Just Transition - A Fairer, Greener Scotland: Scottish Government response

National Just Transition Planning Framework

The Just Transition Commission called on the Scottish Government to develop a consistent and ambitious approach to planning. In response, this section sets out our National Just Transition Planning Framework.

The rationale for establishing this Planning Framework is clear. We know that meeting Scotland's ambitious climate change targets of 75% greenhouse gas emissions reduction by 2030, and net zero greenhouse gas emissions by 2045, will require transformation across all sectors of our economy and society. Previous economic and social transformations, and indeed the experience of COVID-19, have shown how abrupt and unplanned shifts can exacerbate inequality and injustice. Planning for our transition will therefore be needed at all levels of our economy: industries, sectors, regions, and individual organisations.

Our Planning Framework is intended to inform and complement pre-existing work, including industry-led initiatives. Our approach emphasises iteration and flexibility: we call on others to reflect on our framework and seek to embed fairness, collaboration and engagement in their own planning, wherever that is feasible. The relationship between Just Transition Planning and the work of other stakeholders, and indeed other Scottish Government work, is described further below.

The Scottish Government will identify where it is best placed to act as convenor, facilitator, mediator for planning processes, bringing parties together and ensuring all voices are heard. The refreshed Scottish Government Energy Strategy will be our first specific Just Transition Plan and the process of Just Transition Planning will inform the development of the National Strategy for Economic Transformation (NSET). We will, in due course, set out a more detailed timeline for a series of Just Transition Plans which will support the delivery of the NSET.

The scope of Scotland's Just Transition Planning

Within the Commission's call for an orderly, managed transition was the recommendation to create specific Just Transition Plans for high-emitting industries. We welcome this recommendation and, as with all the recommendations in the Commission's final report, we are implementing it. However, planning can and must go beyond high-emitting industrial sectors to consider all sectors of our economy that will have an important role to play in a transformed, net zero economy.

Previous examples of Just Transition Planning around the world – such as the Ruhr valley in Germany, and coal mining in Canada, the US and the Czech Republic – have typically, although not exclusively, been 'fairly limited in scope, focussing mostly on retraining and job substitution'.^[11] There are also examples of more holistic and structural economic transformations, such as in Norway, Peru, and Taranaki in New Zealand. These transition plans have been designed to tackle specific regional needs or to plan for the phasing out of particular industries, often coal. Whilst many of these plans – in particular those associated with the US and EU's respective just transition funds – have informed our thinking, no country has developed a national Just Transition Planning Framework, until now.

We are therefore developing the Framework in a way that can be used by any industries, economic sectors, regions or individual organisations that have a role to play in transforming our economy. For example, our approach to Just Transition Planning could consider the future of industries like fishery, retail and hospitality alongside carbon-intensive sectors like oil and gas, construction, manufacturing and agriculture. It could also form the basis of community, business, site and regional planning, to be spearheaded by those best placed to take those Plans forward.

The scope of our proposed approach to Just Transition Planning is rightly ambitious, with an expectation that all planning activities contribute to achieving a set of National Just Transition Outcomes as detailed in Box X.

Box X – The Scottish Government's National Just Transition Outcomes

Citizens, communities and place: support affected regions by empowering and invigorating communities and strengthening local economies;

Jobs, skills and education: equip people with the skills, education and retraining required to support retention and creation of access to green, fair and high-value work;

Fair distribution of costs and benefits: address existing economic and social inequality by sharing the benefits of climate action widely, while ensuring that the costs are distributed on the basis of ability to pay;

Business and Economy: support a strong, dynamic and productive economy which creates wealth and high quality employment across Scotland, upholds the UN Guiding Principles on Business and Human Rights, and continues to make Scotland a great place to do business;

Adaptation and resilience: identify key risks from climate change and set out actions to build resilience to these risks, ensuring our economy is flexible, adaptable and responsive to the changing climate;

Environmental protection and restoration: commit to act within our planetary boundaries while protecting and restoring our natural environment;

Decarbonisation and efficiencies: contribute to resource efficient and sustainable economic approaches that actively encourage decarbonisation, support low-carbon investment and infrastructure, and avoid carbon 'lock-in';

Further equality and human rights implementation and preventing new inequalities from arising: address fuel poverty and child poverty in a manner consistent with Scotland's statutory targets on each, while furthering wider equality and human rights across all protected characteristics.

