Strategic Environmental Assessment (SEA) for the Agricultural Tenancies proposals Environmental Report

Overall, Option D1 is likely to perform the strongest in relation to biodiversity and geodiversity. By directly enabling habitat restoration, tree planting, peatland restoration and other nature-based solutions, D1 provides the clearest benefits for enhancing priority habitats and species, improving ecological connectivity, supporting recovery of declining species, and restoring degraded areas. It provides the most opportunities for tenant engagement with conservation activities on their land, through enabling an understanding of how to implement these physical changes and monitor and manage the restoration and enhancement of habitats and associated species. As a result, increased levels of environmental enhancements across agricultural landholdings are likely to provide additional opportunities to access biodiversity, not only for tenants but the wider general public.

In contrast, Option D2, is less likely to provide direct benefits for biodiversity or opportunities for biodiversity engagement. The focus on commercial diversification may result in greater efforts to facilitate renewable energy production, or recreational and leisure activities. Depending on the activities selected, these may pose risks to biodiversity through potential habitat loss, fragmentation, disturbance and other impacts associated with development. However, co-benefits could be delivered if diversification is delivered through means such as ecotourism activities.

A mixed Option D3 can balance economic and environmental goals, providing moderate biodiversity benefits through its environmentally focused components, while also enabling sustainable commercial diversification. With careful spatial planning and application of the mitigation hierarchy, Option D3 could optimise outcomes for both biodiversity and tenants but would not provide the same scale of ecological benefits as the more conservation-driven Option D1. In summary, the assessment indicates that Option D1 would be most supportive of biodiversity objectives, while Option D2 would require more significant safeguards.

Overall, Option D1 is most supportive of climate goals and provides the clearest climate benefits. By facilitating interventions such as tree planting, peatland restoration, and other nature-based solutions, it directly contributes to carbon sequestration and enhancing natural carbon sinks. This will help mitigate climate change by removing and storing more carbon in soils and biomass. D1 would also enable changes in land use like wetlands and floodplain restoration that, if appropriately placed, could increase the resilience of agricultural land to impacts of extreme weather events like floods and droughts. This will help tenants effectively manage existing and emerging climate change pressures. This would support the development of landscape-scale resilience to the impacts of climate change. While this option may result in positive impacts relating to nature-based climate solutions, it may not though offer the flexibility required to meet ambitions relating to renewable energy production and mixed-use land models.

Option D2 would likely provide additional opportunities for renewable energy development to support national net-zero targets. However, it does little to directly enable natural climate solutions or adaptation on tenanted landholdings. Any climate mitigation or adaptation benefits under these options would be indirect and dependent on whether revenue from commercial diversification is invested back into natural climate solutions. Without careful strategic/landscape scale management, there is also a risk that carbon sequestration and storage from natural assets may decrease under D2 if natural areas are converted to commercial uses. Option D3 takes a balanced approach that incorporates elements of both environmental and commercial diversification. This provides some support for nature-based mitigation and adaptation, while also offering revenue generation opportunities that could indirectly support climate action. However, the climate adaptation benefits are more moderate under D3 compared to the direct, targeted impacts of Option D1. It is though likely to perform stronger on mitigation by offering more flexibility to tenants as to how they contribute to net zero targets, including through encouraging opportunities for renewable energy development.

In summary, the analysis shows Option D1 as potentially providing the strongest adaptation benefits and potential avenues to mitigate climate change through creation, enhancement and protection of natural assets. However, while Option D2 would rely on indirect effects and safeguards to avoid the increasing pressures of climate change, it does provide the most potential opportunities for renewables like solar, wind, biomass energy on agricultural land. In this respect Option D3 may offer a compromise for both adaptation and mitigation that makes contributions on both the environmental and economic fronts.

