Just Transition Commission: A National Mission for a fairer, greener Scotland

Introduction

"The imperative of a just transition is that Governments design policies in a way that ensures the benefits of climate change action are shared widely"

Climate action, fairness and opportunity must go together. Taking action to tackle climate change must make Scotland a healthier, more prosperous and more equal society, whilst restoring its natural environment. We want a Scotland where wellbeing is at the heart of how we measure ourselves and our prosperity. We know that the scars from previous industrial transitions have remained raw for generations. We know that some more recent aspirations for green jobs have not delivered on all the benefits promised for Scottish workers and communities. We need rapid interventions to fully realise the potential (and mitigate the potential injustice), associated with the net-zero transition.

The Commission started its work in early 2019, with a remit to provide practical, affordable, actionable recommendations to Scottish Ministers. We have travelled the country, listening to people's views about the kind of transition that is needed to tackle our contribution to climate change. When the pandemic arrived, we continued these conversations online. It is clear there is huge appetite across Scotland for a just and fair approach to tackling climate change that truly leaves no one behind, whilst strengthening Scotland's wellbeing. In this report, we have tried to distil what we have learned throughout the course of this work.

Much has changed since we started our work: the Scottish Parliament passed new legislation in 2019, setting a target of net-zero emissions by 2045. In December 2020, the Scottish Government published an updated Climate Change Plan setting out how it intends to meet these new targets. Both of these provide important context, which we have used to frame this report.

The extent of Covid-19's impact on society is yet to be fully understood. In addition to the devastating health impacts, the pandemic may well continue to influence travel patterns, the way we work, the speed of the digital revolution and the structure of global supply chains in the years ahead. Our Green Recovery report (July 2020) – highlighted evidence that while the whole country had accepted the need for collective action and sacrifices, the most disadvantaged in our society had borne the highest cost of the pandemic. We recommended a range of immediate actions to address this in a green recovery, which still stand as building blocks for a just inclusive climate action. ^[1]

Our understanding of net-zero has also developed since we started our work. There is an ever-growing consensus around the urgency of this goal and recognition that tackling climate change is also vital for long-term prosperity. We have seen great examples of businesses, communities and consumers benefiting from action on climate change here in Scotland. The financial costs associated with meeting our climate change targets are now believed to be lower than previously estimated.^[2] But the distribution of costs and benefits is unlikely to be equitable or fair without careful attention.

Without broad-based support, and in particular without the buy-in of workers and communities, progress towards net-zero will not be achieved. A successful transition will need to be underpinned by a strengthening of social partnership working in Scotland, with Government, business, trade unions and communities coming together to work towards a shared goal.

Internationally, just transition has often been associated with mitigating injustices after they have arisen;^[3] it has usually been concerned with transitions in the energy sector and the impact on workers arising from developments such as the phase-out of coal power generation. Our work has taken a broader approach, seeing just transition as a crucial concept for consumers, people and place; it is based on ensuring social justice across a range of settings, including (but not limited to) energy sector workers.

In our interim report we summarised the challenge, and what we mean by a just transition, as:

"The imperative of a just transition is that Governments design policies in a way that ensures the benefits of climate change action are shared widely, while the costs do not unfairly burden those least able to pay, or whose livelihoods are directly or indirectly at risk as the economy shifts and changes."

This has guided us through our work. We have explored how the transition to net-zero can be used as a positive opportunity to tackle existing inequalities and to build a society that prevents injustice from occurring in the first place. This vision of a just transition seeks to identify how climate action can build our collective wellbeing.

The scale of the challenges posed by ending our contribution to climate change can feel daunting: sweeping structural changes will affect many facets of our day-to-day lives. But it is clear that building social justice into climate action should not be seen as a burden, or an optional element of the transition. We must tackle climate, social and economic challenges at the same time. We can take positive steps towards building a net-zero country that is also a fairer country.

Recognising the transition as a collective endeavour can be a powerful catalysing force for national renewal as we emerge from the harms caused by the pandemic. We need to meet our climate change targets, and pursue the promise of good quality green jobs, revitalised communities, and improved health. These are all attainable goals and are well worth striving for.

This report sets out our view of some of the key challenges that need to be addressed if we are to deliver a just transition here in Scotland. It recommends practical steps that could be taken. We have tried to include examples – mostly good but sometimes salutory lessons – that we can learn from. Quotes from our call for evidence are included as a powerful reminder of the potential this transition offers. Case studies give a flavour of what has already been achieved. Finally we look ahead to the future of just transition in Scotland and consider what arrangements may be needed to maintain momentum behind this agenda.

Our work over the last two years has resulted in a range of recommendations for Scottish Government, and others. However, we can summarise our call to action in four simple messages:

1. Pursue an orderly, managed transition to net-zero that creates benefits and opportunities for people across Scotland. Delivery of this must be a national mission

Fundamental changes to the way we live, work and do business could have a positive impact on Scotland's overall economy. The impact will differ widely across sectors and regions. Just transition roadmaps will give direction and confidence, driving investment that brings jobs, skills and value to Scotland; stakeholders will work together on robust plans; government business support will be more explicitly linked to emissions reductions, stronger local supply chains and Fair Work. These fundamentals can be a catalyst for action across the public and private sectors.

2. Equip people with the skills and education they need to benefit from the transition

Scotland's citizens need to be supported to take up new opportunities and adapt to changes that could affect them. We need a flexible and accessible skills and education system that can meet the needs of a net-zero economy and address inequalities. Specific interventions will be needed for some, such as those in carbon-intensive industries, farmers and land managers and small businesses, particularly in construction and transport.

3. Empower and invigorate our communities and strengthen local economies

An inclusive green recovery from the pandemic ensures people have a say in climate action and strengthens local economies. A just transition is shaped by Scotland's citizens, not imposed on them. It energises social partnerships and local democracy and develops places and communities that are designed for net-zero and improved wellbeing. It empowers consumers to choose local products, such as sustainably produced food and drink.

4. Share benefits widely and ensure burdens are distributed on the basis of ability to pay.

Our current approach to funding decarbonisation is not fit for purpose. The adoption of new technologies and new ways of buying and selling electricity will rapidly increase as we move to net-zero. Smart innovations and modifications in transport, housing and energy systems will not all be universally accessible and may exacerbate existing inequalities. A just transition refocuses on wellbeing; it uses the power of government intervention and public finance (such as the Scottish National Investment Bank and public pension funds) to drive action; it explores new funding methods for local projects; it fully explores the distributional impact of taxes; it ensures new technologies and services are delivered in a way that works for people, and improves the lives of the most vulnerable in our society.