What is a Just Transition Plan?

The individual Just Transition Plans that the Scottish Government will develop from this framework will be evidence-based and co-designed (see Box Y). They will outline how the particular area of focus will reduce its greenhouse gas emissions in line with Scotland's climate change targets and in a way that supports the delivery of the outcomes in Box X for Scotland.

Each Plan will act as a guiding document for public and private sector activity up to, and including, 2045 (Scotland's target year for reaching net zero emissions). This will ensure the Plans, and their delivery, benefit those impacted by the transition to net zero by:

• Providing certainty for those involved in the transition (be they businesses, investors, consumers, or communities);
• Ensuring everyone understands the active role that they can play in the transition; and
• Identifying and mitigating economic or social injustice which may be exacerbated by climate action.

Integration with existing activity and planning, both by government and by partners, will be essential. We must not duplicate effort and we must ensure that we build on our collective relationships, experience and learning to date. This means that each Plan will vary in style, and in terms of the context in which it is developed and produced. We will seek confidence that the 'sum of the parts' is enough to achieve the outcomes we have set for just transition, and so in order to maximise impact (and monitor progress), we would expect the following principles to be core components of every Just Transition Plan.

Evidence-led to ensure that the Plans are credible and robust. This will be critical to ensuring that the distribution of the costs and benefits of transition are fully understood by all parties, and can support informed decision making.

This means identifying, acknowledging, and addressing the gaps in our knowledge of the potential impacts of the transition to net zero. Evidence must be made publicly available in a manner that is easily understood, including by those whom the transition will impact the most.

Evidence should then be used to identify a sequenced plan of action based on assessments of the risks and opportunities to affected groups, and to regularly monitor and evaluate the effectiveness of action.

Adaptable and iterative to account for the complexities and 'unknowns' inherent in long-term economic planning.

This means ensuring that Plans will, at a minimum, be reviewed alongside each new Scottish Government Climate Change Plan. This will enable those delivering Plans to respond to changes in technology, costs, global markets, and policy. We do not know every intervention we need to make between now and 2045, but this should not be a barrier to starting our transition.

Regular monitoring and evaluation will therefore form an essential part of this process.

Co-designed and co-delivered to ensure all partners are empowered to engage, and that action is fair and co-ordinated.

This means placing those most likely to be negatively impacted by the transition at the heart of our process – whether an offshore energy worker seeking re-training opportunities, or a farmer seeking seed capital to invest in sustainable food production. Empowering people to shape their future is essential in maintaining a strong social consensus for change.

Built upon existing work and experience. This includes work undertaken by the Scottish Government and partners to chart the transition to net zero.

'Business as usual' will not be enough in the face of this global emergency, and so the Plans need to reflect this, drawing on the views and ideas of those most impacted by the transition. Plans will need to identify interdependencies and interactions with and between existing plans and policies, and take a holistic view of risks and opportunities over a long-term time horizon (i.e. to 2045).

Box Y – The co-design planning process

'Co-design' ensures that a wide range of groups can be directly involved in what will inevitably be a more robust and creative process of planning. It will also help ensure that all the Just Transition Plans are underpinned by diversity and inclusion.

There are some voices which will be at the heart of all Plans, in particular workers. The concept of just transition is itself a trade union concept and what is proposed here will honour that legacy: the workforce is likely to be the first group to feel the impact of the net zero transition. Youth voices are also particularly important in this process given our intergenerational responsibility to deliver the best possible future for our young people; their voices must therefore be central to creating that net zero future.

