping of flood disadvantage, new public body reporting duties that include adaptation, new indicators developed by ClimateXChange to show how well Scotland is performing across sectors, and important locally-based initiatives such as Edinburgh Adapts ^[21] , Climate Ready Clyde ^[22] and Aberdeen Adapts ^[23] .

Adapting to the impacts of climate change is, of course, a global challenge faced by all countries. The Paris Agreement on climate change links mitigation and adaptation and sets a global goal of reducing vulnerability to climate change. All countries must plan for and take action on adaptation. In Scotland, we will continue to strengthen our adaptation to climate change in the years and decades ahead, working with partners across sectors on the priorities for the next update of the adaptation programme in 2019. In doing so, Scotland will also retain a strong focus on climate justice recognising that climate change impacts tend to impact most severely on poorer people and vulnerable communities.

Natural Capital

In 2015, the United Nations adopted the Sustainable Development Goals ^[24] which aim to end poverty, protect the planet, ensure prosperity for all and shift the world onto a sustainable development pathway by 2030. This global ambition is now integral to the Scottish Government's overall purpose to increase sustainable economic growth and create a more successful country with opportunities for all of Scotland to flourish. The transition to a low carbon economy by 2050 will help us to deliver this ambition. Our progress towards a sustainable and low carbon economy is well underway: renewable energy supplied 54% of Scottish gross electricity consumption in 2016 and we are taking wider action under our circular economy strategy.

Natural capital is defined as a country's stock of natural resources and environmental assets including plants, animals, air, water, soils and minerals.

People derive a wide range of benefits from natural capital. These benefits are often called "ecosystem services". Ecosystem services are vital to society and the economy, providing benefits such as the food we eat, the water we drink, climate regulation, carbon storage, natural flood defences, pollutant control, timber and crop pollination; and less tangible benefits such as aesthetic enjoyment, recreational and educational value.

Caledonian pine woodland at Glen Affric National Nature Reserve

©Lorne Gill/ SNH

Over time, the use of natural capital beyond sustainable supply levels typically leads to depletion and/or degradation. In some instances, degraded or depleted natural capital can regenerate or replenish, but some stock may lose this ability, and pose a threat to our prosperity and well being. Protecting the environment and safeguarding Scotland's natural capital are crucial fro the transition to a low carbon economy.

Scotland's rich and diverse natural environment is a national asset and a source of significant international competitive advantage. Its continuing health and improvement is fundamental to sustainable economic growth. Our natural capital is believed to account directly for more than 60,000 jobs here in Scotland, and its direct benefits are realised in our tourist industry, which employs more than 200,000 people across the country ^[25] ; and it is essential to our food and drink sector which is a major contributor to the economy, for example in the whisky and aquaculture industries.

There are many other less tangible ways in which our natural assets sustain us, by contributing to our health and wellbeing, enjoyment of the outdoors, sense of place and who we are as a nation. Scotland has shown leadership on natural capital. Natural capital underpins Scotland's Economic Strategy, and it is embedded within our National Performance Framework. To further acknowledge the importance of natural capital, we support the Scottish Forum on Natural Capital which brings together the private, public and third sectors, and aims to ensure that the concept of natural capital influences decision making at all levels.

In 2011, Scotland was the first country in the world to publish a Natural Capital Asset Index ^[26] , which monitors annual change in natural capital based on the environment's ability to provide vital ecosystem services. Recent assessment indicates that our stock of natural capital was in decline until the late 1990s but has since stabilised and slightly improved since 2000.

According to the Millennium Ecosystem Assessment ^[27] , by the end of this century climate change is likely to become a significant driver of biodiversity loss and will cause adverse changes on land and in our seas. Natural environment and biodiversity are inherently linked with action on climate change mitigation and adaptation ^[28] . Ecosystems and species diversity are essential in the global carbon cycle as they capture and store carbon. Degraded ecosystems and decline in species diversity affects the provision of ecosystem services essential to human wellbeing and the effective removal and storage of atmospheric carbon.

Climate change can shift the natural carbon cycle towards annual net emissions by reducing the ability of terrestrial ecosystems and oceans to capture carbon, thus further accelerating climate change ^[29] . The conservation and restoration of biodiversity and ecosystems can help to regulate the climate by preventing emissions and by capturing carbon in plants, oceans and soil. Healthy and resilient ecosystems have the potential to mitigate some of the vulnerabilities caused by future effects of climate change both in Scotland and abroad. The combined efforts of preservation, conservation and restoration of Scotland's ecosystems offer opportunities to meet the overall objectives of the Convention on Biological Diversity ^[30] , Scotland's Biodiversity Strategy, Scotland's emissions reduction targets and the Sustainable Development Goals.

We know that Scotland's climate is already changing. Our transition to a low carbon economy will help to mitigate vulnerabilities caused by future changes in our natural assets, help to protect Scotland against emerging environmental risks affecting the economy and improve our resilience, particularly among vulnerable communities both in Scotland and abroad. Scotland's path towards decarbonisation will create a positive environment for green investment, help encourage natural capital to be taken into account in business decision making and encourage innovation and low carbon technologies.