Option D1 would provide additional benefits for protecting landscape character and quality. By directly facilitating habitat restoration, tree planting, and other nature-based solutions, Option D1 has the potential to reinforce and enhance landscape character and align with the management objectives of protected areas like National Scenic Areas. However, it may negatively impact the current baseline of these NSAs, in terms of their special qualities, which may in some cases be characterised by the arable and agricultural use of the land. In this respect activities such as tree planting would have a dramatic impact on a landscape dominated by agriculture, creating new features that have not been typically associated with those areas. Option D1 could also result in mixed effects on the historic environment. On the one hand it may support the conservation of traditional agricultural landscape features such as hedgerows and stone walls. On the other hand, moving land away from agricultural use may risk the loss of traditional practices, and changes in local character. It should be noted though that diversification may provide a greater level of income for tenants, and this may allow for resources to be used to restore or better reveal the significance of features and area features of architectural or historic interest.

In comparison, Option D2 which focuses on commercial diversification poses risks of detrimental impacts on both landscapes and historic assets through associated development pressures. Unless properly planned and mitigated, development associated with tourism infrastructure, renewable energy infrastructure, and commercial facilities could erode rural landscape character and adversely affect the setting of heritage features. Option D2 is also less likely to directly enhance landscape quality. However, it may allow for historic features and assets to be repurposed, thus helping to protect and enhance historic buildings, structures and features, and secure their ongoing utilisation. As with Option D1, diversification of any kind is likely to pose a risk to conserving the cultural heritage associated with traditional agricultural practices as further revenue avenues provide different land management options.

Option D3, the balanced approach, can provide moderate enhancements through habitat creation and reinforcing the cultural heritage value of agricultural practices, while revenue-generating activities could help fund landscape improvements. However, as per Option D1 and D2, D3 still carries risks of landscape and heritage impacts that would require careful siting and mitigation measures. In summary, Option D1 is likely to offer the most direct landscape and historic environment benefits, Option D2 the highest risks requiring more substantial avoidance and mitigation measures, with Option D3 sitting between the two other options in terms of impacts to landscape and historic environment.

Option D1 provides the clearest benefits for maintaining and enhancing soil and water quality by enabling regenerative agriculture practices which support regulating ecosystem services. This includes, potentially, through facilitating participation in environmental markets. Specifically, this would allow tenants easier access to emerging carbon, water quality, and biodiversity markets that provide payments for practices like cover cropping, riparian buffers, and habitat restoration. However, proving additionality (i.e. that the benefits delivered are additional/new to what is being currently provided) and stacking of ecosystem services (i.e. where multiple ecosystem services or benefits are being claimed by one intervention) would need to be addressed to ensure the integrity of these environmental markets is upheld.

While revenue from commercial diversification could theoretically fund conservation practices, Option D2 does not directly require or enable activities that enhance soil or water. Although taking land out of agricultural rotation could result in fewer negative inputs, such as fertilisers into the soil and water systems which could in turn deliver improvements within those systems. However, any construction relating to facilitating tourism or renewable energy activities, for instance, may result in short term disturbance and impacts on these systems. Option D2 is also unlikely to result in directly participation of environmental markets that incentivise practices that focus on soil and water quality.

Option D3 provides some soil and water quality benefits through being likely to facilitate some adoption of regenerative practices and participation in environmental markets. However, the benefits are more limited when compared to Option D1, and risks from commercial activities would still need to be managed. In summary, Option D1 provides the clearest direct and proactive approach to soil and water quality enhancements by removing barriers and encouraging regenerative agriculture practices and leveraging environmental market opportunities. Options D2 and D3 are, in contrast, more likely to result in indirect benefits or require risk avoidance measures.

Option C1, which continues the status quo compensation arrangements is unlikely to provide improvements in biodiversity outcomes. By not compensating tenants for taking land out of agricultural production for conservation purposes, C1 offers limited incentives for priority habitat restoration, species protection, or enhancing connectivity. In this respect it maintains the existing disincentives for tenants to engage in biodiversity initiatives.

In contrast, Option C2, which enables compensation for environmental enhancements, would significantly benefit biodiversity and geodiversity. By compensating tenants for activities like habitat restoration and tree planting, C2 provides direct incentives for conservation and nature positive outcomes actions that support protected species, ecological connectivity, and recovery of declining populations. It is also likely to promote tenant engagement through participation in habitat improvement projects.

Overall, while Option C1 maintains the status quo, Option C2 would enable transformative biodiversity and geodiversity positive effects by compensating tenants for delivering environmental benefits through changes in land use. Compensation for nature-positive farming under C2 offers the most potential for biodiversity benefits. This approach will therefore do most to support efforts to meet international and national biodiversity commitments by enabling agricultural tenants to restore habitats and support the management of protected areas.