Certain regions and certain groups within society will experience the transition to net zero more acutely than others and this disparity will need to be reflected in the level of engagement. This is particularly the case in areas where there are carbon-intensive industries that will be undergoing intensive, often rapid change. Understanding the barriers such areas face and what mitigation and support can be provided by Government, and others, will be vital to the success of any Just Transition Plan.

Case study – Taranaki 2050 Roadmap, New Zealand^[12]

Taranaki, New Zealand, could be significantly impacted by the move to a low-emissions future, as the region has a large pastoral farming sector and is New Zealand's source of natural gas, for both domestic energy needs and export products (e.g. methanol), as well as New Zealand's only oil exports. The transition to a low-emissions future must therefore be carefully planned.

Recognising the appetite amongst the people of Taranaki to determine their own destiny, seven 'pou' (pillars) – local business, iwi (Maori tribes), community groups, education, trade unions, and local and central government – came together to craft a vision for the future of the region: the Taranaki 2050 Roadmap.

In the spirit of 'co-design', this partnership facilitated a range of engagement activities for the purpose of developing the Roadmap, including:

1. Identifying a 'Lead Group' of representatives from the seven 'pou' (or pillars) to design, guide and ensure integrity and authenticity of the process;

2. Hosting public, topic-specific, workshops with a broad range of both specialists and community members to discuss specific transition pathways (such as energy, tourism, and people and talent);

3. Hosting community workshops for those not able, or wanting, to join topic-specific workshops;

4. Undertaking short surveys to gather views;

5. Running a creative competition to solicit ideas from youth (age 7 to 17) as well as a specific youth workshop with the region's high schools

6. Consulting widely on the draft Roadmap – including visits to more than 40 locations with over 1,000 people (including school children and Marae) and providing an online pictorial input mechanism.

Building on the success of this engagement strategy, the Lead Group and participants from the workshops have since come together to develop a series of Transition Pathway Action Plans,^[13] which define the short-term actions and medium-term strategy needed to achieve the region's long-term vision for 2050.

The Scottish Government's role in Just Transition Planning

The Scottish Government will establish a timeline of the key Plans it will coordinate. It will retain oversight of the development and drafting of each of these Plans to ensure integration with national policy. Each will be co-designed and co-delivered with those who stand to be most significantly impacted by the transition to net zero. This is likely to include (but not be limited to):

• Community groups;
• Workers and Trade unions;
• Businesses, business leaders and industry bodies;
• Academia and educators; and
• Climate leaders, activists and thinkers.

The Scottish Government will use all available evidence from relevant sources to support planning processes, working with partners to address gaps in evidence where such evidence would have a material impact on decision making. The Just Transition Commission, in their revised remit to support Just Transition Planning, may also gather evidence and engage with stakeholders to input into this process. Public calls for evidence may also be issued.

A ministerial statement on progress regarding the delivery of Just Transition Plans will be delivered to the Scottish Parliament on an annual basis. This will provide an update on key actions undertaken during the year to deliver the outcomes of the Plans.

The role of Just Transition Planning at the level of individual organisations

A strong partnership between business, unions, workforce and local communities will be vital for the success of any Just Transition Plan. This context means that planning will be required across all areas of Scottish society, including at the level of individual organisations of all kinds: businesses, local authorities, public bodies etc. We will publish guidance to support businesses in developing their own Just Transition Plans, consistent with this National Just Planning Framework, in early 2022.

How we will build on existing planning

Each Scottish Government-led Plan will be informed by, and supported by, existing and future industry level policy statements, technology roadmaps, and relevant non-government decarbonisation plans (Figure 1).

