Natural capital: regional economic reliance analysis

5. Forth Valley REP

Forth Valley Regional Economic Partnership's economy relies on nature from fishing and forestry to the way the environment regulates weather and climate and supports tourism and recreation. Understanding this helps us realise how important nature is to jobs and business today, and how investing in natural capital can bring about future economic benefits. £2bn of Forth Valley’s output is annually supported by natural capital alongside an estimated 10,900 full time equivalent (FTE) jobs.

Top 5 industries accounting for the largest share of natural capital reliant economic activity are:

• Electricity: 18% reliant
• Agriculture:13% reliant
• Water and sewerage: 8% reliant
• Meat processing: 7% reliant
• Coke and Petroleum: 6% reliant

Estimated employment supported by natural capital in these industries:

• Electricity: 810 FTE
• Agriculture:1,750 FTE
• Water and sewerage: 570 FTE
• Meat processing: 680 FTE
• Coke and Petroleum: 240 FTE

The percentage of economic activity and jobs supported by nature that cannot be replaced by engineering solutions are:

• Electricity: 84%
• Agriculture: 59%
• Water and sewerage: 86%
• Meat processing: 89%
• Coke and Petroleum: 100%

Forth Valley REP is the smallest region considered in this report, however its natural capital is key to Scotland's wider environment and economy. It includes Flanders Moss, one of the UK's best examples of raised bog, recognised as a critical site for peatland restoration and carbon storage. Scotland's first national park, Loch Lomond and The Trossachs, is partially within the REP and is not only valuable for its biodiversity, but also for the Loch's cultural and historical significance - attracting over 4 million visitors annually^[6]. Forth Valley REP's central location means that it supports vital habitat networks, thus contributing to supporting natural capital across Scotland.

To better understand the Forth Valley REP’s natural capital reliant output and employment, we can compare the data to ‘traditional’ economic measures from the National Accounts, which this analysis is based on. Using the National Accounts Forth Valley’s ‘traditional’ output is £14bn and 132,000 FTE jobs, while this model measures nature reliant output at £2bn and 10,900 FTE jobs. Some of this value of nature will be already reflected within the economic data, but some of nature’s value might partially or not at all reflected in market prices, therefore part of the £2bn is included in the £14bn, but not all.

Key considerations:

• The national park supports nature-based tourism. However, it should be noted that tourism (even directly supported by natural capital) is not separated out due to methodology. The output and employment effect of tourism, is captured in the data used for this analysis, but not isolated.
• Electricity generation in the analysis is reported without a breakdown of the electricity source. In the Forth Valley REP, the generation of renewables-based electricity is likely from a mix of onshore wind, solar, and biomass.
• The SIC industry classifications in the analysis shows Agriculture as a singular unit, however there is a wide range of agricultural output across Scotland. In this region, the main farm types are beef cattle, sheep, and dairy farms.
• Whilst the analysis does not focus on non-renewable energy, due to the environmental harm, the amount these industries purchase from renewable industries is picked up as economic dependence on natural capital. This explains why sometimes non-renewable industries are shown as natural capital reliant, like Coke and Petroleum SIC codes in this case.