Investing for jobs: Capital Spending Review 2021-2022 to 2025-2026

Chapter 3: Capital Investment to Enable the Transition to Net Zero Emissions and Environmental Sustainability

Scotland’s world‑leading legislation – The Climate Change (Emissions Reduction Targets) (Scotland) Act 2019 – set new, tighter targets to achieve net zero domestic greenhouse gas emissions by 2045.  Interim targets are set for 2020, 2030 and 2040, for emissions reductions of 56%, 75% and 90% respectively, requiring action in all sectors.  The Environment Strategy for Scotland^[8] sets out our commitment for Scotland to play its full role in tackling the global climate and biodiversity crises.  The recently published Statement of Intent^[9] on biodiversity signals our high level of ambition for protecting and restoring Scotland’s biodiversity, and supporting the development of the post-2020 global biodiversity framework.

Tackling the climate and biodiversity crises will require transformative action across all sectors of the economy and across society.  The Scottish Government’s investment in publicly-funded infrastructure has a critical role to play in supporting the transition – committing to multiyear investments in this Plan sends a clear signal to supply chains to invest in people and technology, and help us deliver the transition to a net zero, sustainable economy.  For the first time, the Infrastructure Investment Plan recognises natural infrastructure in the definition of infrastructure.  Investment in natural infrastructure creates significant opportunities for improving biodiversity and reducing emissions, while also creating jobs and a wide range of health and wellbeing benefits, including improved urban air quality and protection from flooding.

The Scottish Government has used low, neutral and high carbon categories (known as a taxonomy approach), as shown in the table below, to analyse planned infrastructure spend for individual years. The categorisation was developed and proposed by the Low Carbon Infrastructure Taskforce in 2015^[10].

In 2020-21, 34.9% of Scottish Government capital spend was classed as low carbon.  This represented almost £1.8 billion of low carbon investment.

Across the Capital Spending Review, the Scottish Government has chosen to at least maintain, and where possible build on, this level of low carbon spend.  Scottish Ministers have agreed to invest a further £2 billion through the Low Carbon Fund over the next five financial years.  The Low Carbon Fund will increase investment as follows:

The purpose of the Low Carbon Fund is to help the public sector move further towards investment which supports the transition to net zero, supporting good jobs, boosting green jobs and developing green economy supply chains.

Its positive impact can be seen already in the Scottish Budget 2021-22, where the level of low carbon investment has risen to 36.9% of total capital funding.

Detailed breakdowns of new schemes, across the Capital Spending Review period, are as below.  These show significant allocations to the following ministerial portfolios: Transport, Infrastructure and Connectivity; Communities and Local Government; Rural Economy and Tourism; Environment, Climate Change and Land Reform; and Economy, Fair Work and Culture:

A key recommendation of the Infrastructure Commission for Scotland was that, wherever possible, Scottish public bodies should look to maintain their existing infrastructure rather than build new.

This can be seen across the Capital Spending Review period in the priority given to boosting funding for maintenance, aiming to double such investment over the five year period. For example, to ensure that maintenance of all public buildings, where possible, supports the transition to net zero we have created a £95 million fund to support the decarbonisation of the public sector estate.  Significant investment will also ensure a green transport fleet across all our public bodies.