 

Just transition also gives us the opportunity to develop a more holistic assessment of our current decarbonisation plans, and to consider their impact in line with our commitments to drive fairness and equality in all we do, ensuring we achieve better outcomes for all. The following commitments are of direct relevance to this work:

National Performance Framework:

The National Performance Framework (NPF) is Scotland's wellbeing framework, which guides the work of this government, incorporating the aims of the United Nation's Sustainable Development Goals:

Our Purpose: To focus on creating a more successful country with opportunities for all of Scotland to flourish through increased wellbeing, and sustainable and inclusive economic growth

Our Values: We are a society which treats all our people with kindness, dignity and compassion, respects the rule of law, and acts in an open and transparent way

National Outcomes

• Children and Young People: We grow up loved, safe and respected so that we realise our full potential
• Communities: We live in communities that are inclusive, empowered, resilient and safe
• Culture: We are creative and our vibrant and diverse cultures are expressed and enjoyed widely
• Economy: We have a globally competitive, entrepreneurial, inclusive and sustainable economy
• Education: We are well educated, skilled and able to contribute to society
• Environment: We value, enjoy, protect and enhance our environment
• Fair Work and Business: We have thriving and innovative businesses, with quality jobs and fair work for everyone
• Health: We are healthy and active
• Human Rights: We respect, protect and fulfil human rights and live free from discrimination
• International: We are open, connected and make a positive contribution internationally
• Poverty: We tackle poverty by sharing opportunities, wealth and power more equally

'To encourage transformational social, economic and environmental change to achieve increased wellbeing and a more peaceful and prosperous future, recognising our assets and their relevance to future generations as well as our use and distribution of resources.'

The following NPF indicators are most relevant to our vision for a just transition in Scotland:

• Social capital
• Economic growth
• Greenhouse gas emissions
• Income inequality
• Skill profile of the population
• Employees on the living wage
• Employee voice
• Influence on local decisions
• Natural Capital Asset Index

These measures will allow us to track progress of our just transition on a national level, for which our Just Transition Plans will contribute.

National Strategy for Economic Transformation:

The upcoming National Strategy for Economic Transformation (NSET) will set out how we transition to a net zero economy in a way that protects our people and our planet. Our Just Transition Plans will be a key delivery vehicle for the NSET, focusing the ambitions of the NSET into practical actions that can be taken at the individual industry level. We will use the development of the NSET to help determine which industries should be prioritised for Just Transition Plans.

Climate Change Plan:

Just Transition Plans will directly support the delivery of Scotland's Climate Change Plans by providing detailed decarbonisation pathways for specific industries, aligned with Scotland's 2045 net zero target.

A detailed review of the planning process, progress against indicators, and suitability of goals and outcomes for each Plan will be undertaken as part of the development of each Climate Change Plan (every five years).

Scottish Climate Change Adaptation Programme (SCCAP):

Just Transition Plans will support the delivery of the SCCAP by identifying key physical risks from climate change and the actions required to build resilience to these risks, ensuring our economy is flexible, adaptable and responsive to the changing climate. Actions should be integrated with SCCAP as appropriate.

Technology roadmaps:

The Just Transition Commission called on Government to: 'ensure sufficiently developed roadmaps exist for the net zero transition in Scotland'. We have interpreted this recommendation as Key Technology Roadmaps, which will be an essential tool to support the delivery of Just Transition Plans. Examples of such Roadmaps include Transport Scotland's Connected and Autonomous Vehicle (CAV) Roadmap.^[14] Where such Roadmaps already exist we will incorporate these into our Plans (for example, roadmaps for negative emissions technologies). We will also use the production of our Just Transition Plans to identify and develop Roadmaps where they do not yet exist.

Existing industry plans:

There are several examples of where there is already excellent, industry-led, work taking place that our Just Transition Plans will look to build upon. For example, work is being undertaken by NECCUS^[15] – the growing industry membership body that represents organisations within the Scottish Industrial Cluster and supported by government and academia. NECCUS has been successful in bringing together public and private funding to develop Scotland's Net Zero Roadmap, designed to guide Scotland's high emission industries through the transition to a net zero economy.