Option C1 does little to deliver positive effects in terms of climate change outcomes. By not providing incentives for tenants to undertake activities like tree planting, peatland restoration or diversification to mixed land uses, C1 upholds existing barriers to nature-based carbon sequestration and landscape-scale climate adaptations. It also does less to provide the mechanisms to encourage the shifts needed to support net zero targets or bolster climate mitigation and resilience.

In contrast, Option C2 would likely provide new incentives to drive significant positive effects relating to climate change. By compensating tenants for taking land out of production for nature restoration and climate-positive practices, Option C2 encourages tree planting, peatland restoration, wetland creation, and other activities that sequester carbon, reduce emissions, and increase climate resilience. Overall, while Option C1 continues the existing incentives for climate action, Option C2 is likely to do more to spur progress by rewarding tenants for delivering climate solutions through diversification.

Option C1 is unlikely to improve landscape or heritage outcomes. By not rewarding tenants for conservation activities, C1 provides no new incentives for landscape or nature enhancements like tree planting or habitat restoration that could result in positive effects for scenic quality. It also maintains disincentives for preserving agricultural heritage features such as buildings of historic interest. However, it may also encourage protection of features that are considered a component of good farming such as stone walls. On balance, Option C1 represents status quo conditions.

In contrast, Option C2, which compensates tenants for environmental improvements, could act as a catalyst to deliver landscape and historic environment benefits. By incentivising nature restoration and the conservation of rural heritage assets, C2 promotes activities that can preserve scenic beauty, or conserve traditional agricultural structures and practices. It should be noted though there is a risk this option may negatively impact the current baseline of areas of distinctive landscape character, which may be characterised by arable and agricultural land use. In this respect activities such as tree planting can have an impact on a landscape dominated by agriculture, creating new features that have not been typically associated with those areas.

Overall, while Option C1 retains existing barriers to environmental enhancements, Option C2 enables more transformational improvements to valued Scottish landscapes and historic rural assets to take place by flipping incentives to reward tenants for stewardship. In this respect compensation for nature restoration may unlock significant landscape and heritage opportunities, due to the additional revenue stream.

Option C1, which retains current compensation rules, misses opportunities to improve soil or water outcomes. By maintaining disincentives for tenants to implement many regenerative or conservation practices, C1 does less to encourage activities like cover cropping, wetland restoration, or leveraging environmental markets that could enhance soil health and water quality. It preserves the status quo. Conversely, Option C2, which compensates tenants for environmental enhancements, incentivizes practices that boost soil and water quality. C2 encourages regenerative approaches such as no-till farming and access to emerging environmental markets that financially reward sustainable farming. This provides new incentives for tenants to actively improve soil conditions and reduce nutrient runoff. By more effectively compensating activities like cover cropping or riparian buffers, C2 enables tenant participation in schemes that pay farmers for implementing practices that could improve the soil and water quality. As such, this may result in avenues which support the uptake of regenerative approaches and leverages environmental markets to improve soil and water outcomes.

Overall, Option C2 will do more that Option C1 to catalyse regenerative agriculture and conservation practices that restore degraded soils, reduce pollution, and allow participation in environmental markets. Focusing incentives to reward stewardship is therefore likely to unlock opportunities for soil and water quality enhancements.

Overall, both Option WG1 and Option WG2 are likely to have neutral effects in relation to biodiversity and geodiversity. Neither option directly enables enhanced protection for priority habitats and species, improved ecological connectivity, stronger species recovery, increased opportunities for biodiversity engagement by tenants, or better access to understanding biodiversity. As such, timeframes for waygo compensation do not appear to have a significant relationship with on-the-ground biodiversity outcomes.

In summary, while a lengthy waygo process can cause socio-economic challenges, shortening the duration alone does not translate into clear biodiversity improvements. In this respect the waygo timeframe options do not significantly sway outcomes in either a positive or negative direction; in this respect they maintain existing trajectories rather than providing a platform for improvement.

