Scottish natural capital: ecosystem service accounts 2019

6. Regulating services

As well as tangible provisioning services, natural assets in Scotland provide a number of typically intangible regulating services, such as cleaning the air, sequestering carbon and regulating water flows to prevent flooding.

This section presents two such ecosystem services that are classed as regulating ecosystem services: carbon sequestration and air pollutant removal from vegetation. 

The pollutants covered in pollution removal are:

• PM2.5
• PM10
• nitrogen dioxide (NO2)
• ground-level ozone (O3)
• ammonia (NH3)
• sulphur dioxide (SO2)

PM2.5 is a component of PM10. 

Air pollution leads to respiratory diseases in humans and the risk of those diseases for a population can be estimated based on the levels of pollution and the health costs of that disease. 

Interrelating biological processes underpin both carbon sequestration and air pollution removal. Underpinning carbon sequestration and air pollution removal trends are the emissions levels that are available to be removed.

Please note the valuation methods used differ; carbon sequestration valuation is a removal cost and air pollution removal valuation is a societal cost. To put it another way we are valuing the cost of avoiding damage (for carbon) and the cost of treating damage that has already happened (for air pollution). Air pollution removal valuation does not consider the cost of abatement and carbon sequestration valuation does not consider the global societal impacts of carbon dioxide.

Although, over the time series, carbon sequestration removes on average 37 times more tonnes than air pollution removal, the valuation of air pollution removal was on average 3.5 times greater per tonne. In 2016, carbon sequestration was 15.5 million tonnes and air pollution removal was 0.4 million tonnes, valued at £995.7 million and £61.8 million respectively (see Figure 15).

Figure 15: Valuation of carbon sequestration reached record high in 2016

Annual value of regulating services, Scotland, 2007 to 2016

Source: Office for National Statistics, Centre for Ecology and Hydrology and National Emissions Inventory 

Both carbon sequestration and air pollution removal are cross-cutting ecosystem services, which are provided by a range of broad habitats, although woodland is the primary supplier in both cases. Analysis of these two services are covered in more depth in the following sections. 

Carbon sequestration

Due to data constraints, values related to carbon sequestration by marine ecosystems, including those intertidal areas such as coastal margins, are not included in current estimates. As a result, annual flow values related to carbon sequestration services are likely to be an underestimate.

Carbon sequestration in Scotland has increased gradually since 1998 

Overall the estimated carbon sequestration for Scotland has increased 26.0% from 12.3 million tonnes of carbon dioxide equivalent (MtCO2e) in 1998 to 15.5 MtCO2e in 2016, which is the highest figure on record. 

From 1998, carbon sequestration increased steadily year-on-year, reaching a high in 2010 (15.2 MtCO2e) before declining for two consecutive years to 13.4 MtCO2e in 2012. After 2012, carbon sequestration rose, reaching a series high in 2016 of 15.5 MtCO2e (see Figure 16). These trends are largely driven by changes in the age structure of woodland, due to annual felling and planting, as younger trees will sequester less carbon. 

Carbon sequestration occurs almost entirely in woodland and grassland, 78.0% and 22.0% respectively. Meanwhile, cropland and wetlands contributed a maximum of 0.2% towards the overall carbon sequestration in Scotland. 

Figure 16: Carbon sequestration in Scotland reached a record high in 2016

Carbon sequestration for of grassland and woodland, Scotland, 1998 to 2016

Source: Office for National Statistics and National Atmospheric Emissions Inventory (NAEI)

Projected Scottish carbon sequestration is estimated to decline to 8.7 MtCO2e in 2050. This reduction is due to the projected decline of carbon sequestration in woodland whilst projected grassland carbon sequestration shows small increases.

The regulating service of carbon sequestration valuation has increased 60.5% from £604.4 million in 1998 to £995.7 million in 2016. This trend has been driven both by increases in sequestration and steady increases in the non-traded price of carbon (1.5% annual growth over this period), which is projected by the Department for Business, Energy and Industrial Strategy (BEIS) to keep increasing in real terms until around 2080. In 2016, the carbon sequestration regulating service was valued at £776.2 million for woodland and £219.3 million for grassland. 

Despite decreasing carbon sequestration, the annual valuation is projected to grow, driven by increases in carbon cost, to £1,969.2 million; £1,068.3 for woodland and £900.9 million for grassland. 

As with Scotland, the UK’s carbon sequestration has fluctuated since 1998 but peaked in 2015 at 34.5 MtCO2e before falling back to 34.4 MtCO2e in 2016. 