Example roadmap milestones for key technologies

2020

• Hydrogen Policy Statement published.
• Scottish Industrial Energy Transformation Fund (SIETF) launched, including £34 million over 5 years (2021-2026) for projects at industrial sites for energy efficiency or deeper decarbonisation.

2021

• Expert Bioenergy Working Group set up.
• Detailed review of key NETs technologies and opportunities in Scotland carried out.
• Scottish Government Hydrogen Action Plan published.
• BEIS provides greater clarity on CCS and Hydrogen business models, and responds to consultation on greenhouse gas removal technologies.
• BEIS expected to publish its Hydrogen Strategy.
• First tranche of funding available from the £180 million Emerging Energy Technologies Fund.

2022

• Feasibility studies for most promising NETs locations and applications in Scotland.
• Demonstration projects funded, exploring potential roles for proposed Scottish Energy Technology Innovation Plan and Scottish Industrial Energy Transformation Fund, as well as wider UK net zero innovation funding.
• Cross-governmental review of NETs and bioenergy for Scotland to inform the 2024 Climate Change Plan.

2024

Acorn Project Development:

• 2024 – CCS Demonstration and commercialisation at St Fergus Gas Terminal;
• 2025 – Acorn Hydrogen, hydrogen production with CCS;
• 2026 – Shipped imports of CO2 for storage in the Acorn store;
• 2026 – Direct Air Capture and Storage operating from St Fergus.

2030

• First delivery-scale NETs installations begin operation.

Key elements of a Just Transition Plan

As stated previously, the framework will need to be applied in many different ways to reflect different circumstances. The elements proposed below are intended to ensure a degree of commonality.

We are proposing that each Just Transition Plan encompasses the following core elements, each informed by a series of key questions which the Scottish Government and its partners must address as part of the planning process (Figure 2). Each element will be co-designed, to build and maintain social consensus for our answers to each of these questions.

• Context – Where are we now? An analysis of the distribution of benefits and risks of the transition, using a wide range of evidence and sources, to support decision making during the planning process. A briefing document will be prepared by the Scottish Government, with input from partners, to set out existing evidence and identify links to existing policy and strategies for each Plan. This should also detail the key stakeholders to be engaged in planning, and how they will be enabled and supported to shape the planning process.
• Vision – Where do we want to go? What do we aim to achieve? What drives change? A series of outcomes that state what each Just Transition Plan will aim to achieve, aligned with our national Just Transition Outcomes. Interim goals will also be required for each plan and these will be assessed annually as part of the ministerial statement to Parliament. Both outcomes and goals will be underpinned by indicators, which will allow us to evaluate progress against the outcomes and the goals.
• Action plan – What are going to do? How are we going to do it? Identify, assess, and sequence the actions needed to achieve the vision. It is also essential that key barriers and enablers are identified and acted upon. This should be the most substantial section of all Just Transition Plans.
• Monitoring & reporting – How do we know we're on track? Detail how progress towards the outcome statements will be monitored and reported on.

In addition to these four main elements, any Just Transition Plan should be supported by a narrative that brings the vision and action plan together – to illustrate what the transition will mean for relevant stakeholders and how the Plan will achieve the desired outcomes.

 

How we will create co-designed Just Transition Plans

We will agree the most suitable mechanisms for identifying and involving key stakeholders at the beginning of the process. A representative group of stakeholders will be drawn from across the private, public, and third sectors. Examples of how we will engage various groups include:

Public and community engagement

The Scottish Government's Public Engagement Strategy for Climate Change lays out the approach and principles that will guide facilitation of the co-design process. The Strategy was developed through a consultative process, with public participation as one of three key strategic pillars.

In recent years this has taken different forms, including our support to set up Scotland's first Climate Assembly. The Assembly deliberated on evidence from over 100 expert speakers, responding to the question: 'How should Scotland change to tackle the climate emergency in an effective and fair way?' at a national level, and the Assembly's final report includes over 80 ambitious and wide-ranging recommendations,^[16] which we are currently considering.