Maintaining the current duration under Option WG1 or reducing it under WG2 does not directly enable nature-based carbon sequestration through tree planting and peatland restoration, spur investment into natural climate solutions, or build climate resilience of agricultural tenancies. The timeframe for compensation claims is largely unrelated to on-the-ground implementation of mitigation and adaptation measures.

In summary, while a prolonged waygo process causes socio-economic challenges, simply shortening the duration does not translate into clear climate benefits. Both options essentially uphold the status quo conditions relating to carbon sequestration, renewables development, and climate resilience of rural holdings. The waygo timeframe options maintain Scotland's existing climate trajectory rather than accelerating or hindering progress.

Option GH1, which retains the traditional definition of good husbandry, limits positive biodiversity and geodiversity outcomes beyond maintaining standard agricultural practices. By not formally integrating regenerative, sustainable and conservation principles, GH1 misses opportunities to actively protect and restore threatened habitats and species or improve ecological connectivity on tenanted lands. It represents a business-as-usual trajectory.

In contrast, expanding the legislative definition under Option GH2 to embed environmental considerations would enable on-the-ground delivery of positive biodiversity and geodiversity outcomes. Formally requiring climate-smart, regenerative, and nature restoration practices would align good husbandry obligations with national and international biodiversity ambitions. As such, Option GH2 creates a pathway for tenants to help support the recovery of declining species populations, enhance protected areas, and engage directly in habitat restoration activities through a holistic approach to tenancy management.

Overall, while Option GH1 maintains the status quo, integrating environmental principles under Option GH2 unlocks significant biodiversity opportunities through good husbandry reform.

Option GH1 is unlikely to provide climate benefits beyond status quo conditions. It does not formally integrate practices that support tree planting, peatland restoration, carbon sequestration through regenerative agriculture, or ecological resilience. GH1 therefore represents a missed opportunity to leverage good husbandry reform for climate progress.

In contrast, expanding obligations under GH2 would create clear pathways to deliver climate solutions through tenancy management. Embedding climate-smart regenerative practices like cover cropping, no-till, and composting would mitigate climate change by increasing carbon sequestration. Activities such as integrating buffer strips, hedgerows, wetlands, and mixed crop-livestock systems could support ecological resilience and support adaptation to the effects of climate change.

Overall, while Option GH1 maintains existing barriers, Option GH2 enables good husbandry obligations to drive progress through climate-smart regenerative practices that mitigate emissions and support resilience.

Option GH1 is unlikely to result in significant positive impacts for landscape quality or the conservation and enhancements of heritage assets. By maintaining status quo obligations, GH1 misses opportunities to integrate practices that could benefit landscape character, improve the condition of historic features like stone walls or archaeological sites, or expand public understanding and interest in traditional farming methods.

In contrast, GH2 enables broader opportunities to realise landscape and heritage benefits through tenancy management reforms. Integrating habitat restoration and regenerative principles could enhance scenic qualities, while expanded obligations could require proactive conservation of rural heritage assets. Educational components could also improve public awareness of historic agricultural practices.

Overall, while Option GH1 represents business-as-usual with limited potential gains, Option GH2 unlocks significant opportunities to align good husbandry duties with goals to improve valued Scottish landscapes and conserve agricultural heritage. An expanded definition therefore creates additional pathways for supporting landscape character and conserving and enhancing the historic environment

Option GH1 would provide incremental soil and water benefits at best compared to the status quo. While some existing agricultural practices, such as rotational practices form a foundation, they have mixed results for improving soil health, reducing erosion, and mitigating nutrient runoff issues.

In contrast, expanding legislative obligations under Option GH2 creates clear opportunities to deliver significant soil and water quality improvements through tenancy management reforms. Formally integrating regenerative practices such as cover cropping, conservation tillage, riparian buffers, and wetlands would provide pathways to actively enhance soil health while reducing runoff and erosion.

Overall, while Option GH1 represents a business-as-usual trajectory of modest potential gains, Option GH2 enables robust soil and water stewardship through expanded good husbandry duties aligned with environmental goals. In this respect reforming the legislative definition relating to good husbandry would help unlock water and soil benefits.