In 1998, Scotland represented 40.9% of overall UK carbon sequestration. This proportion has steadily increased to 45.1% in 2016. In 2016, Scotland represented over half (50.4% or 12.1 MtCO2e) of UK woodland carbon sequestration (24.0 MtCO2e), growing from 46.6% in 1998. In 2016, Scotland also represented more of the UK grassland carbon sequestration than it did in 1998, growing from 27.5% to 32.8%. As Scotland and the UK share the same non-traded cost of carbon, annual valuations reflect their physical flow relationship. 

Air pollutant removal by vegetation

Avoided health damage costs in Scotland decline due to a reduction in the absorption of the most harmful air pollutants 

Air pollutant removal data have been modelled for 2007, 2011, 2015 and 2030. Between these years linear interpolation has been used as an estimation of pollution removal. As with all methods, this method is under review.

The pollutants covered are PM2.5, PM10, nitrogen dioxide (NO2), ground-level ozone (O3), ammonia (NH3) and sulphur dioxide (SO2).

Between the years 2007 to 2017, pollution removal in Scotland decreased 2.3% from 409.2 thousand tonnes to 399.7 thousand tonnes (see Figure 17). Much of this decline is accounted for by a reduction in air pollution removed by woodland, which fell by 4.2% between the years 2007 and 2017. This declining trend is largely due to less pollution being emitted into the atmosphere for vegetation to remove, rather than a reflection of changing condition, extent or species mix of vegetation. 

Pollution removed in Scotland fell to 387.2 thousand tonnes in 2011 and this was primarily due to a fall in ground level ozone pollution removal across all habitats, particularly the woodland habitat. After 2011, overall pollution removal increased, peaking in 2015 to 401.0 thousand tonnes, before falling for two consecutive years. 

Figure 17: Pollution removal declined between 2007 and 2017

Pollution removal, Scotland, 2007 to 2017

Source: Office for National Statistics and Centre for Ecology and Hydrology 

Ground-level ozone (O3) represented the majority of total pollution removal (over 90%) from 2007 to 2017. However, the most harmful pollutant is PM2.5 (fine particulate matter with a diameter of less than 2.5 micrometres, or 3% of the diameter of a human hair), which can bypass the nose and throat to penetrate deep into the lungs, leading to potentially serious health effects and healthcare costs. This can be seen in Figure 18, with the removal of PM2.5 accounting for 88% (£52.3 million) of all avoided healthcare damage costs in 2017. 

Figure 18: The removal of PM2.5 from the atmosphere led to an overall saving in health damage costs of £52.3 million in Scotland during 2017

Avoided health damage costs by pollutant removed, Scotland, 2017

Sources: Office for National Statistics and Centre for Ecology and Hydrology

It should be noted that absolute pollution removal of all pollutants is largely ground-level ozone (O3) (91.9%) removal. Between the years 2007 to 2017, whilst other habitats provided significant contributions to ground-level ozone (O3) removal, woodland removed the majority (average of 84%) of the most harmful pollutant of PM2.5 (see Figure 19).

Figure 19: Woodland removes the most harmful pollutants during 2017

Pollutant removed by habitat, Scotland, 2017

Source: Office for National Statistics and Centre for Ecology and Hydrology 

Note: 1. PM2.5 is a component of PM10.

The pollution removal regulating service is valued through avoided health damage cost modelling, detailed in Section 9 of this publication. The annual valuation of pollution removal for all habitats declined by 39% between the years 2007 and 2017, from £98.0 million to £59.6 million (see Figure 20). As noted earlier, this declining trend is largely due to less pollution being emitted into the atmosphere. 

Woodland makes up the majority of avoided health damage costs due to woodland removing the majority of the most harmful pollutant (PM2.5) (see Figure 20). However, the removal of PM2.5 by woodland has fallen by 28% between the years 2007 and 2017. Therefore, the fall in the annual value can be attributed to the fall in the amount of PM2.5 removed by woodland.

Figure 20: Avoided health costs due to the reduction in harmful pollutants fall by nearly two-thirds between the years 2007 to 2017

Avoided health damage costs by habitat, Scotland, 2007 to 2017

Source: Office for National Statistics and Centre for Ecology and Hydrology

Despite habitats in Scotland removing on average 29% of the UK’s most harmful pollutants (PM2.5) over the time series, Scotland only made up on average 6% of the UK annual valuation from air pollutant removal. One reason behind this difference is the lower relative population, including large areas of low population density of Scotland, meaning there will be fewer avoided health damage costs from the removal of PM2.5. 

Pollution removal in Scotland followed a similar trend to the UK, with the amount of pollution removal dipping in 2011 before increasing again in 2015. This is partly due to pollution removal in Scotland making up around one-third of total air pollution removed in the UK between the years 2007 and 2017. Out of the six habitats reviewed, mountain moorland and heath (MMH) in Scotland accounted for around three-quarters of all air pollution removed by this habitat in the UK. This is not surprising as the majority of the UK’s MMH habitat is in Scotland.