The Just Transition Commission urged Government to 'Apply the lessons learned from Scotland's Climate Assembly across the development of all policies for tackling climate change' as part of a wider call for more deliberate democracy in policy making and delivery. We will continue to consider the range of mechanisms such as Citizens assemblies, climate conversations and other community climate initiatives, to help inform and support the development of Just Transition Plans and build on the legacy of Scotland's Climate Assembly.

Business and worker engagement

Our approach to business engagement will recognise the invaluable role of the private sector in delivering the technology, capital, and influence required to deliver our plans successfully.

We will learn from, and work with, existing examples of just transition focused partnerships between business and government, such as the Scottish Energy Advisory Board and Scotland's Industry Leadership Groups.

Workers' representatives will be essential partners in the development and delivery of Just Transition Plans. We will work with Trade Unions to develop the best approach for them to input directly into the development of Plans, building on the important collaborative approach taken to Fair Work policy.

The Role of the refreshed Just Transition Commission

The original Just Transition Commission was established by Ministerial appointment for two years, and subsequently delivered their final report in March of this year. It was highly successful in diagnosing the challenges and opportunities of a just transition for Scotland. As mentioned earlier, the next Just Transition Commission will be asked to support the design and delivery of Just Transition Plans, including undertaking engagement, and working on developing the evidence which will guide our actions. We will shortly announce the full remit and membership of the refreshed Commission.

How we will monitor our Just Transition Plans

The NPF will allow us to track progress of just transition at a national level, building on the contribution of the individual Just Transition Plans.

Monitoring Just Transition Plans will provide a more detailed picture of progress at the individual sector, region and industry level and will help us evaluate the effectiveness of action being taken. This will involve identifying and tracking progress against two types of indicators: Outcome indicators and goal indicators. These should be evidence-based, drawing on the science where relevant, i.e. emissions targets for individual businesses should be aligned with climate science.

Outcome indicators should:

• Align with the outcome statements, to ensure coherence of the Plan.
• Be quantitative or qualitative, based on the outcome.
• Long term, reflecting what the plan will achieve once delivered, (i.e. by 2045 or an earlier date for industries which will reach net zero sooner).
• Be developed through a co-design process, to ensure they fully reflect the aspirations and vision of the people who have been involved in the development of the Plan.
• Be accessible and meaningful – incorporating infographics and considering social media.

Goal indicators should:

• Align with the goals, which in turn contribute to outcome statements, to ensure coherence of the plan.
• Be quantitative, with clearly defined baselines, (using the most recent complete data for a calendar/financial year).
• Be developed for regular intervals throughout the plan, (i.e. every five years).
• Be adapted and amended to reflect changing circumstances.
• Account for what is (scientifically) credible.
• Support other Scottish Government targets and legislation.

Indicators should be able to be disaggregated so we can better understand the impact across different demographics, with a focus on those who are most vulnerable to the impacts of climate change and the wider transition to net zero. This will require calculating baselines for quantitative indicators, and/or detailed descriptions of the starting position for qualitative indicators, for those groups at the planning stage.

The demographic groups requiring disaggregated indicators will be determined through the co-design process when developing outcome statements and goals, e.g. to chart the number of businesses in an industry who are operating under Fair Work principles.

How we will amend our Just Transition Plans over time

Plans will, at a minimum, be reviewed by the Scottish Government alongside each Climate Change Plan (every five years). This will enable those delivering Plans to respond to changes in technology, costs, global markets, and policy, and to account for the latest available evidence on the distribution of costs and benefits of the transition.

At this point a detailed review of the planning process, progress against indicators, and suitability of goals and outcomes should be undertaken. Actions, goals, and indicators should be amended where required, to reflect changing economic, social, and environmental circumstances.

Amendments to the outcome statements should be avoided where possible, to support long-term certainty for those affected by the transition.

Outcomes of the review process should be documented and made available to the public within six months of the completion of the completion of the review process.