Option S1, which takes a prescriptive approach, is likely to provide relatively limited positive biodiversity and geodiversity outcomes beyond maintaining current practices. Constraining opportunities to predefined improvements on the list risks missing opportunities for enhancing priority habitats and species, improving connectivity, supporting species recovery, enabling tenant engagement, and restoring degraded ecosystems. This may also offer a rigidity to the legislation, which makes it difficult to embed new techniques and methods which may become applicable in the near future.

In contrast, the flexible principle-based approach under Option S2 creates opportunities to achieve positive biodiversity outcomes by opening up eligibility for regenerative activities aligned with sustainability principles. However, the lack of concrete examples carries some uncertainty, particularly in terms of providing sufficient information to effectively guide tenant farmers. Option S3 combines the adaptability of principles with the clarity of representative examples that illustrate biodiversity enhancing practices.

Overall, both principle-based approaches in Options S2 and 3 will facilitate an adaptive approach with the ability to reflect leading-edge approaches in biodiversity management, including sustainable agriculture and nature restoration activities. Option S3 couples principles with examples to provide helpful definition, creating clear pathways for mutually reinforcing productivity, conservation and restoration improvements.

While expanding the prescriptive list under Option S1 may incorporate some defined activities like tree planting and peatland restoration to support net zero efforts, the inherent inflexibility of a prescriptive list constrains the ability to continually add emerging innovations over time. This is particularly pertinent when considering technological advances in the renewable sector, for instance. As such, Option S1 could result in positive environmental impacts relating to climate change but carries ongoing limitations.

In contrast, the flexible principle-based approach proposed under Option S2 enables much greater adaptability to support a wider array of nature-based carbon sequestration activities both now and in the future as climate mitigation and adaptation practices evolve. However, the lack of concrete examples carries some uncertainty on what specific activities would be enabled and may result in a knowledge barrier in terms of how to actually deliver the said principles. Option S3 balances the strengths of defined activities and flexible principles by coupling representative examples with adaptability for future innovations. The examples could provide clarity on the activities which are appropriate today, while accommodating new practices over time as mitigation and adaptation needs evolve.

Overall, while Option S1 and S2 may result in moderate positive outcomes, Option S3 realises the full potential by blending principles and examples to provide defined pathways while maintaining future adaptability. This enables transformative climate progress through regenerative agriculture and nature-based solutions.

While expanding the prescriptive list under Option S1 incorporates some defined activities that could provide incremental benefits for landscape character and the conservation of heritage assets, the inherent inflexibility of the approach constrains the ability to continually add emerging innovations over time. In this respect Option S1 makes moderate improvements but carries ongoing limitations.

In contrast, the flexible principle-based approach proposed under Option S2 enables much greater adaptability to support a wider array of landscape enhancements and heritage conservation activities as practices evolve. However, the lack of concrete examples carries some uncertainty on what specific activities would be enabled.

Option S3 balances the strengths of defined activities and flexible principles by coupling representative examples with adaptability for future innovations. The examples provide clarity on the appropriate landscape and heritage activities that can be utilised today, while the principles accommodate adding new practices over time. Overall, Option S3 realises the full potential by blending principles and examples to provide defined pathways linked to clarity and guidance, while maintaining future adaptability.

While expanding the prescriptive list under Option S1 incorporates some defined regenerative activities that could provide incremental benefits for soil health and water quality, the inherent inflexibility provided by the approach constrains the ability to continually add emerging innovations over time. This is particularly important in relation to soil, as understanding and research into the function of soil ecosystems is improving and expanding.

In contrast, the flexible principle-based approach under Option S2 enables greater adaptability to support a wide array of soil-enhancing and water-protecting activities both now and in the future as practices evolve. However, the lack of concrete examples carries some uncertainty on the types of specific activities that could be enabled. As per S1, given the emerging research and understanding around soil science, a lack of specific examples of how to improve soil health may result in difficulties in terms of the delivery of these principles through agricultural tenancies.

Option S3 balances the strengths of defined activities and flexible principles by being likely to couple representative examples of practices to improve soil and water health with adaptability for future research and innovation. The examples provide clarity on activities allowed today, with the principles accommodating adding new practices over time. Option S3 therefore realizes the full potential by blending principles and examples to provide defined pathways for maintaining and enhancing soil and water quality linked to clarity and guidance while maintaining future adaptability.