Ecosystem services

Annual value of natural capital

The annual value measures the flow of ecosystem services in a given year. The net annual value of natural capital in Scotland was £38.7 billion in 2022, or £5.9 billion when oil and gas is excluded. As such, Scotland contributes 44% of the total UK annual value including oil and gas, or 12% excluding oil and gas.

Figure 1: Renewable electricity provisioning contributed most to Scotland’s annual value in 2022, excluding oil and gas.
Annual value of natural capital in Scotland in 2022, by ecosystem service.

Figure 1 breaks down Scotland’s annual value of natural capital in 2022 by type of ecosystem service. Oil and gas provisioning was the largest contributor, worth £32.8 billion. The remaining ecosystem services were valued at £5.9 billion. Of these, the highest-valued services were renewable electricity provisioning (£1.2 billion), water provisioning (£1.0 billion) and recreation and tourism expenditure (£0.9 billion).  The net annual value of regulating services was £0.1 billion.

Scotland’s annual value of natural capital increased from £14.8 billion in 2021 to £38.7 billion in 2022, as shown in Figure 2 below. Note that the annual value of renewable electricity provisioning in 2021 could not be calculated by the ONS, which means that the 2021 annual value for other provisioning services is lower than expected.

Figure 2: Fluctuating oil and gas prices explain most of the variation in Scotland’s annual value.
Annual value of natural capital in Scotland, from 2016 to 2022, by type of ecosystem service.

Variation in Scotland’s annual value is largely explained by fluctuating oil and gas prices. As Figure 3 shows below, the physical flow of oil and gas has in fact decreased slightly with little variation between 2016 and 2022. This change in oil and gas provisioning annual value therefore reflects a change in oil and gas prices, not a change in the physical output of oil and gas.

Physical flow of natural capital

Physical flow measures the output of an ecosystem service in non-monetary units, for example, tonnes of fish or number of tourism visits.

Figure 3: Renewable electricity provision almost doubled between 2016 and 2022, and oil and gas provisioning fell slightly.
Physical flow of provisioning ecosystem services in Scotland, 2016 to 2022. Indexed to 2016 baseline of 100.

The physical flow of some ecosystem services has changed substantially between 2016 and 2022. Coal provisioning has fallen to zero, whilst renewable electricity provisioning has almost doubled from 17,575 gigawatt hours in 2016 to 33,332 gigawatt hours in 2022. Oil and gas provisioning fell from 75 to 65 million tonnes of oil equivalent but its annual value, in monetary terms, increased around 6-fold from £5.4 billion to £32.8 billion (2023 prices).

Asset value of natural capital

In constrast to the annual value, which measures the flow of ecosystem services in a given year, the asset value measures the stock of ecosystem services and takes into consideration their future expected supply. The asset value for Scotland in 2022 was an estimated £254.7 billion including oil and gas, or £142.2 billion when oil and gas is excluded.